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Income Tax Appellate Tribunal, “B”, BENCH KOLKATA
Before: SHRI S.S. GODARA, JM &DR. A.L.SAINI, AM
आदेश / O R D E R
Per Bench:
The captioned appeal filed by the assessee, pertaining to assessment year 2015-16 is directed against the order passed by the Commissioner of Income Tax (Appeal)-12, Kolkata, which in turn arises out of an assessment order passed by the Assessing Officer u/s 143(3) of the Income Tax Act, 1961 (in short the Act) dated 26/12/2017.
At the outset itself, the ld counsel for the assessee submitted that the notice for hearing has not been served on the assessee during the assessment proceedings therefore, assessee could not explain the documents and evidences submitted to Assessing Officer. The ld. Counsel also submitted before the Bench that durin ghte assessment stage the assessee furnished before Assessing Officer, the audited balance sheet, profit and loss account, bank account, bank statement and other
Hansa Textrade Pvt. Ltd. Assessment Year:2015-16 documents but the Assessing Officer failed to consider these evidences to reach on a logical conclusion. The Assessing Officer has neither examined these evidences / documents properly nor has given proper opportunity to the assessee to explain them. The ld. Counsel then took us through the findings of the Assessing Officer which is given below:
“2.2 Hence in absence of any proper clarification and for want of evidences, ‘loss on sale of share’ Rs. 78,83,700/-, so claimed as in the profit & Loss account, is considered as unexplained and added to the total income of the assessee company. The undersigned is also satisfied with the fact that this is a fit case for initiation of penalty proceedings u/s 271(1)(c ) of the Act. This penalty proceeding is being initiated separately. From bare reading of the conclusion para of the Assessing Officer, it is abundantly clear that Assessing Officer made addition solely on the ground that assessee has not furnished proper clarification and evidences. The ld. Counsel submitted that during the assessment stage, the assessee submitted each and every documents / evidences demanded by Assessing Officer; as mentioned in Para 1.2 of assessment order. However, Assessing Officer has not given proper opportunity to the assessee to explain these documents and evidences, therefore, ld. Counsel prayed the Bench that an another opportunity should be given to assessee to plead his case before the Assessing Officer.
We 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 material available on record. We note that the Assessing Officer has made addition mainly on the ground that assessee has not furnished evidences and proper clarification. We note that during the assessment stage the assessee submitted entire evidences / documents demanded by Assessing Officer, which is mentioned in Para 1.2 of assessment order which is reproduced below for ready reference:
“In response to the above mentioned notices, Mr. Praveen Kayal, A/R of the assessee company appeared from time to time and explained the return of income. He filed various details, produced books of accounts, and explained the issues brought up at the hearing stage. Further, he also furnished copies of the Audited Balance Sheet, Profit & Loss Account, Bank account details along with bank Page | 2
Hansa Textrade Pvt. Ltd. Assessment Year:2015-16 statement of the assessee company, for the relevant previous year. The same were duly checked and examined on a sample basis. The assessee company was a Non- Banking Financial company, and engaged in the business of investment and providing loans and advances, during the relevant previous year. On examination of accounts, supporting details / documents furnished in respect of the assessee company, the under mentioned issues have been noted.” So far proper clarification of these evidences is concerned we note that Assessing Officer has not provided enough opportunity to the assessee to explain these evidences therefore we are of the view that matter should be remitted back to the file of the Assessing Officer to furnish proper explanation. Therefore, relying on the judgment of the Hon’ble (three judge bench) of the Hon’ble Supreme Court in Tin Box Company Vs. CIT (2001) 249 ITR 216 (SC) wherein it was held as follows:
“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.” In the light of the judgment of Hon’ble Supreme Court in the case of Tin box Company (supra) we are of the that one more opportunity should be given to the assessee to plead his case before the Assessing Officer. The ld. DR for the revenue Page | 3
Hansa Textrade Pvt. Ltd. Assessment Year:2015-16 did not have any objection if the matter is remitted back to the file of Assessing Officer. Therefore , keeping in mind the principle of natural justice, we think it fit and appropriate to remit this issue back to the file of the Assessing Officer, and hence we set aside the order of ld. CIT(A) and remit the matter back to the file of Assessing Officer for de novo adjudication.
In the result, the appeal of the assessee is treated to be allowed for statistical purposes.
Order pronounced in the Court on 13.11.2019