2018 (6) TMI 698 - AT - Income Tax

Revision u/s 263 - no proper opportunity was given to the assessee to discharge the onus casted upon it as required in sec. 68 matters - no statutory notices were served upon - Held that - We note that other than notices u/s. 142(1) of the Act dated 29.10.2013 and 15.01.2014, the AO has not issued any statutory notices. AO acknowledges that Ld. AR of the assessee appeared before him on 03.03.2014 however the AO says his first notice dated 29.03.2013 was un-served, then the question is how the Ld AR of assessee appeared before the AO. So when the Ld. AR of the assessee appeared, AO should have called for proper explanation and conducted the investigation in a fair manner in the light of CIT order. Without doing that AO has suddenly come to a conclusion that assessee failed to prove the genuineness of the share capital. These facts per-se reveal non-application of mind In the light of the Hon ble Supreme Court s decision in Tin Box Company (2001 (2) TMI 13 - SUPREME COURT) and taking into consideration the fact the order of the Ld. CIT passed u/s. 263 of the Act in similar cases being upheld up to the level of Apex Court, and taking note of Hon ble Delhi High Court s order in Jansampark Advertising & Marketing Pvt. Ltd. (2015 (3) TMI 410 - DELHI HIGH COURT), we set aside the order of the Ld. CIT(A) and remand the matter back to the file of AO for de novo assessment and to decide the matter - Appeal of assessee is allowed for statistical purposes .

Summary

Issues:
1. Ex parte order passed by Ld. CIT(A) due to alleged non-appearance of the assessee during appellate proceedings.
2. Non-adherence to investigation guidelines by AO as per the order of Ld. CIT.
3. Allegation of lack of proper opportunity given to the assessee to discharge onus in sec. 68 matters during reassessment proceedings.

Issue 1:
The appeal was filed against the ex parte order of Ld. CIT(A) for AY 2008-09. The Ld. CIT(A) fixed hearing dates for the appeal, but the assessee allegedly did not appear. The assessee claimed to have filed adjournment applications promptly and disputed the Ld. CIT(A)'s conclusion that the assessee was not interested in pursuing the appeal. The Tribunal noted that the assessee had filed adjournment applications for most hearing dates, and the Ld. CIT(A) should have given the assessee an opportunity to present its case. The Tribunal found a violation of natural justice due to the lack of proper opportunity for the assessee.

Issue 2:
The AO was directed by the Ld. CIT to investigate the genuineness and source of share capital thoroughly. However, the AO's investigation did not comply with these guidelines. The AO made additions to the income based on discrepancies in the share capital and premium without proper verification. The assessee argued that no proper opportunity was given to prove the genuineness of the share capital. The Tribunal found that the AO did not follow the investigation guidelines, leading to a lack of opportunity for the assessee, as required by law.

Issue 3:
The main grievance of the assessee was the alleged lack of proper opportunity during reassessment proceedings in sec. 68 matters. The AO claimed that statutory notices were not served properly, leading to confusion about shareholder details. The AO made additions to the income due to the inability to ascertain the genuineness of the share capital. The Tribunal found that the AO did not provide a fair opportunity for the assessee to explain the discrepancies. Citing legal precedents, the Tribunal concluded that the assessment should be done afresh, emphasizing the importance of giving the assessee a reasonable opportunity to present their case.

In conclusion, the Tribunal allowed the appeal for statistical purposes, setting aside the Ld. CIT(A)'s order and remanding the matter back to the AO for a fresh assessment, emphasizing the need to follow proper investigation guidelines and provide the assessee with a fair opportunity to be heard in accordance with the law.