Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, “I” BENCH, MUMBAI
Before: SHRI PRAMOD KUMAR & SHRI SANDEEP SINGH KARHAIL
The present appeal has been filed by the Revenue challenging the impugned order dated 19.07.2019, passed by the learned Commissioner of Income Tax (Appeals)–56, Mumbai, under section 250 of the Income Tax Act, 1961 ("the Act") for the assessment year 2014–15.
When the appeal was called for hearing, no one was present on behalf of the assessee to represent the case. There is no application
Shri Pravin Ambalal Debi ITA No. 6289/Mum./2019 seeking adjournment either. On perusal of the record, it is observed that in previous hearings also no one appeared on behalf of the assessee. Considering the nature of dispute, we proceed to dispose of the appeal ex- parte qua the assessee after hearing the learned Departmental Representative (“learned D.R.”) and on the basis of material available on record.
In this appeal, the Revenue has raised following grounds:–
"1. Whether on the facts and in circumstances of the case and in law, the Ld. CIT(A) is right in allowing the appeal on merely technical ground of lack of enquiry by A.O., when the CIT Appeal himself has all the powers of the A.O.? 2. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT Appeal is right in allowing the Appeal without considering the principles enumerated by the Hon. Delhi High Court in the case of Jan Sampark Advertising and Marketing (P) Ltd. (375 ITR, 373 Delhi)? 3. Whether on the facts and in the circumstances of the case and in law, the Ld. CIT Appeal is right in allowing the appeal when the Assessee could not establish the nature and source of the investment as per the requirement of the section 69 of the Income Tax Act, 1961?."
The brief facts of the case as emanating from the record are: The assessee is an individual and has not filed return of income for the year under consideration. Therefore, summons under section 131 of the Act was issued on 15/09/2016 in order to verify certain transactions in shares entered into by the assessee as intimated by the investigation wing. The said summons was received by cousin of the assessee. As, no one attended to the summons, the Assessing Officer issued notice under section 148 of the Act on the basis of information available on the ITD systems. In Shri Pravin Ambalal Debi ITA No. 6289/Mum./2019 response thereto, the authorised representative of the assessee appeared and filed details. It was submitted that the assessee, who is a non-resident Indian, is not involved in any share transactions as mention in the reasons for reopening the assessment. In order to provide opportunity for hearing in respect of the data available with the Assessing Officer, summons under section 131 was issued to the assessee for details and his personal attendance to counter the data available. In response, the authorised representative filed a letter stating that the assessee is not available in the country and he is working in Dubai therefore cannot be present for hearing. The Assessing Officer vide order dated 28/12/2017 passed under section 143(3) read with section 147 of the Act noted that as per the statement of Shri Jaikishan Poddar, Director of Consortium Capital Private Limited, many scrips were used for providing the accommodation entries of LTCG and LTCL to different beneficiaries using its company. The assessee being one of the beneficiary was called under section 131 to counter the same and to cross-examine the Director. However, in absence of assessee, the statement of Director was treated as accepted by the assessee. Further, the Assessing Officer noted that the assessee is a knowledgeable person having employment and business as investor worldwide and therefore it cannot be stated that he had no knowledge for the securities transactions and investments. Accordingly, the Assessing Officer made an addition of Rs. 10,88,98,220 as unexplained investments being investment where the assessee has offered no explanation under section 69 of the Act.
Shri Pravin Ambalal Debi ITA No. 6289/Mum./2019
The learned CIT(A) vide order dated 19/07/2019 allowed the appeal filed by the assessee and deleted the addition made by the Assessing Officer under section 69 of the Act, by observing as under:
“12. I find that none of the objections / rebuttal of allegations was considered by Assessing Officer. The assessee denied transaction with Consortium Capital Pvt. Ltd. No effort was made to enquire and establish that funds were transferred from bank account of assessee to bank account of Consortium Capital Pvt. Ltd. or has established cash payment. To make an addition under section 69, investment is to be proved in the first place. The statement of Kishan Poddar is on bogus capital gain / capital loss (accommodation entry) not on receipt of sums. The focus of enquiry was to be how much assessee actually invested and whether the source is explained, if an addition under section 69 was to be made. The assessment order is totally silent on this aspect as also the further report of Assessing Officer.
