PRIME DECOR LAMINATE SERVICES PVT. LTD.,KOLKATA vs. ITO, WARD - 5(4), KOLKATA, KOLKATA

It transpires at the outset that the assessee’s instant appeal suffers for 272 days’ delay in filing stated to be attributable to serious brain surgery of its auditor / accountant. All these averments have not been disputed from the Prime Décor Laminate Services Pvt. Ltd.. Vs. ITO Wd-5(4), Kol. Page 2 Revenue side. Hon'ble apex court’s landmark judgment COLLECTOR, LAND ACQUISITION VS. Mst. KATIJI (1987) 167 ITR 471 (SC) holds that such technical aspects must make way for the cause of substantial justice. We therefore hold that the impugned delay of 272 days’ in filing is neither intentional nor deliberate but on account of severe illness of the assessee’s auditor / accountant. The same stands condoned. We take up main appeal for adjudication on merits.

The assessee’s sole substantive grievance raised in the instant appeal pleads that both the lower authorities have erred in law and on facts in treating its share capital / premium of ₹11,33,00,000/- as bogus and unexplained cash credits liable to be added u/s68 of the Act. The instant lis appears to have arisen from the CIT’s revision order / directions dated 28.03.2013 to the Assessing Officer to frame afresh assessment thereof invoking revision jurisdiction vested u/s 263 of the Act.

Learned CIT-DR invited our attention to the assessment order itself dated 26.03.2014 in para-1 that the former round of regular assessment was finalized on 26.04.2010 forming subject-matter of revision proceedings. The CIT’s findings indicate that the assessee had failed in proving genuineness / creditworthiness of its investor party(ies) turning out to be shell companies. His case accordingly is that both the lower authorities have rightly made the impugned addition in the given facts and circumstances of the case.

We have given our thoughtful consideration to rival contentions. We find that neither of the lower authorities’ action treating the assessee’s share capital / premium as bogus; deserves to be sustained in entirety. Page 6 of the assessment order contains the CIT’s revision direction to the Assessing Officer that he would “examine the genuineness and creditworthiness of the share capital; not on test check basis, but in respect of shareholders by conducting independent enquiries not through the assessee”. This Prime Décor Laminate Services Pvt. Ltd.. Vs. ITO Wd-5(4), Kol. Page 3 clinching direction has nowhere been complied with by the Assessing Officer since he has placed the entire burden on the assessee to prove genuineness / creditworthiness of the share application / premium. Mr. Roy is fair enough at this stage that the assessee shall produce its investor parties if provided one more innings before the Assessing Officer. We deem it appropriate in these peculiar circumstances that larger justice would be met if the Assessing Officer re-examines the entire issue afresh as per law within three effective opportunities of hearing. The assessee is directed to appear before the Assessing Officer on or before 15.04.2020 alongwith a copy of this order for further adjudication.