GANESHVANI EXPORTS PVT. LTD.,,KOLKATA vs. ITO, WARD - 9(2), KOLKATA, KOLKATA

At the outset itself, the Ld. AR brought to our notice that the impugned order of Ld. CIT(A) is an ex parte order and drew our attention to the affidavit filed by the assessee which reveals that assessee did not receive the notice of hearing fixed by the Ld. CIT(A) so it could not appear before the Ld. CIT(A).

It was also brought to our attention that AO has made the addition on the sole reason that director of assessee company did not appear personally before him. It was brought to our notice that necessary documents to substantiate the identity, creditworthiness and genuineness of the share capital along with premium were adduced before the AO as early as on 27.11.2014. In the affidavit, the assessee’s director has sworn that they did not receive the summon/notice u/s. 131 of the Act directing their personal appearance before the AO, so they did not appear before the AO.

So, it is the case of the assessee though they have filed all documents to discharge the onus u/s. 68 of the Act for the share capital introduced during the year, the addition was saddled on them only on the basis of non-appearance of assessee’s director before AO, which according to assessee, happened because of non-receipt of summon u/s. 131 of the Act. Therefore, no proper opportunity the assessee got during the assessment proceedings. We find force in the said contention of assessee and in the light of the averment in the affidavit, that they have filed all supporting documents before the AO on 27.11.2014, the failure to appear personally before the AO on account of assessee not receiving the summon/notice would tantamount to assessee not getting proper opportunity before the AO. In the light of the facts and circumstances as narrated above, we note that 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:

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."

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), and since the assessee did not get proper opportunity before the AO during assessment proceedings as discussed above, so 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.

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