As no material is brought to record to make an addition invoking section 69 i.e. not proven that unaccounted investment made in Consortium Capital Pvt. Ltd., I hold that the addition is not warranted. Accordingly, the Assessing Officer is directed to delete the addition. Accordingly, grounds 1 to 23 are allowed.”
Being aggrieved, the Revenue is in appeal before us. During the course of hearing, learned D.R. submitted that the learned CIT(A) allowed the appeal filed by the assessee on the basis that no enquiry was conducted by the Assessing Officer while making addition. In support of its submission, learned D.R. placed reliance upon decision of Hon’ble Delhi High Court in CIT v/s Jansampark Advertising & Marketing (P) Ltd.: [2015] 56 taxmann.com 286 (Delhi).
We have considered the submission and perused the material available on record. In the present case, the learned CIT(A) has taken note of various submissions filed by the authorised representative of the assessee during the course of assessment proceedings. The learned
Shri Pravin Ambalal Debi ITA No. 6289/Mum./2019 CIT(A), observed that various objections/rebuttal of allegations were made by the assessee, however, same were not considered by the Assessing Officer. The learned CIT(A) also observed that no enquiry was made by the Assessing Officer to establish transfer of funds from bank account of assessee to a bank account of Consortium Capital Private Limited. It is well established that power of the Commissioner (Appeals) is coterminous to the Assessing Officer. In the present case, the learned CIT(A) merely enlisted various shortcomings in the order passed by the Assessing Officer. It is no doubt true that the Commissioner (Appeals) now no longer has power to set aside the matter to the Assessing Officer for adjudication, however, same does not preclude the Commissioner (Appeals) from making necessary enquiry, as may be required, to decide the issue in appeal. In order to adjudicate the issue, the Commissioner (Appeals) can also call for the remand report from the concerned Assessing Officer and after providing opportunity of hearing to the assessee on such report, the Commissioner (Appeals) can adjudicate the issue. In this regard, it is pertinent to note the provisions of section 250(4) of the Act, which reads as under: “(4) The Commissioner (Appeals) may, before disposing of any appeal, make such further enquiry as he thinks fit, or may direct the Assessing Officer to make further enquiry and report the result of the same to the Commissioner(Appeals).” The purpose of this enabling clause is essentially to ensure that the matter of assessment reaches finality with all the requisite facts found.
Shri Pravin Ambalal Debi ITA No. 6289/Mum./2019
We find that Hon’ble Delhi High Court in Jansampark Advertising & Marketing (P) Ltd. (supra) observed as under:
“42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT (Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the face of the allegations of the Revenue that the account statements reveal a uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to the notice under Section 148 issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of making or causing to be made a "further inquiry" in exercise of the power under Section 250(4). This approach not having been adopted, the impugned order of ITAT, and consequently that of CIT (Appeals), cannot be approved or upheld.”
In the present case, the assessee had not filed return of income and in order to verify the transactions as intimated by the investigation wing, the summons was issued. However, the same was also not attended by the assessee, and reassessment proceeding under section 148 of the Act was initiated. The Assessing Officer by referring to the statement of the Director of Consortium Capital Private Limited made the addition under section 69 of the Act. The learned CIT(A) thought observed that various submissions, as filed by the assessee, were not considered by the Assessing Officer while making the addition, however, learned CIT(A) failed to make any enquiry nor called for any remand report from the Assessing Officer, even after noting various shortcomings in the assessment order. The learned CIT(A) merely on account of absence of material being brought on record deleted the addition made under section 69 of the Act.
Shri Pravin Ambalal Debi ITA No. 6289/Mum./2019
In view of the above, we are of the considered opinion that, in the present case, the learned CIT(A) has not discharged its obligation of ensuring effective enquiry and detailed scrutiny of all the aspects while deciding the appeal. Thus, we deem it appropriate to set aside the impugned order and remand the matter to the learned CIT(A) for de novo adjudication after conducting proper and effective enquiry. Needless to mention that no order shall be passed without affording reasonable opportunity of being heard to the assessee. Accordingly, grounds raised by the Revenue are allowed for statistical purpose.
In the result, appeal by the Revenue is allowed for statistical purpose. Order pronounced in the open court on