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Income Tax Appellate Tribunal, “A” BENCH: KOLKATA
Before: Shri A. T. Varkey, JM & Dr. A.L. Saini, AM]
आयकर अपील�य अधीकरण, �यायपीठ – “A” कोलकाता, IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH: KOLKATA (सम� �ी ए.ट�. वक�, �या�यक सद�य एवं डॉ ए.एल. सैनी, लेखा सद�य) [Before Shri A. T. Varkey, JM & Dr. A.L. Saini, AM] Assessment Year: 2012-13 S.P. Electrodes Pvt. Ltd. ITO (Previously Rukhmani Electrodes Pvt. Ltd.) Ward-14(3), 2A, Ganesh Chandra Avenue, Kolkata. Vs. Shop No. 12, Ground Floor, Kolkata-700 013. (PAN: AACCR 9298 L) Appellant Respondent For the Appellant Shri Miraj D. Shah, AR For the Respondent Shri Supriyo Pal, JCIT, Sr. DR Date of Hearing 22.10.2019 Date of Pronouncement 22.11.2019 ORDER Per Shri A.T.Varkey, JM:
This appeal preferred by the assessee is against the order of the Ld. CIT(A)-5, Kolkata order dated 31.01.2017 for Assessment Year (hereinafter ‘AY’) 2012-13.
At the outset itself, the Ld. AR brought to our notice that the impugned order was an ex-parte order passed by the Ld. CIT(A). It was also brought to our notice that the AO has drawn adverse inference against the assessee because summons u/s 131 of the Income Tax Act 1961 ( herein after ‘Act) were not complied with. According to the Ld. AR, all the documents to prove identity, creditworthiness and genuineness were duly filed before the AO who had acknowledged this fact at page 3 of his order at para 2.2.1 where he remarked as under:
As discussed in para 2.1.2 above, out of 6 notices sent by speed post to these investors, finally 1 remained non-compliant. Even for the 5 cases which either complied after issuance of show cause notice to the assessee or details of which were filed by the assessee, there remains reasonable doubt about their existence, creditworthiness and genuineness of transaction.
Assessment Year: 2012-13 S.P. Electrodes Pvt. Ltd. (Previously Rukhmani Electrodes Pvt. Ltd.) 3. Further, the Ld. AR undertakes before us to produce the share subscribers before the AO if given an opportunity to do so and pleaded that due to lack of proper opportunity at the assessment stage, the addition was made against the assessee. According to Ld AR, since the assessee did not get proper opportunity before the AO to produce the share subscribers before him, adverse view was taken despite the assessee had filed all the documents to discharge its onus casted upon it u/s 68 of the Act. So he pleaded that assessment may be remanded the back to the file of the AO for de novo assessment and relied on the case of Tin Box Company Vs. CIT (2001) 249 ITR 216 (SC). We note that in the case of Tin Box (supra) the Hon’ble Supreme Court held as under:
“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 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. 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 aforestated.”
After having heard both the parties, we note that the AO during the assessment proceedings have drawn adverse inference against the assessee mainly due to non- appearance of the directors of the share-subscribing companies which is evident from Assessment Year: 2012-13 S.P. Electrodes Pvt. Ltd. (Previously Rukhmani Electrodes Pvt. Ltd.) para 2.1.5, despite the fact that out of six (6) notices sent by the AO u/s 133(6) of the Act, five (5) have complied with by filing documents to prove the identity, creditworthiness and genuineness of the transaction. According to the Ld. AR, since the directors were summoned at the fag end of the assessment (26th February, 2015), some were out of station and others were held up for personal reasons which prevented them from appearing before the AO. Taking into consideration these facts and also taking note that out of 6 share-subscribers to whom the AO had sent notice u/s 133(6) of the Act, 5 have complied with the direction of the AO, we are of the opinion that assessee should be given proper opportunity at the assessment stage. So, we set aside the order of the Ld. CIT(A) and remand the matter to AO for de-novo assessment and Ld. AR is directed to produce the directors of the share-subscribers as undertaken before us and the AO to frame the assessment in accordance to law after hearing the assessee.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order is pronounced in the open court on 22 November, 2019.