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Income Tax Appellate Tribunal, MUMBAI BENCH “A” MUMBAI
Before: SHRI KULDIP SINGH & SHRI OM PRAKASH KANT
PER OM PRAKASH KANT, AM
This appeal by the assessee is directed against order dated 20.12.2021 passed by the National Faceless Appeal Centre, Delhi (in short ‘the Ld. First Appellate Authority’) for assessment year 2011- 12 raising following grounds :
Amol Omprakash Porwal 2 ITA No. 388/M/2022
1. On the facts and circumstances of the case and in Law, Ld. 1. On the facts and circumstances of the case and in Law, Ld. 1. On the facts and circumstances of the case and in Law, Ld. CIT(A) did not pass speaking order on CIT(A) did not pass speaking order on merits, hence his order is merits, hence his order is bad in law.
1a. On the facts and circumstances in case in Law, Ld. CIT (A) did 1a. On the facts and circumstances in case in Law, Ld. CIT (A) did 1a. On the facts and circumstances in case in Law, Ld. CIT (A) did not provide effective opportunity of hearing after covid not provide effective opportunity of hearing after covid-19 period 19 period and thus violated the principles of natural justice. and thus violated the principles of natural justice.
2. On the facts and On the facts and circumstances in case in Law, Ld. CIT (A) erred circumstances in case in Law, Ld. CIT (A) erred in not adjudicating the following grounds. 2a. The reassessment in not adjudicating the following grounds. 2a. The reassessment in not adjudicating the following grounds. 2a. The reassessment proceedings u/s 148 is proceedings u/s 148 is invalid and bad in law.
2b. The Learned Assessing Officer erred in invoking provisions of 2b. The Learned Assessing Officer erred in invoking provisions of 2b. The Learned Assessing Officer erred in invoking provisions of section 147 without having any section 147 without having any material in possession to form material in possession to form reason to believe that income chargeable to tax had escaped reason to believe that income chargeable to tax had escaped reason to believe that income chargeable to tax had escaped Assessment.
2c. The Learned Assessing officer erred in adding the entire sale 2c. The Learned Assessing officer erred in adding the entire sale 2c. The Learned Assessing officer erred in adding the entire sale proceeds on sale of shares Splash Media and Infra Ltd. (Splash proceeds on sale of shares Splash Media and Infra Ltd. (Splash proceeds on sale of shares Splash Media and Infra Ltd. (Splash Media) of Rs. 74,53,604/ Media) of Rs. 74,53,604/- u/s 68 of the Act.
2d. The Learned Assessing officer erred in disallowing the 2d. The Learned Assessing officer erred in disallowing the 2d. The Learned Assessing officer erred in disallowing the exemption u/s 10(38) of the Act in respect of long term capital exemption u/s 10(38) of the Act in respect of long term capital exemption u/s 10(38) of the Act in respect of long term capital gain accruing on sale shares of Splash Media Infra Ltd. gain accruing on sale shares of Splash Media Infra Ltd. 2e. The Learned Assessing officer erred in taxing 2e. The Learned Assessing officer erred in taxing u/s 68 u/s 68 the consideration in respect of short term capital gain of Rs. 22365/ consideration in respect of short term capital gain of Rs. 22365/ consideration in respect of short term capital gain of Rs. 22365/- on sale 1300 shares of Splash Media. 2f. The amount of Rs. 74, 53, on sale 1300 shares of Splash Media. 2f. The amount of Rs. 74, 53, on sale 1300 shares of Splash Media. 2f. The amount of Rs. 74, 53, 604/- could not have could not have been taxed u/s 68 of the Act as undisclosed been taxed u/s 68 of the Act as undisclosed income.
Amol Omprakash Porwal 3 ITA No. 388/M/2022 2g. The Learned Assessing officer failed app 2g. The Learned Assessing officer failed appreciate that the reciate that the appellant had submitted evidence supporting the purchase and appellant had submitted evidence supporting the purchase and appellant had submitted evidence supporting the purchase and sale of shares of Splash Media and Infra Ltd resulting in capital sale of shares of Splash Media and Infra Ltd resulting in capital sale of shares of Splash Media and Infra Ltd resulting in capital gains of Rs. 71,56,222/ gains of Rs. 71,56,222/-.
