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Income Tax Appellate Tribunal, “B” BENCH: KOLKATA
Before: Shri A. T. Varkey, JM & Dr. A. L. Saini, AM]
ORDER Per Shri A.T.Varkey, JM
This appeal preferred by the revenue is against the order of the Ld. CIT(A)-4, Kolkata dated 12.05.2016 for AY 2008-09.
At the outset itself, the Ld. CIT, DR drew our attention to page 13 para 4.4 of the order of Ld. CIT(A) wherein the Ld. CIT(A) has clearly made a finding that before the AO the assessee did not get effective opportunity to explain the nature and source of the share application monies received by it; however, thereafter it was pointed out by the Ld. CIT, DR that Ld. CIT(A) without calling for remand report has passed the impugned order. Further, the Ld. CIT, DR drew our attention to the consistent view of this Tribunal wherein if no proper opportunity has been granted to the assessee by the AO while framing the assessment or re-assessment order, then the matter are generally remanded back to the file of AO for fresh assessment/re-assessment and wanted us to remand the matter back to AO for de novo assessment as done in similar cases. On the other hand, the Ld. AR contended that the Ld. CIT(A) has co-terminus powers as that of the AO so, even though the assessee did not get proper opportunity before the AO, the Ld. CIT(A) has taken note of the evidence
Standard Tie-up (P) Ltd., AY 2008-09 furnished before him to give relief to the assessee, so he does not want us to interfere with the order of the Ld. CIT(A).
We have heard rival submissions and carefully perused the material available on record. We note that at page 13 para 4.4, the Ld. CIT(A) has observed that the assessee did not get proper opportunity before the AO and so, the assessee was not able to render any explanation in respect to the nature and source of the share application monies received by it. We note after that the Ld. CIT(A) after perusing the evidence furnished by the assessee has decided the appeal in assessee’s favour without calling for remand report. We do not countenance this action of the Ld. CIT(A) when in the first place the Ld. CIT(A) has made a finding of fact that the assessee did not get proper opportunity before the AO, and thereafter when evidences were furnished for the first time before him, as per Rule 46A of the I. T. Rules, 1962 it was incumbent on the Ld. CIT(A) to call for remand report and thereafter decide the matter in accordance to law. Since the assessee did not get proper opportunity before the AO during assessment/reassessment proceedings relying on the Hon’ble three Judges bench decision in the case of Tin Box Company Vs. CIT (2001) 249 ITR 216 (SC), this matter needs to go back to the AO as consistently held in several other cases. The Hon’ble (three judge bench) of the Hon’ble Supreme Court in Tin Box Company Vs. CIT (2001) 249 ITR 216 (SC) has 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 ?”
Standard Tie-up (P) Ltd., AY 2008-09 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 similar case this Tribunal in in M/s. Star Griha (P) Ltd. Vs. ITO for AY 2008-09 dated 15.12.2017 has observed as under:-
……We also note that the Ld. CIT after looking into the pernicious practice of converting black money into white money has given the guidelines to AO as to how the investigation should be conducted to find out the source. Since similar order of the Ld. CIT passed u/s. 263 of the Act has been upheld by the Tribunal as well as by the Hon’ble Calcutta High Court as well as the SLP has been dismissed by the Hon’ble Supreme Court, similar order of the Ld. CIT has to be given effect to as directed by the Ld. CIT. We take note that the Ld. CIT with his experience and wisdom has given certain guidelines in the backdrop of black money menace should have been properly enquired into as directed by him. The AO ought to have followed the investigating guidelines and method as directed by him to unearth the facts to determine whether the identity, genuineness and creditworthiness of the share subscribers. We note that the Hon’ble Supreme Court (three judges bench) in the case of Tin Box, (supra), has held that since there was lack of opportunity to the assessee at the assessment stage itself, the assessment needs to be done afresh and thereby reversed the Hon’ble High Court, Tribunal and CIT(A)’s orders and remanded the matter back to AO for fresh assessment. So, since there was lack of opportunity as aforestated it has to go back to AO…….
We also note that the Hon’ble Delhi High Court in the case of CIT Vs. Jansampark Advertising & Marketing Pvt. Ltd. in dated 11.03.2015 wherein after noticing inadequate enquiry by authorities below have held as under:
“41. We are inclined to agree with the CIT(Appeals), and consequently with ITAT, to the extent of their conclusion that the assessee herein had come up with some proof of identity of some of the entries in question. But, from this inference, or form the fact that the transactions were through banking channels, it does not necessarily following that satisfaction as to the creditworthiness of the parties or the genuineness of the transactions in question would also have been established.
The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT(Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the fact of the allegations of the Revenue that the account statements reveal uniform pattern of cash deposits of equal amounts in the respective accounts preceding the transactions in question. This necessitated a detailed scrutiny of the material submitted by the assessee in response to the notice under Section148 issued by the AO, as also the material submitted at the stage of appeals, if deemed proper by way of making or causing to be made a 'further inquiry’ in exercise of the power under Section 250(4). His approach not having been adopted, the impugned order of ITAT, and consequently that of CIT(Appeals), cannot be approved or upheld."
Standard Tie-up (P) Ltd., AY 2008-09 6. In view of the aforesaid order and in the light of the Hon’ble Supreme Court’s decision in Tin Box Company (supra) and taking note of Hon’ble Delhi High Court’s order in Jansampark Advertising & Marketing Pvt. Ltd. (supra), we set aside the order of the Ld. CIT(A) and remand the matter back to the file of AO for de novo assessment and to decide the matter in accordance to law after giving opportunity of being heard to the assessee untrammeled by any observations given by Ld. CIT(A).
In the result, appeal of revenue is allowed for statistical purposes. Order is pronounced in the open court on 9th January, 2019. Sd/- Sd/- (Dr. A. L. Saini) (A. T. Varkey) Accountant Member Judicial Member Dated: 9th January, 2019 Jd.(Sr.P.S.) Copy of the order forwarded to: 1 Appellant – ITO, Ward-11(2), Kolkata 2 Respondent – M/s. Standard Tie-up (P) Ltd., 40/4, Banerjee Para Road, Kolkata-700 041. 3 CIT(A)-4, Kolkata (sent through e-mail) 4 CIT , Kolkata. DR, Kolkata Benches, Kolkata (sent through e-mail) 5