ROOPREKHA VYAPAAR PVT. LTD.,KOLKATA vs. ITO, WARD-1(2), KOLKATA

A perusal of the affidavit would reveal that out of total 846 days, 559 days are attributable to the Covid period and is covered by the judgment of Hon’ble Supreme Court and need not be counted for determining the period of limitation. The remaining period is of 298 days. According to the assessee, the impugned order was received by the staff member of the company and he might have forgotten and missed to place the order before the Authority, who has to apply the mind for filing the appeal. Thereafter, the Covid period started. On the other hand, the ld. D/R, opposed the period for condonation of delay. On due consideration of the above facts, we are of the view that there is no deliberate attempt at the end of the assessee to commit the delay in filing the appeal because the assessee will Assessment Year: 2008-09 Rooprekha Vyapaar Pvt. Ltd. 4 not gain anything by causing the delay in prosecuting the appellate proceedings. In other words, this step cannot be considered as a strategy to defend the income tax litigation. It has to be construed as a bonafide mistake or a human error committed in the office. Therefore, we condone the delay and proceed to decide the appeal on merits.

The ld. Counsel for the assessee, further contended that the appeal of the assessee has been dismissed for want of prosecution in an ex-parte order. He pointed out that there was change of address and, therefore, the notice could not be served upon the assessee. He further drew our attention to the assessment order and submitted that even the Assessing Officer has not carried out the exercise in the line of directions given by the ld. Commissioner in an order passed u/s 263 of Act, hence both the impugned orders deserve to be set aside and proceedings deserve to be instituted at the level of the Assessing Officer. The ld. D/R, on the other hand, contended that though there are shortcomings at the end of the Assessing Officer in passing the impugned assessment order, the ld. First Appellate Authority has considered all the material available on record while deciding the appeal.

We have duly considered rival contentions and gone through the record carefully. First we deem it proper to take note of the findings recorded in the assessment order which is a very brief finding and the same reads as under:- “The assessee company filed its return of income for the assessment year 2008-09 on 22.08.2008 declaring a loss of Rs.39,088/. Assessment order u/s 147 /143(3) dated 30.06.2010 was set aside by the Ld. C.I.T, Kol-I, Kol vide its order u/s 263 of 1.T. ACT dated 07.03.2013 for the A.Y. 2004 and was sent back to the A.0. giving direction for conducting fresh enquiries and necessary verifications before passing a speaking order by the A.O. in pursuance of Assessment Year: 2008-09 Rooprekha Vyapaar Pvt. Ltd. 5 his direction, the case was re-fixed for hearing by issuing questionnaire along with notice u/s, 142(1) of the I.T. Act, 1961. The notice was sent by Speed Post to the address communicated by the assessee in its latest return. In response to said notice, the A/R, Sri Rajesh Agarwal, FCA appeared and submitted the documents and details as was asked for in the questionnaire. These were discussed with him, For further enquiry, he was asked to produce the Directors of the assessee company as well as shareholding companies during the year in concern. But, till the date of passing order, the A/R failed to do so. Thus, enquiry to the Directors of both investee and investor companies could not be carried out by issuing Summons u/s. 131 of the 1.T. Act following the direction in order u/s. 263 of the 1.T. Act. In the instant case, during the relevant year, the assessee company raised fresh share capital of Rs.200400000/- (4106000 + 196294000). In this situation, the Ld. CIT had issued the direction in his set aside order u/s. 263 of the I.T. Act to investigate the fresh capital with the compulsory appearance of the Directors of the said assessee company as well as Directors of the companies who had invested fresh share capital in the assessee company during the said asst. year. The burden of proof clearly had shifted on the assessee company to substantiate the said cash credit found in the assessee's book under the garb of fresh share capital by producing its own Directors as well as the Directors of the fresh share holding companies before the undersigned. In the light of above facts and circumstances of the case as well as the assessee's inability to discharge its own burden of proof to substantiate its claim of introduction of fresh share capital even after given several number of opportunities, it is held that the purported fresh capital alongwith the premium aggregating to Rs. 200400000/- is nothing but the assessee's own money routed under the garb of fresh share capital into the assessee's business. Therefore, Rs. 200400000/- is hereby treated as unexplained cash credit u/s. 68 of the I.T. Act and is added back to the total income of the assessee. Penalty proceedings u/s 271 (1)(c) is also initiated on this score for concealment of income by way of furnishing inaccurate particulars of its income.”

A perusal of this assessment order would reveal that in the original assessment order passed u/s 143(3)/147 of the Act no addition was made. This was set aside by the ld. Commissioner in the order passed u/s 263. Thereafter, the ld. Assessing Officer has commenced the assessment proceedings in pursuance of the 263 order. However, it is not discernible as Assessment Year: 2008-09 Rooprekha Vyapaar Pvt. Ltd. 6 to when he issued notice u/s 142(1) of the Act. The ld. Commissioner gave direction to the Assessing Officer to issue summons and procure the presence of the directors and others u/s 131 of the Act but the Assessing Officer has expressed his inability to carry out these directions. We fail to appreciate that compulsion. It only suggests that the Assessing Officer might have initiated the assessment very late and under the constraint of time, he has completed this assessment in a summary manner. But he made a huge addition of Rs. 20,04,00,000/-. Therefore, in the interest of justice, we deem it proper to set aside both the impugned orders and restore this issue to the file of the Assessing Officer for adjudication afresh on merits. It is pertinent to note that the observations made by us will not impair or injure the case of the revenue and will not cause any prejudice to the evidence/explanation of the assessee. The ld. Assessing Officer shall provide adequate opportunity of hearing to the assessee.

In the result, appeal of the assessee is allowed for statistical purposes.

""यथ" / The Respondent 3. संबंिधत आयकर आयु" / Concerned Pr. CIT 4. आयकर आयु" अपील / The CIT(A)- ( ) 5. िवभागीय "ितिनिध अिधकरण अपीलीय आयकर कोलकाता/DR,ITAT, Kolkata, , , 6. गाड" फाईल /Guard file.