ITO, WARD 11(1), KOLKATA, KOLKATA vs. M/S SCOPE VYAPAAR PVT. LTD., KOLKATA

None appeared on behalf of the assessee. At the outset itself, the Ld. DR drew our attention to the fact that even though the matter has been listed 11 times, the assessee has not bothered to appear and that itself shows that the assessee is again carrying out the same strategy it took before the AO. It was brought to our notice that the AO has passed the order after observing that even though notices were issued and summons u/s. 131 of the Income- tax Act, 1961 (hereinafter referred to as the “Act”) were issued and neither anyone appeared on behalf of the assessee with its books of account, bank statement, copies of income tax returns etc. nor on behalf of the share subscribing companies who have subscribed shares by remitting heavy premium. Therefore, the AO had no other alternative but to make the addition of Rs.12,62,80,000/- (share capital of Rs.54,42,160/- + premium of Rs.12,08,37,840/-). However, it was brought to our notice by the Ld. DR that though one of Scope Vyapaar Pvt. Ltd., AY 2012-13 the main plea of the assessee before the Ld. CIT(A) was that (ground no. 3) the AO did not permit the assessee to produce relevant documentary evidence, papers, books of account etc. in the course of the assessment, therefore, the assessment order was bad in law for want of proper opportunity of hearing. The Ld. DR thereafter pointed out that the Ld. CIT(A) has acknowledged that the assessee had filed relevant supporting evidence before him for the first time, however, Ld. CIT(A) did not bother to even call for remand report as envisaged under Rule 46A of the I. T. Rules, 1962. We note that the AO issued summons u/s. 131 of the Act to ascertain the genuineness of the transaction and creditworthiness of the share subscribing companies and also to understand the reason for investment with such a high premium to the Principal Officer of the share subscribing Companies and called for various details like documents for identity proof and address proof, copies of documents in relation to all debit and credit entries, all relevant bank statements, copies of all relevant ROC returns, source of fund and utilisation of funds, evidence of creditworthiness along with Income Tax Returns filed and copies of Balance Sheet, P&L Account, tax audit report for the relevant assessment year and written submission regarding purpose of raising funds from the share applicant. It was brought to our notice that in para 13 the AO has specifically recorded that none appeared with its books and other documents to explain the nature and source of the credit entry appearing in the books of account. In such a scenario, when the appeal was preferred by the assessee before the Ld. CIT(A) and has raised ground no. 3 wherein it was specifically pleaded by the assessee that the AO did not permit the assessee to produce relevant documentary evidence and allowed the parties to present its case in the course of assessment proceedings, the Ld. CIT(A) before admitting the evidence which the assessee produced before him for the first time, ought to have firstly called for a remand report as envisaged under Rule 46A of the Rules before admitting additional evidence/evidence; And after admission of evidence as per law, has to again call for report from AO on the merits of the documents presented before him, which exercise the ld CIT(A) has not admittedly carried out in this case before adjudicating the appeal. Though the revenue has not raised in its grounds, the issue of violation of Rule 46A of the Rules, the Ld. DR raised it as a legal issue of Ld. CIT(A) not following the Rule 46A, which omission according to us itself vitiates the order of the Ld. CIT(A), therefore, in the interest

In the result, the appeal of the assessee is allowed for statistical purposes.