9911796707
TMI Blog2022 (10) TMI 1118X X X X Extracts X X X X X X X X Extracts X X X X ..... amed in blatant disregard to the principles of natural justice, and pasting the same onto the impugned assessment order. Upon a comparison of assessment orders dated 31.03.2014 and 20.12.2019, I find substantial and near total identity in the reasoning adduced for the additions. No doubt there are two instances where the officer reduces the quantum of the addition, one on account of interest. However that would not, in any way, justify or excuse the mere reiteration of an assessment that has been set aside. The officer does have the liberty to adopt the same view as earlier taken, however, following the proper procedure in regard to the framing of a denovo assessment. In the present case, the facts, as set out above leave in no doubt that there was no intention of the officer to afford a fair or a denovo hearing, which, in my view, borders on contempt. The framing of an assessment has to be in line with the procedures that have been set out in the Manual of office procedure - Volume-II issued by the Directorate of Income Tax. We refer to the Manual only to drive home the point that the proper procedure for framing of assessment is not just one evolved by the Courts, but one codifie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... been received in AY 2011-12 and utilized for repayment of the loans must be looked into by the Assessing Officer in order to determine the veracity of the additions under Section 68 for AY 2009-10 2010-11 as well. Annulment of the order of assessment for AY 2011-12 has been effected only for the reasons as above, and does not, by any stretch of the imagination, lead to the acceptance of the petitioner s claims and arguments on merits and I categorically clarify so. Direction to the assessee to pay 10% of the disputed amount requires no interference and hence confirm the same. X X X X Extracts X X X X X X X X Extracts X X X X ..... vely. 7. The orders travelled in appeal before the Commissioner of Income Tax (Appeals) and had been set aside by the Income Tax Appellate Tribunal. They have been redone on 31.12.2017 and the order has been placed at pages 87 to 237 and 238 to 287 of compilation dated 28.03.2019 accompanying the affidavit. Since the petitioner has availed the remedy of statutory appeals and first appeals are pending before the Commissioner of Income Tax Appeals/(R1), I consciously desist from referring to any of the issues on merits,except to the extent as relevant to decide the lis that arises in these matters before me. 8. Separately, the matter had been inquired into by the Central Bureau of Investigation, New Delhi(in short 'CBI'). Though the petitioner, had been acquitted, the Hon'ble Supreme Court in the case of Centre for Public Interest Litigation and Ors. Vs. Union of India and Ors.[(2012) 3 SCC 1], had directed all agencies to investigate the matter separately, independently and without being prejudiced by the judgment of the Hon'ble Supreme Court or by any other agency, based upon the specific provisions of the respective enactments that they were concerned with i.e., ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Id. Assessing Officer shall also be at liberty to call for any documents, which he feels is necessary for the completion of the assessment. 7.In the result, the appeal of the assessee as well as the appeal of the Revenue is partly allowed for substantial purposes and M.P. filed by Revenue stands dismissed." 12.The conclusion as above, is preceded by the Tribunal recording the statement of the learned Standing Counsel for the Income Tax Department to the effect that even the Assessing Officer had not had proper opportunity to examine the genuineness of the claim of the advertising revenue. He had hence supported the request of the assessee for a remand. Para 5 wherein the statement of the Departmental Representative is recorded is extracted below:- "The Id. Standing Counsel submitted that the Id. Assessing Officer has also not had an opportunity to examine the genuineness of the claim of advertisement revenues. It was a submission that he had no objection, if the assessment was re-done de novo. It was a submission that however as the First Appellate Authority upheld the assessment order, the same was liable to be upheld by the Tribunal also." 13.In brief, the issue arising ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces without giving assessee an opportunity of rebuttal. Ld. A.R. further drew our attention to para 5.6.2 to submit that various deposition has been made and collected, which has not been given to the assessee for its cross-examination or rebuattal. It was a submission that the assessment has been completed without considering any of the submissions of the assessee but by taking into consideration the evidences, which have been collected behind the back of the assessee and used in the assessment without giving assessee an opportunity of cross-examination or rebuttal of the same. It was a submission that he had no objection, if the issues were restored to the file of the AO for re-adjudication." 15.Neither of the parties have challenged the findings in order dated 09.01.2019 and thus the findings of the Tribunal, the final fact finding authority, have become conclusive. The Tribunal categorically finds that the evidences collected by the Assessing Authority have not been put to the petitioner for rebuttal, no examination was carried out in regard to the advertisement revenues claimed to have been received by the assessee and the assessment had been framed entirely on presumptions ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 8.08.2019 refers to an order of the ITAT D Bench 'Hyderabad' whereas the matter falls within the jurisdiction of, and has been remanded by the ITAT, Chennai. Though it may appear trivial, seen in isolation, this mistake assumes relevance seen in the larger context relating to the tardiness in finalization of proceedings. 