2021 (5) TMI 244 - AT - Income Tax

Addition u/s 68 - addition made under section 68 on account of share capital contribution by treating the same as unexplained cash credits - HELD THAT - The Kolkata Bench of the ITAT Shram Tie Up Pvt. Ltd. 2018 (3) TMI 1403 - ITAT KOLKATA has passed similar orders in many cases on the same issue of additions made u/s. 68 of share capital and has set aside the assessment to the file of the AO for fresh adjudication with a direction that Assessing Officer may examine the evidence already on record as well as other documentary evidences which the assessee may file before him and adjudicate the issue in accordance with law. The assessee is directed to cooperate and produce all the persons who may be summoned by the Assessing Officer for examination as and when called for by the Assessing Officer. Keeping in view the totality of the facts and circumstances of the case, the submissions of both sides and also the orders of the Co-ordinate Bench of the Tribunal in similar matters, we set aside this issue to the file of the AO for fresh adjudication in accordance with law - Appeal of the assessee is allowed for statistical purposes.

Summary

Issues: Violation of principles of natural justice, Adequate opportunity for representation, Addition u/s 68 of the Act

Violation of principles of natural justice:
The appeal was filed against the order of the Learned Commissioner of Income Tax (Appeals) for the Assessment Year 2012-13. The Assessing Officer selected the case for scrutiny and issued notices under relevant sections of the Income Tax Act. The assessee claimed that notices were not served, leading to a lack of proper opportunity. The Tribunal observed a violation of principles of natural justice as the Assessing Officer did not provide adequate opportunity to the assessee. The matter was restored to the file of the Assessing Officer for fresh adjudication, as seen in similar cases.

Adequate opportunity for representation:
The counsel for the assessee argued that the Assessing Officer did not give a reasonable opportunity to represent the case. The Tribunal noted that the assessee was not provided with a fair opportunity to present evidence before the Assessing Officer. Citing relevant case law, the Tribunal emphasized the importance of providing adequate opportunity for representation to the assessee. The matter was set aside for fresh adjudication, directing the assessee to cooperate with the lower authorities.

Addition u/s 68 of the Act:
The Assessing Officer made an addition under section 68 of the Act concerning share capital and share premium received by the assessee. The Tribunal found that the assessee did not receive proper opportunity to present evidence, leading to adverse inferences by the Assessing Officer. The Tribunal referred to previous judgments where similar issues were remanded back to the Assessing Officer for fresh assessment. The order of the Learned Commissioner was set aside, and the matter was remanded to the Assessing Officer for de novo assessment, emphasizing the need for a fair opportunity for the assessee to be heard.

In conclusion, the judgment highlighted the significance of adhering to principles of natural justice, providing adequate opportunity for representation, and ensuring a fair assessment process under the Income Tax Act. The Tribunal's decision to remand the matter back to the Assessing Officer for fresh adjudication aimed at upholding procedural fairness and allowing the assessee a proper chance to present their case.