ABHYUDAYA POWER PVT. LTD. ,KOLKATA vs. ITO, WARD-7(1), KOLKATA, KOLKATA

The grievance of the assessee is that ld. CIT(Appeals) has erred in dismissing its appeal ex-parte.

Brief facts of the case are that the assessee has filed its return of income on 27.09.2012 declaring total income at ‘NIL’. The case of the assessee was selected for scrutiny assessment and a notice under section 143(2) was issued and served upon the assessee. This fact has not been challenged in the present appeal. Thereafter the ld. Assessing Officer has issued notices under section 142(1) along with show-cause notices. It unearthed before the ld. Assessing Officer that the assessee had received share premium of Rs.990/- against the face value of Rs.10/- per share. According to the ld. Assessing Officer, the assessee failed to supply any document before him and accordingly an addition of Rs.1,24,00,000/- was made.

Dissatisfied with this assessment order, the assessee had originally filed an appeal before the ld. CIT(Appeals) under manual mode, i.e. physical appeal. The ld. CIT(Appeals) has called for a remand report. Thereafter the appeal was taken in faceless. Simultaneously ld. Assessing Officer has passed an order under section 271(1)(b) of the Income Tax Act by holding that assessee failed to appear in response to the notices issued under section 142(1) of the Income Tax Act. He imposed a penalty of Rs.20,000/-. Dissatisfied with that order, assessee carried the matter in appeal before the ld. CIT(Appeals). The ld. CIT(Appeals)

Assessment Year: 2012-2013 Abhyudaya Power Pvt. Ltd. vide its order dated 13.12.2022 has held that these notices were not served upon the assessee because the assessee sought evidence of dispatching of notices, which has also not been provided to it. Accordingly ld. CIT(Appeals) has deleted the penalty. Copy of this order is placed at pages no. 240 to 244 of the paper book.

Ld. Counsel for the assessee submitted that a remand report was called for by the ld. CIT(Appeals) and copy of such report is available on the record, which reads as under:- Office of the Income Tax Officer, Wd-7(1), Kolkata Aaykar Bhawan, 5th Floor,Room No.-21,P-7, Chowringhee Square,Kolkata-700069 No. ITO Wd-7(l)/2019-20/ Remand Report/164 Dated : 13/05/2019 To The Commissioner of Income Tax (A)-3 Aayakar Bhawan Kolkata-700069 Sir, [Through Addl. CIT, Range-7, Kolkata] Sub.; Factual report in case of M/s Abhyudaya Power Pvt. Ltd PAN: AAJCA1599E- A.No. 13 55/2015- 16-Asst.yr-2012-13-Matter reg. Ref: your No.CIT (A)-3/Kol/A.No.l355/W-7(l)/2018-19/l72-174 dt.25.04.2018. Kindly refer to the above. State briefly, the assessment in the instant case was made u/s.144 dt 06.02.2015 determining total income at Rs.1,24,00,000/- as against returned income at Nil. In the order of assessment the then A.O treated the share capital along with the premium amounting to Rs.1.24 crores as unexplained cash credit u/s.68 of the Act. pertaining to the assessment year in question, the notice u/s. 143(2) issued by post returned back un- served. Thereafter notice u/s. 142(1) & 131 ere served by affixation. For non compliance the assessment was subjected to be completed u/s. 144 disallowing the claim of share capital/premium raised. In the order of assessment the A.O held that during the relevant asstt. yr the assessee company issued shares of face value of Rs.10/- at a premium of Rs.990/- through there was no income nor business activity. As the basic three ingredience-1.Identity, 2.Creditworthiness with source of fund 3.Genuineness of transaction could not be established the suggested addition/disallowances were made.

Therefore, according to him, it is incorrect at the end of ld. CIT(Appeals) to record a finding that nothing has been produced by the assessee before him. Basically it appears that ld. CIT(Appeals) has not called for the record from the ld. Assessing Officer. These exercises had taken place before CIT(A) prior to appeal is being transferred to on-line system.

With the assistance of ld. Representatives, we have gone through the record carefully. Prima facie we are satisfied that proper opportunity of hearing was not granted to the assessee as discernable from the order of ld. CIT(Appeals), whereby penalty imposed under section 271(b) of the Income Tax Act for non- appearance of the assessee is deleted.

The ld. CIT(Appeals) further committed an error by not taking into consideration the assessment record, in which a remand report is still available. Thus it suggests that neither by the ld. Assessing Officer nor by the ld. CIT(Appeals) a proper opportunity has been granted to the assessee. It is also a fact that neither of the authority has recorded a finding of the fact whether receipt of share application money by the assessee is genuine or not. Therefore, faced with the above situation, we deem it appropriate to relegate this issue to the file of ld. Assessing Officer for re-adjudication.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open Court on 17/01/2024. Sd/- Sd/- (Girish Agrawal) (Rajpal Yadav) Accountant Member Vice-President (KZ) Kolkata, the 17th day of January, 2024 Copies to :(1) Abhyudaya Power Pvt. Ltd., 3/1, Dr. U.N. Brahmachari Street, Loudon Street, Kolkata-700017 (2) Income Tax Officer, Ward-7(1), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069