2020 (10) TMI 449 - AT - Income Tax

Ex-parte order - assessee submitted before us that the notice of hearing though issued the directors of those companies could not appear before the Revenue - Counsel undertakes to produce the directors of those companies before the Ld. AO and therefore prays for a direction for setting aside the issue to the file of the Ld. AO to re-adjudicate the issue - HELD THAT - As in the matter of Vriddhi Power Pvt. Ltd. vs ITO 2019 (8) TMI 1558 - ITAT KOLKATA in the identical situation the Coordinate Bench has been pleased to pass order directing the ld. A.O to adjudicate the matter afresh by providing a further opportunity of being heard to the assessee. Taking into consideration the entire aspect of the matter the undertaking given by the Ld. AR for producing the director of the investing companies before the Revenue and particularly upon considering the judgment relied upon respectfully relying upon the same find it fit and proper to restore the issue to the file of AO for deciding the same afresh upon giving an opportunity to the assessee to substantiate its case and also taking into consideration the presence of the ld. Directors of the companies and the evidence on record or any other evidence which the assessee may choose to file at the time of hearing of the matter and to pass order in accordance with law. - Appeal of the assessee allowed for statistical purposes.

Summary

Issues:
Assessment based on high premium shares issuance, Lack of appearance by directors of investing companies, Ex-parte order confirming addition, Request for re-adjudication by assessee, Compliance on part of share subscribers, Direction for setting aside issue, Rival submissions by parties, Previous judgments on similar issues, Restoration of issue to Assessing Officer, Opportunity for assessee to substantiate case, Cooperation with Revenue for proper adjudication.

Analysis:
The appeal concerned an assessment where the assessee company issued shares to various private limited companies at a high premium for the assessment year 2012-13. During the assessment proceedings, despite summons sent to the directors of the investing companies, none appeared, leading to the Assessing Officer finalizing the assessment with an addition of ?11,50,78,830. This addition was confirmed by the Commissioner of Income Tax (Appeals) through an ex-parte order.

During the appeal hearing, the assessee's counsel requested a re-adjudication of the issue by the Assessing Officer, citing the inability of the directors to appear before the Revenue and offering to produce them for the assessment. On the other hand, the Revenue's representative argued that the assessee failed to provide satisfactory compliance regarding the share subscribers, resulting in the ex-parte order confirming the addition.

The Appellate Tribunal considered the submissions of both parties and reviewed relevant materials, including previous judgments on similar issues. Referring to a specific case, the Tribunal noted that in a comparable situation, the Assessing Officer was directed to re-adjudicate the matter after providing the assessee with a further opportunity to be heard.

Consequently, the Tribunal decided to restore the issue to the Assessing Officer for a fresh decision. The assessee was granted an opportunity to substantiate its case, with a specific directive to consider the presence of the directors of the investing companies and any additional evidence the assessee might submit. The Tribunal emphasized the need for cooperation between the assessee and the Revenue for a proper adjudication, ultimately allowing the assessee's appeal for statistical purposes.

In conclusion, the Tribunal allowed the appeal, directing the restoration of the issue to the Assessing Officer for a fresh decision, ensuring the assessee's opportunity to present its case and cooperate with the Revenue for a proper resolution.