21. On 20.09.2019 the petitioner asks that the documents proposed to be used as against it, be supplied to it, as ordered by the Tribunal. The Standing Counsel has circulated the docket sheet of assessment proceedings before the Assessing Officer in a compilation dated 10.01.2021. Notings dated 28.08.2019 & 10.09.2019 read as follows:- 28/08/2019 - Notice under Section 142 (I) was issued. 10/09/2019 - Sri.G.Rajendran, VP (Finance) appeared and was asked to furnish the details of appropriations of advance amount AY wise and Client wise and to adduce all evidences in support of their claims. Case discussed and adjourned to 20/09/2019 as requested. 22. The request of the petitioner for documents relied-upon, as well as the direction of the Tribunal had thus been completely ignored. Let us bear in mind that the first hearing fixed is on 10.09.2019 whereas the o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng on 01.10.2019 or that the documents directed to be supplied by the Tribunal were, in fact, kept ready on 01.10.2019. At para 4 of the impugned order, the Assessing Authority sequentially narrates the opportunities of hearing that were afforded to the petitioner and, conspicuous by its absence, is any reference to the hearing allegedly fixed on 01.10.2019. 27.Thus this Court comes to the categoric conclusion that there was no hearing that had transpired on 01.10.2019. Though the noting on the docket sheet on 20.09.2019 states that the matter was adjourned to 01.10.2019, neither the petitioner nor the Assessing Authority appear to have ascribed any importance to this date. The averment of the respondent that documents were kept ready on 01.10.2019 do not find support from any record/communication and is thus dismissed as being an incorrect, self-serving statement. 28.The impugned order of assessment refers to a hearing on 16.12.2019.Learned Senior Standing Counsel has also placed on record show cause notice dated 04.12.2019 that has been sent to the e-mail ID of the auditor, [email protected] petitioner has an filed additional affidavit dated 27.01.2021 stating cat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... uld be impossible to achieve. 33. In the present case, neither the impugned order nor any of the records produced reveal the slightest intention of the officer to comply with the direction of the Tribunal. It is only in the counter filed in 2021 that he states that the documents were kept ready by 01.10.2019 which fact does not flow from anywhere in the records. I have already expressed my view that the aforesaid statement in counter is liable to be eschewed/ignored and as a consequence thereof, I am of the categoric view that the assessing authority is seen to be in fragrant violation of the direction of the Tribunal in regard to the furnishing of documents. 34. Liberty has been granted to the authority to call for additional particulars which liberty he exercises, calling for some particulars in August 2019, though without furnishing any of the particulars sought for by the assessee. The information called for are (i) details of appropriations of advance amount AY wise and Client wise and (ii) all evidences in support of their claims. The assessment, to be noted, is in remand, and the call for evidences appears to be rather mechanical and nonspecific which is surprising seen in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... set-aside the assessment order and restored the issue to the file of the assessing officer for re-adjudication de novo. 4. Accordingly, opportunity of being heard was afforded to the assessee on 10.09.2019, 20.09.2019 and finally on 16.12.2019 . Sri G. Rajendran , V.P ( Finance ) and Sri Shiva Subramanian , CA and AR of the assessee appeared and furnished necessary clarifications . After having discussions with Sri G.Rajendran and Sri Shiva Subramanlan , AR of the assessee , the assessment is finalized as under: 5. M/s Kalaignar TV Pvt Ltd ( KTPL ) received amounts of Rs.200 Crores in various tranches between December 2008 and August 2009 from M / s Cineyug Media Entertainment Pvt Ltd ( CMER ) and claimed that it accounted the above amounts as loan in its books of account . M / s KTPL started repaying Rs.200 Cr along with interest of Rs 30.31 Cr ( Rs. 230.31 Cr in totál ) between 20.12.2010 and 03.02.2011 .For this purpose, M/s KTPL claimed to have taken loans and advertisement advances during the previous year relevant to AY 2011-2012. While the issue of receipt of Rs.200 Crores by the assessee company was duly dealt with in A.Ys 2009-10 & 2010-11, during the AY 2011 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... L for purposes other than that for which it was ostensibly spent and the belated deduction and remittance of TDS is only an afterthought. 10. The payment was made in one lump sum from a cash credit account. 11. The contract document contains many clauses regarding the duration and time of the advertisements. But these appear to have been observed more in breach. 