2017 (1) TMI 516 - HC - Income Tax

Appeals under Section 260A - non grant of adequate or sufficient opportunity to support its claim that the amount received from its share applicants was in respect of genuine transactions - Held that - The CIT (A) s order clearly sets out specific details about the dates when opportunities were given to the assessee to substantiate its submissions. In fact on the fifth date (the previous dates being, 25.08.2014, preceded by a letter of 14.08.2014; 02.09.2014 and 09.09.2014), the CIT (A) clearly stated that final opportunity would be granted on the date fixed, i.e., 29.09.2014, failing which appeal would be decided on its merits. On the date given, i.e., 29.09.2014, neither did the appellant appear nor was any appearance on its behalf caused. Having regard to the above material, the additions were made and brought to tax; the ITAT concurred with this order. Having regard to the above factual material and also having considered the additional documents which are now part of the record, we are of the opinion that so far as the question of opportunity is concerned, there is no occasion for interference under Section 260A of the Act. The assessee clearly defaulted - if not at the original stage, but at the appellate stage and, therefore, cannot complain that its right to adduce additional evidence was not properly appreciated. No question of law arises

Summary

Issues:
Opportunity to support genuine transactions under Section 260A of the Income Tax Act, 1961.

Analysis:
The assessees raised a grievance that they were not granted adequate opportunity to prove that the amount received from share applicants was genuine. The Assessing Officer (AO) issued notices based on search and seizure proceedings, questioning the correctness of the amounts received as share capital. The assessees argued that they were not given sufficient time to provide supporting evidence. The AO concluded the proceedings quickly and relied on a letter received after issuing the notice, which the assessees claimed was not fair.

The assessees contended that the Commissioner (Appellate) and the ITAT did not consider the evidence produced in accordance with Rule 29 of the Income Tax Rules. They argued that the ITAT should have remitted the matter for appraisal of the fresh materials presented before the authority. However, the CIT (A) provided multiple opportunities to the assessees to substantiate their submissions, setting clear dates for compliance. On the final date given, the assessees did not appear or cause representation, leading to additions being made and confirmed by the ITAT.

The High Court reviewed the submissions and materials on record, noting that the assessees failed to take advantage of the opportunities provided both at the original and appellate stages. The Court found no grounds for interference under Section 260A of the Act regarding the question of opportunity. It concluded that the assessees defaulted in presenting evidence and therefore could not complain about the lack of proper appreciation of their right to adduce additional evidence. As no legal question arose, the appeals were dismissed.