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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 and the stay application preferred by the assessee is against the order of the Ld. CIT(A)-14, Kolkata dated 29.12.2017 for AY 2008-09.
The sole ground of appeal of assessee is against the order of Ld. CIT(A) in confirming the addition made by the AO of a sum of Rs.96,93,00,000/- on account of share capital/application money treated as unexplained cash credit u/s. 68 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and upholding the reopening of assessment u/s. 148 of the Act.
At the outset itself, though stay application has been filed along with the appeal, the Ld. AR brought to our notice that in similar cases this Tribunal has been consistently remanding the matter back to AO after taking note that since no proper opportunity of hearing was granted to the assessee during the course of assessment proceedings, the entire assessment need to be remanded back to the file of the AO for de novo framing of SA No.130 of 2018 Kaveri Hire Purchase & Deposits Pvt. Ltd., AY 2008-09 assessment. We note that the AO pursuant to the order of Ld. CIT passed u/s. 263 of the Act dated 08.03.2013 has issued the first notice u/s. 142(1) of the Act dated 20.01.2014 and a second notice which was termed final reminder on 27.01.2014. Thereafter the AO issued summons u/s. 131 of the Act to the Directors of the assessee company as well as the share subscribing companies on 21.02.2014. Thereafter, the AO after acknowledging receipt of letter from assessee dated 20.02.2014 with some details was of the opinion that it was neutral in nature and according to him, was not sufficient to prove the identity, creditworthiness and genuineness of the share capital. Thereafter, the AO framed the re- assessment order on 21.03.2014. We note that Ld. CIT while passing the order u/s. 263 of the Act has given detailed guidelines how to investigate the matter, which has not been carried out by the AO. As aforerstated, only two notices and a summon were issued by AO and even though the assessee had complied by filing details, the AO has not even bothered to discuss what were the details filed by the assessee before him, in-order to draw adverse inference against the assessee. In the light of the aforesaid facts, we note that no proper opportunity has been granted to the assessee company and the Ld. AR relied on the decision of the Hon’ble three Judges Bench’s decision in Tin Box Company Vs. CIT (2001) 249 ITR 216 (SC) wherein the Hon’ble Supreme Court 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 ?” 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.
SA No.130 of 2018 Kaveri Hire Purchase & Deposits Pvt. Ltd., AY 2008-09 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.”
The Ld. CIT, DR after hearing the ld AR, has not on principle opposed the disposal of the appeal while stay application along with Appeal was listed for hearing, however, contended that the appeal may be restored back to the Ld. CIT(A). Taking into consideration the facts and circumstances of the case as discussed above and since no proper opportunity has been granted to the assessee company as found by us, relying on the aforesaid order of Hon’ble Supreme Court Tin Box Company (supra), we set aside the impugned order and remand the matter back to AO to de-novo frame the assessment. Needless to say, the assessee to be provided adequate opportunity of hearing and the AO to pass the assessment order afresh. Since we are disposing of the appeal itself, stay application has become infructuous and so is dismissed. Appeal of assessee is allowed for statistical purposes.
In the result, the appeal of assessee is allowed for statistical purposes and stay application of assessee is dismissed. Order pronounced in the open court on 9th January, 2019.