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Income Tax Appellate Tribunal, KOLKATA ‘D’ BENCH, KOLKATA
Before: Shri P.M. Jagtap & Shri A.T. Varkey
Date of concluding the hearing : May 28, 2018 Date of pronouncing the order : May 28, 2018
O R D E R Per Shri P.M. Jagtap, A.M. :- This appeal filed by the assessee is directed against the order of ld. Commissioner of Income Tax (Appeals)-2, Kolkata dated 04.01.2017 passed ex-parte.
The assessee in the present case is a Company, which filed its return of income for the year under consideration on 24.09.2012 declaring total income of Rs.5,081/-. During the course of assessment proceedings, the claim of the assessee of having received share capital of Rs.1,12,50,000/- and share premium of Rs.43,87,50,000/- was examined by the Assessing Officer. On such examination, he recorded his findings/observations as under:- “The assessee company is a closely held company in which public are not substantially interested. Keeping this in Assessment year: 2012-2013 Page 2 of 4
consideration, notice under section 131 were issued and sent to the assessee requiring it to appear personally along with all the Principal Officers, Directors of all the investor companies and/or individual investors as the case may be for the purpose to primarily verify the identity and credit worthiness of the shareholders and genuineness of the transaction made by them in the assessee company, as well as analysis of various entries in bank statements, cash book, ledger etc. for ascertainment of primary sources ,reasons for raising capital , rationality of reasons for investment by the investors ,procedure and certifications involved in respect of calculation and determination of such a high premium amount in their respective parts for business and financial justification etc in presence and discussion with all the directors at a time for the purpose of providing the opportunities of cross interaction and cross examination regarding above especially for ascertaining primary sources etc. However, inspite of having opportunities the assessee failed to justify his return with the evidences as discussed which will justify the primary sources etc of its capital raised”.
On the basis of the findings/observations as recorded above, the Assessing Officer treated the share capital and share premium aggregating to Rs.45 crores as unexplained cash credits and added the same to the total income of the assessee in the assessment completed under section 143(3) vide an order dated 19.03.2015.
Against the order passed by the Assessing Officer under section 143(3), an appeal was preferred by the assessee before the ld. CIT(Appeals) and since there was no compliance on the part of the assessee to the notices issued by the ld. CIT(Appeals) fixing the said appeal for hearing from time to time, the later dismissed the appeal of the assessee vide his appellate order dated 04.01.2017 passed ex-parte. Aggrieved by the order of the ld. CIT(Appeals), the assessee has preferred this appeal before the Tribunal.
We have heard the arguments of both the sides and also perused the relevant material available on record. The ld. Counsel for the assessee has submitted that none of the notices of hearings sent by the ld.
Assessment year: 2012-2013 Page 3 of 4 CIT(Appeals) was ever served on the assessee and this position is clearly evident from the relevant portion of the impugned order of the ld. CIT(Appeals), where he has clearly stated that the notices issued by him could not be served as the assessee was moved/not found. As submitted by the ld. Counsel for the assessee in this regard, the notice of hearing fixed today before the Tribunal sent to the same address as was furnished before the ld. CIT(Appeals), however, has been duly served on the assessee well in time. In any case, the fact that remains to be seen is that none of the notices issued by the ld. CIT(Appeals) fixing the appeal of the assessee for hearing from time to time was served on the assessee and there was thus a sufficient cause for the non-compliance on the part of the assessee to the said notices. As rightly pointed out by the ld. D.R., there was similar non-compliance on the part of the assessee even before the Assessing Officer during the course of assessment proceedings and the Assessing Officer thus did not get an opportunity to fully verify the claim of the assessee of having received share capital and share premium aggregating to Rs.45 crores. We, therefore, set aside the impugned order of the ld. CIT(Appeals) and restore the matter to the file of the Assessing Officer with a direction to decide the issue relating to the assessee’s claim for receipt of share capital and share premium aggregating to Rs.45 crores afresh on merit after giving one more opportunity of being heard to the assessee. As undertaken by the ld. Counsel for the assessee, the assessee shall make a due compliance before the Assessing Officer and shall extend all the possible cooperation in order to enable him to decide the matter expeditiously on merit.
In the result, the appeal of the assessee is treated as allowed for statistical purposes. Order pronounced in the open Court on May 28, 2018.