2h. The Learned Assessing officer failed to appreciate the fact that 2h. The Learned Assessing officer failed to appreciate the fact that 2h. The Learned Assessing officer failed to appreciate the fact that the appellants tr the appellants transactions of purchase and sale of shares of ansactions of purchase and sale of shares of Splash Media had been executed on the Bombay stock Exchange, a Splash Media had been executed on the Bombay stock Exchange, a Splash Media had been executed on the Bombay stock Exchange, a recognized stock exchange, on which Security Transaction tax had recognized stock exchange, on which Security Transaction tax had recognized stock exchange, on which Security Transaction tax had been duly paid. been duly paid.
The Learned Assessing officer erred in making 21. The Learned Assessing officer erred in making the addition of the addition of sale proceeds on sale of shares Splash Media u/s 68 on the basis of sale proceeds on sale of shares Splash Media u/s 68 on the basis of sale proceeds on sale of shares Splash Media u/s 68 on the basis of mere suspicion and surmises, and not based on facts or evidence. mere suspicion and surmises, and not based on facts or evidence. mere suspicion and surmises, and not based on facts or evidence. He failed to bring any evidence on record supporting his He failed to bring any evidence on record supporting his He failed to bring any evidence on record supporting his conclusions or controverting the conclusions or controverting the evidence submitted by the evidence submitted by the appellant.
2j. The Learned Assessing officer erred in relying on the purported 2j. The Learned Assessing officer erred in relying on the purported 2j. The Learned Assessing officer erred in relying on the purported findings of the search / survey in case of alleged operators, findings of the search / survey in case of alleged operators, findings of the search / survey in case of alleged operators, statements of Anuj Agarwal, Pravin Agarwal, Raj kumar Kedia statements of Anuj Agarwal, Pravin Agarwal, Raj kumar Kedia statements of Anuj Agarwal, Pravin Agarwal, Raj kumar Kedia and others, investigations purportedly conducted by the and others, investigations purportedly conducted by the and others, investigations purportedly conducted by the Directorate of Investigation, Kolkata, and some SEBI report but orate of Investigation, Kolkata, and some SEBI report but orate of Investigation, Kolkata, and some SEBI report but without bringing on record any evidence whatsoever in relation to without bringing on record any evidence whatsoever in relation to without bringing on record any evidence whatsoever in relation to transactions undertaken by the appellant for purchase and sale of transactions undertaken by the appellant for purchase and sale of transactions undertaken by the appellant for purchase and sale of shares of Splash Media. shares of Splash Media.
2k. The Learned Assessing Officer erred in 2k. The Learned Assessing Officer erred in reaching findings and findings and conclusions stated in para 13 of his conclusions stated in para 13 of his assessment order without any assessment order without any evidence on record, evidence on record, either direct or otherwise. The conclusions are either direct or otherwise. The conclusions are based on presumptions and surmises. based on presumptions and surmises.
