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Income Tax Appellate Tribunal, KOLKATA BENCH (A
Before: Shri P.M. Jagtap & Shri S. S. Godara, JM]
order
: February 27, 2019 ORDER
Per P.M. Jagtap, Vice President
This appeal filed by the assessee is directed against the order of Ld. CIT(A) – 17, Kolkata dated 09.03.2017 passed ex-parte dismissing the appeal of the assessee.
The assessee in the present case is a company which filed its return of income for the year under consideration on 14.01.2009 declaring a loss of Rs. 5,748/-. In the assessment originally completed u/s 143(3)/147 vide an order dated 15.09.2010, the total income of the assessee was determined by the AO at Rs. 6,052/-. The said assessment was subsequently set aside by the concerned Ld. CIT vide an order dated 30.03.2013 passed u/s 263 with the direction to the AO to make the assessment afresh after making necessary enquiry on the issue of share capital and share premium aggregating to Rs. 5,58,50,000/- received by the assessee during the year under consideration. As per the order of the Ld. CIT passed u/s 263, notice
2 M/s. Orbit Traders Pvt. Ltd. Assessment Year: 2008-09 u/s 142(1) was issued by the AO which was duly responded by the assessee by filing the relevant details, Summons u/s 131 of the Act were also issued by the AO to the then directors of the assessee company but the same remained uncomplied with. The AO, therefore, held that the share capital and share premium aggregating to Rs. 5,58,50,000/- had remained unexplained in terms of section 68 and addition to that extent was made by him to the total income of the assessee in the assessment completed u/s 143(3)/147/263 of the Act vide an order dated 31.03.2014.
3. Against the order passed by the AO u/s 143(3)/147/263 of the Act, an appeal was preferred by the assessee before the Ld. CIT(A) and since there was no satisfactory compliance to the notices issued by the Ld. CIT(A) fixing the said appeal for hearing from time to time, the Ld. CIT(A) dismissed the appeal of the assessee vide his appellate order dated 09.03.2017 passed ex-parte thereby confirming the addition of Rs. 5,58,50,000/- made by the AO u/s 68. Aggrieved by the order of the Ld. CIT(A), the assessee has preferred this appeal before the Tribunal.
We have heard the arguments of both the sides and also perused the relevant material available on record. The learned counsel for the assessee has submitted that the notices fixing the hearing of the assessee’s appeal before the Ld. CIT(A) were never received by the assessee and this fact further gets fortified from the impugned order of the Ld. CIT(A) wherein he has clearly mentioned that the notices sent to the assessee were returned by the postal
3 M/s. Orbit Traders Pvt. Ltd. Assessment Year: 2008-09 authority for want of sufficient address. The learned counsel for the assessee has also submitted that the order of assessment originally passed by the AO u/s 143(3)/147 was set aside by the Ld. CIT vide an order dated 30.03.2013 passed u/s 263 for completing the assessment afresh as per the following direction: “1. Examine the genuineness and source of share capital, not on a test check basis, but in respect of each and every shareholder by conducting independent enquiry not through the assessee. The bank account for the entire period should be examined in the course of verification to find out the money trail of the share capital.
2. Further the AO should examine the directors as well as examine the circumstances which necessitated the change in directorship if applicable. He should examine them on oath to verify their credentials as director and reach a logical conclusion regarding the controlling interest.
The AO is directed examine the source of realization from the liquidation of assets shown in the balance sheet after the change of directors, if any. After conducting the enquiries & verification as directed above, the AO should pass a speaking order, providing adequate opportunity of being heard to the assessee.”
A perusal of the assessment order passed by the AO u/s 143(3)/147/263 however shows that the AO has not complied with the above direction specifically given by the Ld. CIT(A) in the order passed u/s 263 and even the learned DR has not been able to dispute this position. We, therefore, consider it fair and proper and in the interest of justice to set aside the impugned order passed by the Ld. CIT(A) ex-parte and restore the matter to the file of the AO for completing the assessment afresh as per this specific direction given by the Ld. CIT(A) in the order passed u/s 263.
4 M/s. Orbit Traders Pvt. Ltd. Assessment Year: 2008-09
In the result, the appeal of the assessee is treated as allowed for statistical purpose.
Order Pronounced in the Open Court on 27th February, 2019.