Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
Assessment Year: 2012-13 Askari Infotech Private Vs. CIT Appeals, Pune. Limited, A-1, 16 Gajalaxmi Society, Sahakarnagar, Pune- 411009. PAN : AAFCA6968H Appellant Respondent Assessee by : Shri Sanjiv Sathe Revenue by Shri Ramnath P. Murkunde : Date of hearing 14.08.2024 : Date of pronouncement : 21.10.2024 आदेश / ORDER
PER VINAY BHAMORE, JM:
This appeal filed by the assessee is directed against the order dated 11.12.2023 passed by LD. CIT(A)/NFAC for the assessment year 2012-13.
The appellant has raised the following grounds of appeal :- “Ground No. 1: - On the facts and in the circumstances of the case, the learned Commissioner of Income Tax (Appeals) erred in facts and in Law in disposing off the Appeal without giving the Appellant any opportunity whatsoever of being verbally heard in the matter inspite of a general and specific and elaborately reasoned request to be verbally heard in Appellant. While doing so he violated the Principles of Natural Justice by refusing the Appellant to be verbally heard in the First Appeal / matter on his hand. Ground No. 2: - The learned Commissioner of Income Tax (Appeals) erred on facts and in law in confirming the addition of Rs. 39,88,509.00 made by the Assessing Officer on account of accrued interest. He failed to appreciate the facts and circumstances of the matter in the correct perspective. He further failed to appreciate the contentions and submissions made by -the Appellant during Assessment proceedings as well as Appellate Proceedings. Ground No. 3: - The learned Commissioner of Income Tax (Appeals) erred on facts and in law in confirming the addition of Rs. 2,90,87,083.00 made by the Assessing Officer on account of Unexplained Investment by holding that the sources of which remain unexplained and unsubstantiated. He failed to appreciate the facts and circumstances of the matter in the correct perspective. He further failed to appreciate the contentions and submissions made by the Appellant during Assessment proceedings as well as Appellate Proceedings. Ground No. 4: - In upholding the addition of Rs. 2,90,87,083 made by the Assessing Officer to the Appellant’s income the learned Commissioner of Income Tax [Appeals] has erred on facts and in law in demonstrating an approach that is perfunctory and his reluctance to apply mind with due regard to accounting principles. His observation that the investment in 4 residential units is from unexplained and unsubstantiated sources, is premised on surmises and conjectures. Indeed, if only the learned Commissioner of Income Tax [Appeals] had understood and appreciated the fact that the reduction in the amount receivable from the Rajeev Bhale Group was tantamount to recovery of the amount owed by the Rajeev Bhale Group to the Appellant. Further, the reduction in the value of receivables from the Rajeev Bhale Group was appropriated towards the cost of acquisition of the 4 residential units by the Appellant. The learned Commissioner of Income Tax [Appeals], in his Order that is contested in this appeal, has needlessly dwelt upon the quantum of Net Working Capital and whether any change in the Net Working Capital results into suppression of income liable to tax in any previous year. Ground No. 5: - Summary Ground: - The appellant craves leave to add, amend, alter, delete, or substitute all or any of the above grounds of appeal
.”
3. The appellant has also raised the following additional grounds of appeal :- “1. In the facts and circumstances of the case and in law, the Learned AO erred in invoking the provisions of Section 144 of the Income Tax Act, 1961, while framing the order of reassessment; which forms the subject matter of this appeal.
2. Without prejudice to the aforesaid additional ground of appeal Your appellant craves leave to amend and / or alter the ground of appeal hereinabove raised or raise such other and / or further grounds of appeal, during the course of the proceedings, on the instant appeal.”
