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Income Tax Appellate Tribunal, KOLKATA BENCH “A” KOLKATA
Before: Shri J.Sudhakar Reddy & Shri S.S.Godara
Shri N.P. Jain, Advocate & अपीलाथ� क� ओर से/By Appellant Shri R.K. Nahar, Advocate Shri Radhy Shyam, CIT-DR ��यथ� क� ओर से/By Respondent 18-02-2019 सुनवाई क� तार�ख/Date of Hearing 03-05-2019 घोषणा क� तार�ख/Date of Pronouncement आदेश /O R D E R PER S.S.Godara, Judicial Member:- This assessee’s appeal for assessment year 2012-13 arises against the Commissioner of Income Tax (Appeals)-10, Kolkata’s order dated 30.10.2017 passed in case No.706/CIT(A)-10/Wd.4(4)/12-13/17-18/Kol, involving proceedings 143(3) of the Income Tax Act, 1961; in short ‘the Act’. Heard both the parties. Case file(s) perused.
The assessee’s sole substantive grievance raised in the instant appeal challenges correctness of both the lower authorities’ action treating its share capital / M/s Quest Financial Services Ltd. Vs ACIT, CC-3(1), Kol. Page 2 premium of ₹123,331,65,000/- as unexplained cash credits u/s. 68 of the Act. It transpires at the outset that the CIT(A) has passed his lower appellate order ex parte whilst affirmation the impugned addition. We notice from para-3 page 6 of the lower appellate order that it was the CIT(A)-2, Kolkata had taken up the assessee’s lower appeal for hearing on two occasions which stood adjourned at the taxpayer’s petition. The case was thereafter transferred to CIT(A)-10 Kolkata. He issued notice of hearing on 26.01.2017. Nobody appeared at assessee’s behest. This is what made CIT(A)’s to confirm the impugned unexplained share capital / premium addition in issue.
Learned counsel vehemently contends during the course of hearing that the assessee had filed its voluminous evidence in support of identity, genuineness and creditworthiness of the impugned sums during the course of assessment as well as in the lower appellate proceedings. Coupled with this, it is stated to be a case involving share capital sequel to the hon'ble jurisdictional high court’s order dated 22.09.2011 approving the scheme of merger forming part case records before us. Mr. Jain accordingly pleads that both the Assessing Officer as well as CIT(A) have erred in law as well as on facts in treating the said amount in issue as unexplained cash credits u/s68 of the Act. Coming to CIT(A)’s findings, the assessee’s case is that latter CIT(A) (supra) had nowhere got actual service of notice on the assessee and passed his lower appellate order ex parte without reverting to all the clinching facts as per detailed evidence forming part of record.
The Revenue on the other hand strongly supports the impugned addition made in both the lower proceedings.
We have given our thoughtful consideration to rival contentions. The Revenue first of all fails to dispute the clinching fact that latter CIT(A) (supra) could not serve the relevant hearing notice on the assessee before passing his impugned order. There is no adjudication in either of the two lower proceedings about the sole issue raised in the instant case the sec.68 of the Act does not apply its amalgamation scheme approved by hon'ble jurisdictional high court’s order increasing assessee’s capital to M/s Quest Financial Services Ltd. Vs ACIT, CC-3(1), Kol. Page 3 ₹123,31,65,000/-in case of M/s Rewards Agencies Ltd. as the necessary sequel. We conclude in these peculiar facts that the Assessing Officer needs to verify all these crucial facts and re-adjudicated upon the entire issue afresh as per law after affording adequate opportunities of hearing to the taxpayer. We order accordingly. We make it clear that assessee shall be entitled to file all the relevant details in consequential order proceedings as well.