ATMAN OVERSEAS P.LTD,MUMBAI vs. ITO 6(1)(4), MUMBAI

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ITA 5410/MUM/2015Status: DisposedITAT Mumbai23 February 2018AY 2009-105 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the CIT(A) order was passed ex-parte without giving the assessee an opportunity of being heard. Therefore, the order was set aside, and the matter was remanded back to the CIT(A) for fresh adjudication.

What were the facts?

The assessee's appeal was against the CIT(A)'s order confirming the reopening of assessment and additions made for alleged bogus purchases. The CIT(A) had dismissed the assessee's appeal without providing an opportunity to be heard.

What were the issues?

Whether the CIT(A) order is sustainable when passed without affording the assessee an opportunity of being heard. Whether the reopening of assessment and additions were legally valid.

Which sections of the Income-tax Act were involved?

Section 147,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “E” BENCH, MUMBAI

Before: SHRI SHAMIM YAHYA, AM & SHRI AMARJIT SINGH, JM

Hearing: 29.11.2017Pronounced: 23.02.2018

O R D E R

PER AMARJIT SINGH, JM:

1.

The assessee has filed the present appeal against the order dated 28.09.2015, passed by the Commissioner of Income Tax (Appeals)-12 Mumbai [hereinafter referred to as the “CIT(A)”] relevant to the AY. 2009-10.

2.

The assessee has raised the following grounds:- “

1. The learned CIT(A}-12, Mumbai [CIT{A)] erred in confirming the order of the ITG and dismissing the Appeal.

2. The learned C1T(A) erred in not appreciating facts of the case properly and the law applicable thereto.

ITA. No.5410/M/15 A.Y.2009-10

3.

The learned CIT(A) erred in upholding re-opening of assessment u/s.147 by the AO as legally valid. He ought to have appreciated that merely on the basis of information from Sales Tax Department and without any further inquiry the AO could not have formed the belief that any income had escaped assessment and therefore the CIT(A) erred in upholding the order of AO, 4. The learned CIT(A) ought to have appreciated that the AO had made additions without substantial and/or adequate evidence to prove various purchases made by the appellant were not genuine. 5. The learned CIT(A) ought to have appreciated that in similar cases the Tribunals including Mumbai Appellate Tribunal have been passing decisions against the department holding that merely on the basis of reporter information from an authority and without bringing on record positive evidence to the prove the alleged bogus purchases were wrong, incorrect and unreasonable. 6. The order passed by CIT(A) is illegal and vitiated by law as no adequate opportunity was given to the appellant. She ought to h have appreciated that with jurisdictional changes that intervened assessments and appeals and within appellate authorities, she ought to have given adequate opportunity to the appellant before dismissing the appeal.” 3. The brief facts of the case are that the assessee filed its return of income on 30.09.2009 declaring total income to the tune of Rs.7,31,710/- for the A.Y. 2009-10. The return was processed u/s 143(1) of the I.T. Act, 1961 dated 10.03.2011 resulting in a refund of Rs.27,820/-. A notice u/s 148 of the I.T. Act, 1961 was issued on 22.02.2013. In response to the said notice, the assessee filed his return of income originally filed on 30.09.2009. Thereafter, notice u/s 143(2) of the Act dated 03.04.2013 was issued and served upon the assessee. A notice u/s 142(1) of the Act along with a questionnaire was issued

ITA. No.5410/M/15 A.Y.2009-10 and served upon the assessee. The case of the assessee was reopened on the following reasons:-

“4 As requested assessee was also provided the reasons recorded on 22.02.2013, vide letter dated 10.02.2014, the same is reproduced as under:- “From the details regarding bogus purchase received from Sales Tax Department, it is seen that M/s. Atman Overseas Pvt. Ltd. has been taken accommodation entries from the following concerns the details of which is as under:- Name of the F.Y. involved Amount of purchase purchase party involved Ridhi 2008-09 28,39,416 Enterprises To make further enquiries with regard to bogus purchase entries by the assessee company amounting to Rs.28,39,416/- pertaining to F.Y.2008-09 relevant to A.Y. 2009-10, a survey action u/s 133A was conducted on 29.11.2012. In the survey proceedings assessee has neither produced books of accounts nor able to give satisfactory explanation in respect of the purchases. Till date assessee has not produced books of accounts in support of its claim. Therefore, it is proven fact that these purchases are bogus purchase and assessee has suppressed the profit to that extent. I am therefore, reason to believe that an income to the extent of Rs.28,39,416/- chargeable to tax has escaped assessment for A.Y. 2009-10. Hence to assess this income notice u/s 148 is issued.”

4.

After the receipt of the notice, the assessee filed the reply to the notice and the Assessing Officer raised the addition to the tune of Rs.28,39,416/- in view of provision 69C of the Act. The Total income of the assessee was assessed to the tune of Rs.35,71,130/-. Thereafter, the assessee filed an appeal before the CIT(A) who dismissed the appeal by ITA. No.5410/M/15 A.Y.2009-10 virtue of order dated 28.09.2015, therefore, the assessee has filed the present appeal before us.

5.

We have heard the argument advanced by the Ld. Representative of the parties and perused the record. At the very outset, the Ld. Representative of the assessee has argued that the CIT(A) has passed the order dated 28.09.2015 without giving an opportunity of being heard to the assessee, therefore, in the said circumstances the order dated 28.09.2015 is not liable to be sustainable in the eyes of law. However, on the other hand, the Ld. Representative of the Department has refuted the said contention. On appraisal of the order dated 28.09.2015, we noticed that the order dated 28.09.2015 has been passed in the absence of the assessee as well as in the absence of the Ld. Representative of the Department. No opportunity of being heard was given to the assessee given to the assessee. The assessee is claiming to be an opportunity before the CIT(A). Since the order in question has been passed by the CIT(A) ex-parte without giving an opportunity of being heard to the assessee, therefore, we are of the view that an opportunity of being heard is required to be given before passing the order in the interest of justice. Therefore, we set aside the order in question and remand the issue before the CIT(A) to decide a matter afresh by giving an opportunity of being heard to the assessee in accordance with law.

ITA. No.5410/M/15 A.Y.2009-10

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