SMT. SUNITA THAPAR,LUDHIANA vs. DCIT, C-5, LUDHIANA

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ITA 376/CHANDI/2018Status: DisposedITAT Chandigarh26 June 2018AY 2009-103 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that the reopening was based on the AO's conclusion in another case without independent application of mind or confronting the assessee with material. In the absence of relevant discussion and evidence in the orders, the veracity could not be tested.

What were the facts?

The Assessing Officer (AO) reopened the assessee's cases based on the conclusion that a company with which the assessee had transactions was a sham. The assessee contended that they provided documentary evidence for genuine share transactions, but this was not considered. The CIT(A) confirmed the AO's action.

What were the issues?

Whether the reopening of assessment was valid without independent application of mind by the AO and proper confrontation of material to the assessee. Whether the CIT(A) erred in confirming the addition without considering the assessee's evidence.

Which sections of the Income-tax Act were involved?

Section 147,Section 148

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, SMC, CHANDIGARH

Before: MS. DIVA SINGH

For Appellant: Shri Sudhir Sehgal
For Respondent: Shri Manoj Kumar
Hearing: 19/06/2018Pronounced: 26/06/2018

IN THE INCOME TAX APPELLATE TRIBUNAL SMC, CHANDIGARH BEFORE MS. DIVA SINGH, JUDICIAL MEMBER ITA No. 376 to 380/Chd/2018 (Assessment Years: 2009-10 to 2010-11 & 2012-13 to 2014-15)

Smt. Sunita Thapar Vs. The DCIT C/o M/s Amar Udyog C-5, Ludhiana GT Road, Dhandari Kalan Punjab Ludhiana, Punjab PAN No. ABNPT2368J

(Appellant) (Respondent)

Assessee By : Shri Sudhir Sehgal Revenue By : Shri Manoj Kumar Date of hearing : 19/06/2018 Date of Pronouncement : 26/06/2018

ORDER PER DIVA SINGH, J.M.

By these 5 appeals filed by the Assessee pertaining to 2009 – 10 to 2014 – 15 Assessment Years the correctness of the separate orders dated 05/02/2018, of CIT(A)-2, Ludhiana is assailed on identical grounds. It was a common stand of the parties before the Bench that the grounds raised in each of these appeals are identical. Accordingly for the sake of convenience grounds from ITA 376/Chd/2018 are being reproduced hereunder:

1.

That the Ld. Commissioner of Income Tax (Appeals) has erred in confirming the action of the Assessing Officer with regard to the reopening of the case u/s 147/148 of the Act. 2. That the Ld. CIT(A), has further erred in not considering that there was no cogent material with the Assessing Officer to form his belief and reason to believe that the income of the assessee has escaped assessment. 3. That the Ld. Assessing Officer has merely acted on the observation of the Investigation Wing and there is no independent application of mind by the concerned Assessing Officer. 4. That the Ld. CIT(A) has grossly erred in holding that the appellant could not bring any material to prove the genuineness of transaction and whereas the assessee submitted all the documentary evidences to prove beyond any iota of doubt that the purchase and sale of shares of the company were genuine and hence the addition of Rs.76,009/- as confirmed by the CIT(A) is against the facts and circumstances of the case.

ITA No. 376 to 380/Chd/2018 2 of 3

2.

The Ld. AR inviting attention to the impugned order as well as the assessment order submitted that the conclusions drawn by the Assessing Officer and the CIT(A) for reopening the case is on the opinion that since the assessee had transactions with M/s Compact Disc. Pvt. Limited income has escaped assessment as the said company was a Sham Company. For the said purposes attention was invited to the respective orders of the tax authorities. It was his submission that nothing has been placed on record by the department or confronted to the assessee that the conclusions were based on facts and not conjecture or surmises. The mere discussion on record is that the assessing officer has referred to the fact that the assessing officer in the case of M/s Compact Disc. Pvt. Limited has reopened the assessment. It was his submission that the assessee has been petitioning the Assessing Officer to confront the assessee with the relevant facts and evidences to support the conclusions drawn despite that till date nothing has been shared. The assessee it was submitted has transacted over the years by buying and selling shares of the said concern in the normal course and what is the basis of the conclusion of the AO it was submitted is not available on record. Accordingly referring to the orders it was his submission that there is no discussion on the said aspect in the orders. In the circumstances it was his prayer that the assessee either may be granted time or alternately relevant information be directed to be placed before the Bench or the appeal of the assessee be allowed by granting necessary relief in accordance with law.

3.

The Ld. Sr. DR though placed heavy reliance upon the orders of the Assessing Officer and the CIT(A), however for want of relevant discussion in the orders was unable to support the conclusions drawn. Accordingly it was his prayer that the matters may be remanded however relief at this juncture on the pleadings of the assessee it was submitted may not be granted.

4.

I have heard the submissions and perused the material available on record, on going through the same I find that the Assessing Officer has reopened the assessment in the facts of the present case on the basis of the conclusions of the Assessing Officer in the case of M/s Compact Disc. Pvt. Limited. I find that there is no reference to any fact evidence or material in fact there is no discussion whatsoever in the orders which can lead to the conclusion that the transactions of buying and selling shares of the said concern by the

ITA No. 376 to 380/Chd/2018 3 of 3

assessee per se are Sham transactions. Since the correctness of the Assessing Officer’s conclusion assailed in appeal are under challenge in the present proceedings and in the absence of relevant discussion the issue cannot be adjudicated upon. The parties were also unable to address the fate of the reopened assessment in the case of M/s Compact Disc. Pvt. Limited. Thus in the absence of relevant discussion in the orders the veracity of the evidences relied upon by the Assessing Officer and the CIT(A) cannot be tested at this stage. Accepting the oral prayer of the parties before the Bench the impugned order is set aside back to the file of the Assessing Officer with a direction to pass an order in accordance with law denovo addressing the facts and evidences and after duly confronting the same to the assessee. Needless to state that a reasonable opportunity of being heard is to be provided to the assessee before the passing of the order. The assessee is also directed to ensure full and proper participation in the proceedings before the AO as failing which it is made clear the AO would be at liberty to pass an order on the basis of material available on record.

5.

Since the prayer of the parties and the material available on record in the respective orders remains identical, accordingly ITA No. 376/Chd/2018 to ITA No. 380/Chd/2018 are also restored to the file of the AO with identical directions. Said order was pronounced at the time of hearing itself in the presence of the parties.

6.

In the result, the appeals of the Assessee are allowed for statistical purposes.

Sd/- (DIVA SINGH) JUDICIAL MEMBER Dated : 26/06/2018 DNS/ AG Copy to: The Appellant, The Respondent, The CIT, The CIT(A), The DR

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