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Income Tax Appellate Tribunal, “B” BENCH, KOLKATA
Before: Shri A. T. Varkey, JM & Shri Rajesh Kumar, AM]
ORDER
Per Shri A.T.Varkey, JM
This appeal has been preferred by the assessee against the order of the Ld. CIT(A)- 8, Kolkata dated 25.08.2020 for AY 2013-14.
2. At the outset, the Ld. AR Shri A. K. Tulsiyan drew our attention to the fact that though the Ld. CIT(A) has dismissed the appeal of the assessee by stating that none has appeared for the assessee, however he has done so without realizing the fact that the assessee/AR had appeared before the Ld. CIT(A) and the Ld. CIT(A) has called for remand report which can be seen placed at pages 20 and 21 of the paper book. According to the Ld. AR, a perusal of the same would reveal that the AO has accepted the fact that the Director of M/s. Nageshwar Consultant Pvt. Ltd, Shri Pritam Ghosh who purchased the painting from the assessee had appeared before him and the statement of the director has been recorded and the AO had gathered the copies of the identity and the other documents which has been placed in the assessment record/folder. The AO in the remand report also states that he directed the assessee to produce Shri Kunj Bihari Agarwal, the karta of M/s. K. B. Sons (HUF) from whom the painting was received as gift by the assessee. Pursuant thereto Shri Kunj Bihari Agarwal, Karta of M/s. K. B. Sons, HUF also had appeared before the AO personally and accepted the fact that the painting in question was gifted by him. And the AO after collecting the evidence of incorporation of M/s. Nageshwar
Mukesh Kumar Agarwal, HUF, AY 2013-14 Consultant Pvt. Ltd. and the return filed before the ROC as well as ITR, the AO has submitted the remand report to the Ld. CIT(A). So, in this case according to Ld. AR, the donor of the painting has appeared before the AO and accepted the fact that M/s. K B. Sons, HUF had indeed gifted the painting to the assessee and the buyer M/s. Nageshwar Consultant Pvt. Ltd. director Shri Pritam Ghosh had appeared and confirmed before the AO during the remand proceeding these facts and also submitted the documents to substantiate their respective identities, ITR’s etc. which has been verified by him/AO, therefore, nothing survives as such and the claim made by the AO before the AO has to succeed. However since no proper opportunity the assessee got before the AO in the original assessment proceeding the Ld. AR prayed that the matter may be restored to the file of AO for fresh adjudication on the issue raised therein. In this regard, we rely on the decision of Hon’ble Supreme Court in the case of Tin Box Company vs. CIT reported in (2001) 249 ITR 216 (SC) wherein it has been held as under:
“1. It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus :
"We will straightaway agree with the assessee's submission that the Income-tax Officer had not given to the assessee proper opportunity of being heard."
That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of selling out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard.
3. Two questions were placed before the High Court, of which the second question is not pressed. The first question reads thus :
"1. Whether, on the facts and in the circumstances of the case, the Tribunal was justified in not setting aside the assessment order in spite of a finding arrived at by it that the Income-tax Officer had not given a proper opportunity of hearing to the assessee ?"
In our opinion, there can only be one answer to this question which is inherent in the question itself : in the negative and in favour of the asses-see.
The appeals are allowed. The order under challenge is set aside. The assessment order, that of the Commissioner (Appeals) and of the Tribunal are also set aside. The matter shall now be remanded to the assessing authority for fresh consideration, as afore-stated. No order as to costs.”
Taking note of the aforesaid decision of the Hon’ble Supreme Court as well as the fact that the donor of the gift could not be produced during the assessment proceeding by Mukesh Kumar Agarwal, HUF, AY 2013-14 the assessee as well as the buyer of the painting could not appear before the AO, the AO drew adverse inference against the assessee and the claim of the assessee was rejected. Since in the remand proceeding the AO has accepted the genuineness of the gift since both the donor of gift and the buyer of the painting in question has appeared before him, we in the interest of justice and fair play, set aside the order of the Ld. CIT(A) and restore the issue back to the file of AO for re-consideration of his adverse view taken earlier in the light of the remand report discussed supra in accordance to law. Therefore, this appeal of assessee is allowed for statistical purposes.