Amol Omprakash Porwal 4 ITA No. 388/M/2022 2i. The Learned Assessing officer erred in . The Learned Assessing officer erred in disallowing the disallowing the exemption u/s 10(38) of the Act mption u/s 10(38) of the Act without establishing that the without establishing that the appellant was part of appellant was part of the modus operndi stated by the Learned the modus operndi stated by the Learned Assessing officer. Regarding denial of natural Assessing officer. Regarding denial of natural justice. 2m. The Learned Assessing officer has denied natural justice to the 2m. The Learned Assessing officer has denied natural justice to the 2m. The Learned Assessing officer has denied natural justice to the appellant by not giving opportunity to cross examine the persons appellant by not giving opportunity to cross examine the persons appellant by not giving opportunity to cross examine the persons on whose statements the Assessing Officer has relied. on whose statements the Assessing Officer has relied. 2n. The Learned Assessing officer violated the principles of natural 2n. The Learned Assessing officer violated the principles of natural 2n. The Learned Assessing officer violated the principles of natural justice in relying on and using purported findings of the search justice in relying on and using purported findings of the search justice in relying on and using purported findings of the search /survey in case of alleged operators, investigation conducted by /survey in case of alleged operators, investigation conducted by /survey in case of alleged operators, investigation conducted by Directorate of Investigation, Kolkata, statements of Anuj Agarwal, Directorate of Investigation, Kolkata, statements of Anuj Agarwal, Directorate of Investigation, Kolkata, statements of Anuj Agarwal, Pravin Agarwal, Raj Kumar Kedia and others and SEBI report Pravin Agarwal, Raj Kumar Kedia and others and SEBI report Pravin Agarwal, Raj Kumar Kedia and others and SEBI report without providing the appellant a copy of such statements, reports without providing the appellant a copy of such statements, reports without providing the appellant a copy of such statements, reports and other documents relied upon by the Assessing Officer. and other documents relied upon by the Assessing Officer.
We have heard rival submissions of the parties on the issue-in- We have heard rival submissions of the parties on the issue We have heard rival submissions of the parties on the issue dispute and perused the relevant material on record. dispute and perused the relevant material on record. dispute and perused the relevant material on record. We find that the Ld. First Appellate Authority has adjudicated the appeal the Ld. First Appellate Authority has adjudicated the appeal the Ld. First Appellate Authority has adjudicated the appeal ex-parte qua the assessee due to default on the part of the assessee in qua the assessee due to default on the part of the assessee in qua the assessee due to default on the part of the assessee in complying various notices issued various notices issued for hearing of appeal for hearing of appeal. The relevant finding of the Ld. First Appellate Authority is repr finding of the Ld. First Appellate Authority is reproduced as under: oduced as under:
Amol Omprakash Porwal 5 ITA No. 388/M/2022
3. Grounds No. 1, 2, 4 to 14 of the appeal are general in nature and 3. Grounds No. 1, 2, 4 to 14 of the appeal are general in nature and 3. Grounds No. 1, 2, 4 to 14 of the appeal are general in nature and therefore require no separate adjudication. Ground No. 3 of the therefore require no separate adjudication. Ground No. 3 of the therefore require no separate adjudication. Ground No. 3 of the appeal relates to the addition of Rs. 74,53,604/ appeal relates to the addition of Rs. 74,53,604/- u/s 68 of the Act. u/s 68 of the Act.
In order to give proper opportunit 4. In order to give proper opportunity to the appellant to present y to the appellant to present its case and to defend the grounds of appeal
taken by it, the case its case and to defend the grounds of appeal taken by it, the case its case and to defend the grounds of appeal taken by it, the case was posted for hearing on various dates, the details of which are was posted for hearing on various dates, the details of which are was posted for hearing on various dates, the details of which are as under: Date of Notice Date of furnished submission on or Date of furnished submission on or status status before before 13.03.2020 24.03.2020 24.03.2020 No compliance No compliance 13.08.2020 19.08.2020 19.08.2020 No compliance No compliance 24.12.2020 28.12.2020 28.12.2020 No compliance No compliance 10.02.2021 19.02.2021 19.02.2021 No compliance No compliance 03.12.2021 20.12.2021 20.12.2021 No compliance No compliance
5. As can be seen from the above details, the appellant has been 5. As can be seen from the above details, the appellant has been 5. As can be seen from the above details, the appellant has been provided reasonable number of opportunities but it has chosen not reasonable number of opportunities but it has chosen not reasonable number of opportunities but it has chosen not to avail any of these. No written submission has been made by the to avail any of these. No written submission has been made by the to avail any of these. No written submission has been made by the appellant in support of the grounds taken during the appeal. It appellant in support of the grounds taken during the appeal. It appellant in support of the grounds taken during the appeal. It appears that the appellant is not keen to pursue the appeal and no appears that the appellant is not keen to pursue the appeal and no appears that the appellant is not keen to pursue the appeal and no material/argument has been brought on record by the appellant terial/argument has been brought on record by the appellant terial/argument has been brought on record by the appellant against the order of the AO and in support of the grounds taken in against the order of the AO and in support of the grounds taken in against the order of the AO and in support of the grounds taken in appeal.
