VICTOR TRADELINK PVT. LTD.,KOLKATA vs. ITO, WARD - 9(2), KOLKATA , KOLKATA

The impugned order of Ld. CIT(A) is an ex parte order. The Ld. CIT (A) in order to decide the appeal ex parte has given the reason for doing so at para 2 of his order which is reproduced as under: “2. The case was fixed for hearing on 08.11.2016. The case has gone unrepresented and neither any further time was sought by way of an adjournment application. The appellant does not appear to be serious about pursuing this appeal. Hence, I proceed to decide the appeal on the basis of material on record.”

From a reading of the above reasoning, it is evident that Ld. CIT (A) fixed the hearing of the appeal only on 08.11.2016 and since none represented on behalf of assessee, has passed the ex parte order. As per the Ld. AR, the assessee did not receive any notice of hearing fixed on 08.11.2016, so the impugned order is fragile for violation of natural justice. We note that Ld. CIT (A) has not given any details of the notice issued by his office as to when it was issued and for which date it was fixed for hearing etc. or whether the notices got unserved etc. No details are mentioned by Ld. CIT (A). The Ld. CIT (A) found fault with the assessee not appearing before him on 08.11.2016 and having not filed any adjournment application came to the conclusion that assessee is not interested in pursuing the appeal which action of Ld. CIT (A) cannot be countenanced.

However, we note that AO’s investigation as per his own words as stated at page 2 is as under: “In compliance to the directions of the Ld. CIT, Kolkata-III, notice u/s. 142(1) of the Act was issued to the assessee company requiring it to appear before the undersigned, either personally or through its Authorised Representative, and furnish certain details. Summon u/s. 131 of the Act was also issued to the Directors of the company for their personal attendance. However, neither any one on behalf of the assessee nor the Directors of the assessee company appeared before the undersigned till date. Summons u/s. 131 of the Act were also issued to directors of the subscriber companies, as claimed by the assessee in the course of assessment proceeding for their personal attendance Once again none o the Directors of the subscriber companies appeared before the undersigned till date. Since there was no compliance on the part of the directors of the assessee company or the directors of the subscriber companies, there is no option but to pass the order ex parte.”

So, we note that investigation as per the guidelines of the Ld. CIT has not been adhered to by the AO that is one aspect which has been pointed out by the ld AR assailing the decision of AO.

However the main grievance of the assessee is that no proper opportunity was given to the assessee to discharge the onus casted upon it as required in sec. 68 matters. According to assessee, no statutory notices were served upon it. We note that AO has not given any details of the statutory notices, when it was issued etc., date on which it was fixed are not discernable from the investigation conducted by AO (supra) So, we are of the opinion that no proper opportunity was given to assessee by AO during the reassessment proceedings. 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:

We also note that the Hon’ble Delhi High Court in the case of CIT Vs. Jansampark Advertising & Marketing Pvt. Ltd. in dated 11.03.2015 wherein after noticing inadequate enquiry by authorities below have 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 into consideration the fact the order of the Ld. CIT passed u/s. 263 of the Act in similar cases being upheld up to the level of Apex Court, and taking note of Hon’ble Delhi High Court’s order in Jansampark Advertising &

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