4. The facts of the case, in brief, are that the assessee is a company engaged in the business of trading as well as providing IT services to its customers. The assessee filed its return of income on 30.09.2012 declaring total income of Rs.9,62,584/-. The return of income was processed u/s 143(1) of the IT Act. On the basis of information that balance amount of money of Rs.2,15,71,692/- advanced to Rajeev Yashwant Bhale has not been reflected in the balance sheet as on 31.03.2012 and as per Profit & Loss Account the interest income of Rs.39,88,509/- have not been offered to tax for the period under consideration, therefore, the Assessing Officer has reason to believe that the assessee has not Rs.39,88,509/- in its return of income and also not shown the amount recoverable from Mr. Rajeev Yashwant Bhale in his balance sheet. Accordingly, the case was reopened u/s 147 of the IT Act after getting approval from prescribed authority and notice u/s 148 of the IT Act was issued on 31.03.2019. Thereafter, notices u/s 143(2) and 142(1) were also issued to the assessee. The Assessing Officer asked the assessee to explain the reason for not disclosing the interest income of Rs.39,88,509/- and also the capital sum of Rs.2,90,87,083/- advanced to Rajeev Yashwant Bhale was not shown in the balance sheet. The Assessing Officer issued notice fixing the date of hearing on 15.12.2019. However, the assessee remains absent on 15.12.2019 and the Assessing Officer completed the assessment by passing ex-parte order u/s 144 r.w.s. 147 of the IT Act vide order dated 19.12.2019. The Assessing Officer determined the total income at Rs.3,40,38,176/- as against the income returned by the assessee at Rs.9,62,584/-.
5. Then assessee preferred first appeal before the ld. CIT(A)/NFAC. After considering the reply of the assessee, ld. CIT(A)/NFAC dismissed the appeal of the assessee and confirmed Assessing Officer. It is this order against which the assessee is in appeal before this Tribunal.
The ld. AR submitted before us that the order passed by the ld. CIT(A)/NFAC is not correct. It was submitted that the Assessing Officer issued notice of hearing on 12-12-2019 fixing the date of hearing on 15-12-2019. It was submitted that 15-12-2019 was holiday being Sunday. Still, the counsel of the assessee appeared in the income tax office on 15-12-2019, but the guard available on the gate of the building did not permit counsel of the assessee to enter into the office premises and informed that being Sunday there is no one in the office. Therefore, the counsel of the assessee appeared before the Assessing Officer on 17.12.2019 and explained before the Assessing Officer that the date of hearing was fixed on 15.12.2019 which was a Sunday. Accordingly, the Assessing Officer assured him to issue another notice within next few days. But unfortunately the AO did not provide any other opportunity by fixing another date & the ex- parte assessment order was passed on 19.12.2019 itself. The ld. AR submitted before us that the case of the assessee was reopened on the basis of statement of Shri Rajeev Yashwant Bhale, which was recorded u/s 133(6) of the IT Act, during the course of survey, 17.12.2016. During the course of survey proceedings, two loose sheets of page nos.75 & 76 were found and impounded. These were excel sheets wherein no name was mentioned containing working of capital and interest. Shri Rajeev Yashwant Bhale in his statement recorded on oath u/s 131 of the IT Act regarding page no.75 & 76 excel sheets stated that above sheets contain working of capital and interest of M/s Askari Infotech Pvt. Ltd, but at the same time in the answer to question no.24 it was specifically denied by Shri Bhale that no such interest was paid by him and it was further stated that he has already given some assets in lieu of capital to the company Askari Infotech Pvt. Ltd.. Accordingly, it was submitted by ld. Counsel of the assessee that Shri Bhale in his statement have specifically denied to have paid such interest and also denied that any such capital is payable to the assessee by him. The ld. Counsel of the assessee further submitted that a fact sheet has already been submitted before the Bench and the same fact sheet has been verified by the Departmental Representative wherein it has been accepted that notice of hearing was issued on 12.12.2019 fixing the date of hearing only after 3 days i.e. on 15.12.2019 which was a holiday being Sunday. It was further submitted that in first appeal ground no.24 & 25 raised before the ld. CIT(A)/NFAC it was specifically mentioned that the Assessing Officer has erred in calling the assessee to attend his office on a public holiday i.e. Sunday and in ground no.25 it was mentioned that the Assessing Officer given absolutely inadequate time of just 3 days to comply the notice. But the ld. CIT(A)/NFAC overlooked both these grounds and did not adjudicate these two grounds, & dismissed the appeal of the assessee. The ld. Counsel of the assessee submitted that it is clear cut violation of principles of natural justice to call the assessee on a public holiday and when this fact was brought to the knowledge of the Assessing Officer he passed ex-parte order without providing any further opportunity of hearing to the assessee. The ld. Counsel of the assessee also submitted that a specific request was also made before the ld. CIT(A)/NFAC for providing opportunity of video conferencing but the same was also not considered. In the light all the above facts, ld. Counsel prayed before the Bench to set-aside the order passed by both the subordinate authorities and requested the Bench to remand the matter back to the file of the Assessing Officer to pass a fresh order so that the assessee can submit requisite documents in support of its contentions.
