What construes as a violation of the principles of natural justice under the Income Tax Act?

This Income Tax Appellate Tribunal case involves an assessee company that received shares at a premium. The Assessing Officer made an addition under Section 68 of the Act due to the assessee's non-appearance and the failure of share subscriber companies' directors to attend summons. The Commissioner of Income Tax (Appeals) also passed an ex-parte order. The assessee argued that notices were sent to a wrong address, preventing their appearance. The Tribunal considered restoring the case to the Assessing Officer for fresh adjudication, provided the assessee cooperates fully.

IN THE INCOME TAX APPELLATE TRIBUNAL
 KOLKATA ‘C’ BENCH, KOLKATA

 (Before Sri J. Sudhakar Reddy, Hon’ble Accountant Member & Sri Aby T. Varkey, Hon’ble Judicial Member)

 ITA No. 2525/Kol/2018
 Assessment Year: 2012-13

M/s. Ganraj Vinimay (P) Ltd...............Appellant
26, P.K. Tagore Street
Bal Sadan
Kolkata – 700 007
[PAN : AAECG 5216 F]

Vs.

Income Tax Officer, Ward- 9(2), Kolkata..................…......Respondent

Appearances by:Shri Miraj D. Shah, A/R, appeared on behalf of the assessee.
Smt. Ranu Biswas, Addl. CIT, D/R, appearing on behalf of the Revenue.

Date of concluding the hearing : April 6th, 2021
Date of pronouncing the order : April 21st, 2021

ORDER

Per J. Sudhakar Reddy, AM :-

This appeal filed by the assessee is directed against the order of the Learned Commissioner of Income Tax (Appeals) - 3, (hereinafter the “ld. CIT(A)”), passed u/s. 250 of the Income Tax Act, 1961 (the ‘Act’), dt. 07/09/2018, for the Assessment Year 2012-13.

2. The assessee is a company and had filed its return of income on 28/09/2012, disclosing loss of Rs. 31,431/-. The company had issued shares at a premium during the year. The Assessing Officer selected the case for scrutiny and issued notices u/s 143(2) and 142(1) of the Act. The assessee did not appear. Summons u/s 131 of the Act were issued to the directors of the share subscriber companies for personal attendance on 24/02/2015. None appeared. The Assessing Officer drew adverse inference and made an addition u/s 68 of the Act of the share capital and share premium received by the assessee during the year. On appeal, the ld. CIT(A) passed an ex-parte order. 

3. Aggrieved the assessee is in appeal before us.

4. The ld. Counsel for the assessee submitted that, the notice of hearing sent by the ld. CIT(A) was on a wrong address and consequently, the assessee did not receive the notice and thus, none appeared before the ld. CIT(A) and the ld. CIT(A) passed an ex-parte order. He further pointed out that the Assessing Officer also passed an ex-parte order and has not afforded proper opportunity to the assessee and share subscriber companies, as the summons u/s 131 of the Act, were assessee undertakes to produce the directors of the subscriber companies before the Assessing Officer and also to file all necessary evidence as required by the Assessing Officer, if the matter is restored back to the file of the Assessing Officer for fresh adjudication, in accordance with law and has been done in certain case-law, which we would be considering during the course of our finding.

5. The ld. D/R, did not object to this request of the assessee that the matter be restored to the file of the Assessing Officer. He submitted that the Tribunal should make it clear that the assessee should co assessment.

6. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows:

To know more in details find the attachment file