SURVI RUBBER PVT. LTD.,KOLKATA vs. ITO, WARD - 1(4), KOLKATA

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ITA 1978/KOL/2019Status: DisposedITAT Kolkata06 September 2022AY 2014-154 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) erred in passing an ex parte order without providing an adequate opportunity for hearing and without adjudicating on all grounds raised by the assessee. The matter was therefore remanded back to the CIT(A).

What were the facts?

The assessee's appeal before the CIT(A) was decided ex parte without adequate opportunity for hearing. The CIT(A) confirmed the Assessing Officer's action of treating share capital and share application money as unexplained cash credits.

What were the issues?

Whether the CIT(A) erred in passing an ex parte order and failing to provide an adequate opportunity of hearing to the assessee. Whether share capital and share application money were correctly treated as unexplained cash credits.

Which sections of the Income-tax Act were involved?

Section 68,Section 115BBE

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “B” BENCH KOLKATA

Before: SHRI SANJAY GARG & SHRI GIRISH AGRAWAL

For Appellant: Shri Manish Tiwari, FCA
For Respondent: Shri Biswanath Das, Add. CIT
Hearing: 27.06.2022Pronounced: 06.09.2022

O R D E R

PER GIRISH AGRAWAL, ACCOUNTANT MEMBER:

1.

This appeal by the assessee is directed against the order of Ld. CIT(A)-10, Kolkata vide Appeal No.152/CIT(A)-10/Wd-1(4)/14-15/2018- 19/Kol dated 26.04.2019 for A.Y. 2014-15 arising out of order passed u/s. 143(3) of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) by ITO, Ward-1(4), Kolkata dated 22.12.2016.

2.

Shri Manish Tiwari, FCA appeared on behalf of the assessee and Shri Biswanath Das, Addl. CIT appeared on behalf of the revenue.

3.

The grounds taken by the assessee are reproduced as under:

“1. (a) That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in passing order on ex parte view without allowing adequate and effective opportunity of hearing.

Survi Rubber Pvt. Ltd., A.Y: 2014-15 (b) That the hearing of the appeal fixed on two occasions were duly complied by the authorised representative by filing adjournment letters as admitted by Ld. CIT(A) and as such cannot call for any adverse inference.

2. That on the facts and in the circumstances of the case, Ld. C.I.T. (A) has erred in confirming the action of Assessing Officer who considered Share capital of Rs.80,49,900/- as unexplained cash credit u/s 68 of Income Tax Act, 1961 read with section 115BBE.

3. That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in confirming the action of AO who treated the amount of share application money received in earlier years totaling to Rs. 58,50,000/- and brought forward as an opening balance in the relevant assessment year as unexplained cash credit u/s 68 of the Act, 1961.”

4.

At the outset, Ld. Counsel Shri Manish Tiwari, FCA before us submitted that Ld. CIT(A) has not adjudicated upon ground no. 3 taken before this Hon’ble Tribunal and has passed the order ex parte without allowing adequate and effective opportunity of hearing to the assessee. He thus prayed for remanding the matter back to the file of Ld. CIT(A) for the due adjudication of ground no. 3 taken in the present appeal which were also before the Ld. CIT(A) vide ground nos. 1 and 2 as reproduced at page 2 of the impugned order.

4.1. Further, Ld. Counsel pointed out the contradictory observations made by Ld. CIT(A) while disposing of the appeal ex parte by referring to para 3 and para 13.1, of the impugned order. In para 13.1 Ld. CIT(A) has noted that “I also find that all the submissions made by the appellant during the course of the appeal point towards elaborate documentation, meaning thereby that the appellant has produced papers relating to application for the shares the allotment of the shares, the share certificates, payments by cheque and the necessary papers filed before the Registrar of Companies, where the name of the assessee has been reflected as a shareholder.” Contrary to this, in para 3, Ld. CIT(A) noted that “In the circumstances, it can be assumed that, for reasons best known to the appellant, there is no serious effort to pursue the appeal from its end. There is no gain-saying that as the appellant has filed the appeal, it is incumbent upon it to pursue the matter, respond the Survi Rubber Pvt. Ltd., A.Y: 2014-15 notice in time and defend the grounds of appeal taken in the matter. As there has been no response by the appellant, the matter is being decided on the basis of the facts available on record and the law applicable thereof.”

4.2. When these facts and submissions of the Ld. Counsel were confronted to the Ld. Sr. DR, nothing contrary was placed on record.

5.

Considering the fact of non-adjudication or specific grounds by the Ld. CIT(A) as referred to by the Ld. Counsel and also the contradictory observations made in the impugned order while dismissing the appeal ex parte by the Ld. CIT(A), we find it proper to remit the matter back to the file of Ld. CIT(A) for meritorious disposal of the grounds raised by the assessee by taking into consideration all the submissions and applicable law and thereupon passing a speaking order. Needless to say that the assessee be given a reasonable opportunity of being heard to make its submissions in support of the claims made. We also direct the assessee to be diligent in attending the hearings as and when fixed by the Ld. CIT(A) and avoid seeking adjournments except in certain unavoidable circumstances. Accordingly, the appeal of the assessee is allowed for statistical purposes.

6.

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

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