6.2. On appeal filed by the assessee against the original assessment order passed on 31.03.2014 , the CIT (A) considered elaborate written submissions filed on 23.11.2017 and called for a remand report from the assessing officer and forwarded the above remand report dtd 13.02.2018 to the assessee for its rejoinder . The assessee filed a rejoinder on 28.02.2018, filed additional grounds of appeal and also adduced additional evidence including a copy of the decision of Hon'ble CBI Special Court acquitting the assessee from CBI's case and ED's case . After careful consideration of the above , the CIT (A) upheld the addition made by the assessing officer in respect of amount received from M/s India Cements Ltd for the following reasons : (i). Neither M/s India Cements Ltd nor the assessee had such arrang ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n genuine and not for the purposes of business. 8. Advertisement advance received from M/s Gemini Industries & Imaging Ltd. 37. The other proposed additions, similar to the addition made in the case of India Cements, are confirmed for the following reasons: . . . . (i). Neither M/s. GIIL nor the assessee had such arrangement in the form of advertisement advance in the past or in the future. (ii). The AO has brought out the anomalies in the agreements for receiving advance towards future advertisements in the assessment order. (iv). The AO has also brought out the discrepancies in terms of telecast of advertisement to prove the point that the money received was not really for advertisement. (v). For the reasons mentioned by the AO in the assessment order , the money received under the head " advertisement advance " is nothing but a colorable device which are to be treated as non genuine and unexplained. 8.5 During the course of appeal proceedings before CIT ( A ), the assessee pointed out the arithmetical mistake in the addition made in the assessment order to the effect that an amount of Rs.14,45,50,000/- only was received by the assessee during the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e AO has brought out the flow of fund from questionable sources in which the enquiries conducted by the central government agencies have clearly brought out that they were shell companies and the transactions were sham. 2. The transaction, the assessee company had with M/s AFPL is a sham transaction and the source of fund cannot be accepted as explained 3. The assessee's claim that the CBI Special Court has acquitted all the accused in 2G Spectrum Scam, is not acceptable for the reason that it Involved a criminal proceeding which is under different legal provisions whereas the transactions here , have not passed the test of genuineness under the I.T. Act so as to qualify as satisfactorily explained source of fund . It is pertinent to mention here that the Govt. Of India has not accepted the judgment of the CBI Special Court and has appealed against the same. 4. Payment through banking channel is not sufficient to discharge the onus cast upon the assessee u/s 68 of the Act. 5. In the case of Mc Dowell & Co Ltd ( 1985 ) 154 ITR 148 ( SC ) , the apex court has held that when there are colorable devices by resorting to dubious methods, corporate veil can be lifted to check ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t of income.' 38. All additions have merely been re-confirmed in an automated fashion, simply copying the reasons adduced in the original order of assessment dated 31.03.2014 that has expressly been set aside by the Income Tax Appellate Tribunal as having been framed in blatant disregard to the principles of natural justice, and pasting the same onto the impugned assessment order. Upon a comparison of assessment orders dated 31.03.2014 and 20.12.2019, I find substantial and near total identity in the reasoning adduced for the additions. 39. No doubt there are two instances where the officer reduces the quantum of the addition, one on account of interest. However that would not, in any way, justify or excuse the mere reiteration of an assessment that has been set aside. The officer does have the liberty to adopt the same view as earlier taken, however, following the proper procedure in regard to the framing of a denovo assessment. 40. In the present case, the facts, as set out above leave me in no doubt that there was no intention of the officer to afford a fair or a denovo hearing, which, in my view, borders on contempt. The framing of an assessment has to be in line with the p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... an certainly examine, analyse and take into account subsequent events including the claim of the petitioner relating to repayment of the loans. 46. The transaction must be looked at in entirety including events that have transpired in the subsequent years. That is to say that the proper facts in regard to whether the advertisement advances had indeed been received in AY 2011-12 and utilized for repayment of the loans must be looked into by the Assessing Officer in order to determine the veracity of the additions under Section 68 for AY 2009-10 & 2010-11 as well. Annulment of the order of assessment for AY 2011-12 has been effected only for the reasons as above, and does not, by any stretch of the imagination, lead to the acceptance of the petitioner's claims and arguments on merits and I categorically clarify so. 47.As far as the challenge in W.P.No.9801 of 2019 to the order in stay petition for AY 2009-10 & 2010-11 is concerned, I find that the direction to the assessee to pay 10% of the disputed amount requires no interference and hence I confirm the same. As a consequence of the order passed in W.P.No.1451 of 2020, if the petitioner is entitled to any refund, the same shall be ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