5.1 Reference is made to the decision of Hon'ble Supreme Court in 5.1 Reference is made to the decision of Hon'ble Supreme Court in 5.1 Reference is made to the decision of Hon'ble Supreme Court in the case of CIT vs. BN Bhattacharya (1997) 118 ITR 461 the case of CIT vs. BN Bhattacharya (1997) 118 ITR 461 the case of CIT vs. BN Bhattacharya (1997) 118 ITR 461 (SC), in which the Hon'ble Apex Court while dealing with the issue of which the Hon'ble Apex Court while dealing with the issue of which the Hon'ble Apex Court while dealing with the issue of persuasion of appeal has stated that "Preferring an appeal means persuasion of appeal has stated that "Preferring an appeal means persuasion of appeal has stated that "Preferring an appeal means more than formally filing it but effectively pursuing it". more than formally filing it but effectively pursuing it".
Amol Omprakash Porwal 6 ITA No. 388/M/2022 5.2 The Delhi Tribunal in CIT vs. Multiplan India Pvt. Ltd. as 5.2 The Delhi Tribunal in CIT vs. Multiplan India Pvt. Ltd. as 5.2 The Delhi Tribunal in CIT vs. Multiplan India Pvt. Ltd. as reported in 38 ITD 320 (Delhi) when faced with a similar situation reported in 38 ITD 320 (Delhi) when faced with a similar situation reported in 38 ITD 320 (Delhi) when faced with a similar situation of non-persuasion of appeal, dismissed the appeal of revenue. persuasion of appeal, dismissed the appeal of revenue. persuasion of appeal, dismissed the appeal of revenue. 5.3 In view of these facts, I am of the opinion that no interference 5.3 In view of these facts, I am of the opinion that no interference 5.3 In view of these facts, I am of the opinion that no interference is called for in the AO's order and therefore, the ground is called for in the AO's order and therefore, the grounds of appeal s of appeal are dismissed. 2.1 We find that the Ld. CIT(A) has dismissed the appeal in view of We find that the Ld. CIT(A) has dismissed the appeal in view of We find that the Ld. CIT(A) has dismissed the appeal in view of default on the part of the assessee in complying various notices default on the part of the assessee in complying various notices default on the part of the assessee in complying various notices issued but the issue in dispute in the appeal issued but the issue in dispute in the appeal has not been decided on not been decided on merit. In our opinion unde merit. In our opinion under the provisions of Act i.e. section 250 and r the provisions of Act i.e. section 250 and 251 of the Income Tax Act, 1961 (in short ‘the Act’), the Ld. 251 of the Income Tax Act, 1961 (in short ‘the Act’), the Ld. 251 of the Income Tax Act, 1961 (in short ‘the Act’), the Ld. First Appellate Authority is required to dispose the appeal is required to dispose the appeal is required to dispose the appeal on merit even if the assessee has not complied to the notices issued. Therefore, we if the assessee has not complied to the notices issued. Therefore, we if the assessee has not complied to the notices issued. Therefore, we set aside the order of the Ld. First side the order of the Ld. First Appellate Authority and restore Appellate Authority and restore the matter back to him for deciding afresh in accordance with the the matter back to him for deciding afresh in accordance with the the matter back to him for deciding afresh in accordance with the law and pass a speaking order on merit of the additions challenged pass a speaking order on merit of the additions challenged pass a speaking order on merit of the additions challenged by the assessee. The grounds raised by the assessee are acc by the assessee. The grounds raised by the assessee are acc by the assessee. The grounds raised by the assessee are accordingly allowed for statistical purposes. allowed for statistical purposes.
Amol Omprakash Porwal 7 ITA No. 388/M/2022
In the result, the appeal filed by the assessee is allowed for In the result, the appeal filed by the assessee is allowed for In the result, the appeal filed by the assessee is allowed for statistical purposes.