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Income Tax Appellate Tribunal, “B”, BENCH KOLKATA
Before: SHRI S.S.GODARA, JM &DR. A.L.SAINI, AM
2. These two appeals relate to different assessees, but common and identical issues are involved therefore these have been clubbed and heard together and a consolidated order is being passed for the sake of convenience and brevity. The assessee’s appeal in for A.Y. 2009-10 in case of Highland Tradelink Pvt. Ltd. is taken as a lead case.
At the outset itself, the ld. Counsel for the assessee submitted that during the assessment stage the Assessing Officer has recorded the findings in para 5.3.(iv) of his order, wherein the Assessing Officer mentioned that the assessee company as well as share subscribers companies do not exist physically and they do not have electricity connection. These assessees’ companies and share subscribing companies do not have telephone connection, do not have rented office and postal address of these companies show that they do not have physical set up at their addresses. The ld. Counsel for the assessee submitted that the findings recorded by the Assessing Officer is wrong, in fact these companies have their own offices, electricity connection, telephone connection, own office and these companies are situated at the postal addresses given to the Assessing Officer. Therefore, the findings recorded by the Assessing Officer is not tenable and the assessee should be given one more opportunity to represent the facts before the Assessing Officer
Highland Tradelink Pvt. Ltd. Sumeru Retailers Pvt. Ltd. Assessment Year:2009-10 and therefore, the issue may be remitted back to the file of the Assessing Officer for de novo adjudication.
On the other hand, the ld. D.R. for the revenue objected that the Assessing Officer has recorded these findings as the assessee did not provide any evidence about their physical existence, telephone connection, electricity connection and their own offices. Per contra, the ld. Counsel submitted that these information were filed by the assessee during the assessment stage and in fact, now the assessee is ready to file these information, if one more opportunity is given to him to plead his case before the Assessing Officer.
We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials available on record.We note that Assessing Officer has made addition solely on the reason that assessee has failed to furnish evidences such as electricity connection, telephone connection, postal addresses and documents / evidences relating to physical existence of share subscribing companies. The ld. Counsel submitted before us that these documents / evidences and information were submitted by the assessee during the assessment stage but Assessing Officer has not considered the same. Therefore, we are of the view that assessee did not get proper opportunity to represent his case before Assessing Officer. Therefore, we are of the view that one more opportunity should be given to the assessee to plead his case before Assessing Officer. For that we rely on the judgment of Hon’ble Supreme Court in the case of Tin Box Co. vs. CIT reported in (2011) 116 TAXMAN 491 (SC) wherein it was held as follows:
“HELD That the assessee could have placed evidence before the first appellate authority or before the Tribunal was 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 setting out his case. Therefore, the Tribunal was not justified in not setting aside the assessment order in spite of a finding arrived at by it that the ITO had not given a proper opportunity of hearing to the assessee. Accordingly, the appeals were allowed. The order under challenge was set aside. The assessment orders, that of the Commissioner (Appeals) and of the Tribunal, were also set aside. The matter shall be remanded to the assessing authority for fresh consideration. Page | 3
Highland Tradelink Pvt. Ltd. Sumeru Retailers Pvt. Ltd. Assessment Year:2009-10 ORDER
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 straightway agree with the assessee’s submission that the ITO 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 setting 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.
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 assessee. 3. The appeals are allowed. The order under challenge is set aside. The assessment orders, 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 aforestated. No order as to costs.”
Considering the factual position as narrated above, we are of the view that one more opportunity should be given these assessees to plead their cases before the Assessing Officer. Therefore, we think it fit and proper to remit this issue back to the file of the Assessing Officer. Hence, we set aside the order of the ld. CIT(A) and remit the issue back to the file of Assessing Officer for de novo adjudication.
In the result, both the appeals are allowed for statistical purposes.
Order pronounced in the Court on 21.02.2020