7. The ld. DR relied on the orders passed by the subordinate authorities and requested to confirm the same.
We have heard ld. Counsel from both the sides and perused the material available on record, including the paper book furnished by the assessee. We find that the entire reassessment proceedings was the offshoot of a statement recorded by one Shri Rajeev Yashwant Bhale during the course of survey action dated 17.12.2016 wherein two sheets alleged to have been impounded by the survey team from the office of the said Shri Bhale. These 2 sheets i.e. page no.75 & 76 was the excel sheet which contain the working of capital and interest, said to have been claimed by the assessee from Shri Rajeev Yashwant Bhale. In his statement recorded during the course of survey, Shri Bhale in the answer to question no.24 specifically denied that any such transaction ever took place. It was further stated that he has already given some assets in lieu of capital to the company. In this regard, the contention of the ld. Counsel of the assessee that the assessee company was providing services to Shri Rajeev Yashwant Bhale for past so many years upto the financial year 2010-11 and a large amount become overdue from Shri Rajeev Yashwant Bhale to the assessee company. The assessee company has also filed some Shri Rajeev Yashwant Bhale and in lieu of the overdue balances Shri Rajeev Yashwant Bhale has transferred four flats to the assessee company during F Yr 2010-11 and no interest as mentioned in the excel sheets was received from Shri Rajeev Yashwant Bhale and the same was never claimed from Shri Rajeev Yashwant Bhale. Even in his statement, Shri Bhale has denied regarding any such transaction. Accordingly, it was contended that the addition made by ld. Assessing Officer and sustained by ld. CIT(A)/NFAC was unwarranted, illegal and bad in law. It was also the contention of the ld. Counsel of the assessee that notice u/s 148 was issued to the assessee on 31.03.2019 at 5:35 PM and thereafter each and every notice issued by the Assessing Officer was complied with by the assessee. But the last notice which was issued on 12.12.2019 fixing the date of hearing on 15.12.2019 was unfortunately fall on Sunday, but still the counsel of the assessee obeyed the notice and reached at income tax office along with all the documents but the guard did not permit him to enter the premises and informed that office is closed being holiday and there is no one in the office. The ld. AR further contended that counsel of the assessee again appeared before the Assessing Officer on 17.12.2019 and requested to provide another date so that the requisite documents can be furnished. But for the surprise of the assessee the Assessing Officer passed ex-parte order of assessment on 19-12-2019. It is worthwhile to mention here that the fact sheets furnished by the assessee was forwarded by the ld. DR to the jurisdictional Assessing Officer for verification of facts mentioned in the sheets and in reply the Assessing Officer has verified the fact that notice dated 12.12.2019 fixing the date of hearing on 15.12.2019 was issued by the Assessing Officer and the date so fixed i.e. 15.12.2019 was a Sunday. We find that it was the duty of the Assessing Officer to fix another date on a working day but surprisingly it was mentioned in the ex-parte order that the assessee remained non-compliant. Considering the totality of the facts, we are of the considered opinion that proper opportunity of hearing was not allowed to the assessee and clear cut violation of rules of natural justice took place. We also find that the assessee has raised specific ground in this regard before the ld. CIT(A)/NFAC but ground no.24 & 25 were not considered by ld. CIT(A)/NFAC. We therefore without going into the merits of the case deem it proper to set-aside the order passed by ld. CIT(A)/NFAC and remand the matter back to the file of the Assessing Officer with direction to pass assessment order afresh