M/S GOPESH IMPEX PVT. LTD,MUMBAI vs. ITO-12(2)(3), MUMBAI

ORDER PER N.K. PRADHAN, A.M. This is an appeal filed by the assessee. The relevant assessment year is 2010-11. The appeal is directed against the order of the Commissioner of Income Tax (Appeals)-20, Mumbai [in short ‘CIT(A)’] and arises out of the assessment completed u/s 143(3) r.w.s. 147 the Income Tax Act 1961, (the ‘Act’). Though the case was fixed for hearing on 17.02.2020 and 05.10.2020, neither the assessee nor its authorized representative participated in the hearing before the Tribunal. As there is non-compliance by the assessee, we are proceeding to dispose off this appeal after examining the materials available on record and hearing the Ld. Departmental Representative (DR).

1.1 On the facts and circumstances of the case and in law, the CIT(A) erred in passing order without providing of reasonable opportunity of hearing and not following the principle of natural justice, hence, the order passed is invalid and void ab-initio. 1.2 On the facts and circumstances of the case and in law, the CIT(A) erred in passing order dated 31.12.2018 without providing of reasonable opportunity of hearing and not considering the adjournment request made before CIT(A) by email dated 28.12.2018 in response to CIT(A)'s email dated 28 Dec 2018 for short adjournment. 2.1 On the facts and circumstances of the case and in law, the Appellant object the reopening of the assessment under section 147 of Income Tax Act, 1961 (‘the Act’) 2.2. The notice issued u/s 148 the Act is invalid and void ab initio as the reason recorded amounts to reason to suspect and do not amount to reason to believe and the said reason do not constitute belief. 2.3. On the facts and circumstances of the case and in law the re-opening of the assessment is invalid and void ab initio, as Appellant had truly and fully disclosed all facts for Share Application Money, during the Original Assessment and no fresh material was found against the Appellant, to arrive at a conclusion that income had escaped assessment and the re-opening was based on a third party information. 3.1 On the facts and circumstances of the case and in law, the CIT(A) erred in not deleting the addition of Rs.3,00,00,000/- in respect of share application money received, which was treating the same as Cash Credit under section 68 of the Act without considering the facts that the Appellant and the investors had provided all the details and explanation for proving the identity, genuineness and credit worthiness of the Share Applicants. 3.2 On the facts and circumstances of the case and in law, the CIT(A) erred in not deleting the addition of Share Application money which was made mere on the assumption and surmise, based on the information received from the investigation department without considering the facts that there was no evidence or material or direct statement against the Appellant 3.3 On the facts and circumstances of the case and in law, the CIT(A) erred in not deleting the addition on the basis of the information received from the investigating department without considering the facts of the Appellant case without providing the alleged tangible material to the Appellant. 3.4 On the facts and circumstances of the case and in law, the CIT(A) erred in not deleting the addition of Share Application money based on the information received from the investigation department, without affording the said alleged statement/s recorded against the Appellant, so that there was no opportunity for Appellant to cross examine, is against the principle of natural justice. 3.5. On the facts and circumstances of the case and in law, the CIT(A) erred in not deleting the addition of Share Application money without considering the facts that entire amount was repaid, in absence of allotment of shares.

“In the course of the appellate proceedings, hearings were fixed on 26.11.2018, 18.12.2018 and again on 28.12.2018. Also, a letter dated 12.11.2018 was issued requesting the appellant to furnish certain documents. In respect of hearing on 26.11.2018, the appellant sought adjournment. For hearings on next two days, the appellant did not respond to the hearing notices in any manner. Nor did the appellant furnish the documents called for. I, therefore, presume that the appellant is not serious in prosecuting the appeal. Therefore, the appeal is disposed off based on material available on record.”

In view of the such factual scenario, we are of the considered view that the assessee may be given an opportunity to present its case before the Ld. CIT(A). Accordingly, we set aside the order of the Ld. CIT(A) and restore the matter to him to decide the issue afresh after giving reasonable opportunity of being heard to the assessee. We also direct the assessee to appear before the Ld. CIT(A) on the date fixed for hearing.