Calcutta High Court
Pricing) vs Joy Partnership Mining Centre on 15 November, 2021
OD-7
ITAT/71/2018
IA No.GA/1/2018 (Old No.GA/692/2018)
IN THE HIGH COURT AT CALCUTTA
Civil Appellate Jurisdiction
ORIGINAL SIDE
THE COMMISSIONER OF INCOME TAX
(INTERNATIONAL TAXATION & TRANSFER
PRICING), KOLKATA
-Versus-
JOY PARTNERSHIP MINING CENTRE
Appearance:
Mr. Debasis Choudhury, Adv.
Mr. Madhu Jana, Adv.
...for the appellant.
Mr. J. P. Khaitan, Sr. Adv.
Ms. Nilanjana Banerjee Pal, Adv.
...for the respondent.
BEFORE:
The Hon'ble JUSTICE T.S. SIVAGNANAM
-And-
The Hon'ble JUSTICE HIRANMAY BHATTACHARYYA
Date : 15th November, 2021.
The Court : This appeal of revenue filed under Section
260A of the Income Tax Act (the 'Act' in brevity) is directed
against the order dated 17th October, 2017 passed by the Income Tax
Appellate Tribunal, C-Bench, Kolkata (the 'Tribunal') in ITA
No.149/Kol/2009 for the assessment year 2005-06.
The revenue has raised the following substantial
questions of law for consideration :
"(i) Whether on the facts and circumstances of the case
the learned Income Tax Appellate Tribunal has erred in law in not
sustaining the order passed by the Assessing Officer who found the
creditors to be fictitious as there was no evidence produced by
the assessee in spite of demand made by the Assessing Officer ?
(ii) Whether on the facts and circumstances of the case
the learned Income Tax Appellate Tribunal has erred in law in
upholding the decision of the Commissioner of Income Tax (Appeals)
who had admitted additional evidence without giving opportunity to
the assessing officer to consider the additional evidence and the
same is in violation of the Rule 46A(1) of the Income Tax Rules,
1962 ?"
We have elaborately heard the learned Counsel for the
parties and carefully perused the materials placed on record. The
first of the two substantial questions of law urged before us by
the leaned senior standing Counsel for the revenue is with regard
to lack of opportunity to the assessing officer to record the
additional evidence admitted by the CIT(A), placed before it by
the assessee. The other substantial question of law is a mixed
question of fact and law and what is required to be examined
whether there were enough evidence to show that the creditors were
genuine.
When the appeal came up for consideration before the
Hon'ble Division Bench on 13th July, 2021, the Hon'ble Division
Bench noted that the tribunal while dismissing the revenue's
appeal had taken note of two communications which were letters
submitted by the assessee dated 24th December, 2008 and 29th
December, 2008 explaining the movement of the creditors as well as
the details connected therewith. The Hon'ble Bench directed the
assessee to file an additional paper book to indicate as to
whether the two communications referred above were part of the
paper books submitted before the tribunal. In terms of the
directions issued by the Hon'ble Division Bench, a copy of the
paper book filed before the tribunal has been placed before us and
we find that those two letters referred by the tribunal form part
of the paper books. The larger question which would require
consideration is whether the assessing officer had adequate
opportunity to examine the additional materials placed by the
assessee admittedly produced for the first time before the CIT(A)
and subsequently before the tribunal. In terms of Rule 46A, there
is a procedure prescribed for accepting additional evidence. Sub-
rule (1) of Rule 46A says that the appellant shall not be entitled
to produce before the Commissioner of Appeals any evidence whether
oral or documentary other than the evidence produced before him
during the course of the proceedings before the assessing officer
except in the circumstances set out in Clauses (a) to (d) under
Sub-rule (1). The assessment was completed under Section 143(3)
of the Act by order dated 27th December, 2007. Admittedly, the
order of assessment being much prior to the letters dated 24th
December, 2008 and 29th December, 2008 the same could not have been
considered by the assessing officer. It is not in dispute that
these letters were placed before the CIT(A) for the first time.
From the observations made in the order passed by the CIT(A) more
particularly, in page 14 of the order of the CIT(A), there appears
to be an indication that the assessing officer participated in the
hearing held by the CIT(A). However, there is no positive finding
recorded by the CIT(A) that the assessee was granted liberty to
produce additional evidence for the first time before the CIT(A)
as the assessee's case fall within one of the clauses namely, (a)
to (d) under Rule 46(A)(1). The tribunal has also taken note of
the additional documents and has made an observation that the
department's representative in his written submission has made a
reference to the date-wise order sheet entries which are contained
in the additional documents. However, what is required to be seen
is whether these documents could have been produced before the
CIT(A) for the first time without recording the finding that the
assessee was prevented by sufficient cause from producing the
evidence which he was called upon to produce before the assessing
officer or producing any evidence which is relevant to any grounds
of appeal or to adduce evidence relevant to any grounds of appeal.
Thus, we find that the assessing officer did not have adequate
opportunity to examine the additional documents.
It is submitted by the learned counsel for the
respondent/assessee that the term "fictitious" as used by the
assessing officer is a misnomer as it gives an impression as if
the creditors are non-existent persons when factually the matter
is otherwise. In any event, we do not wish to record any finding
on facts as we are satisfied that the matter needs to be re-
examined by the CIT(A) by providing adequate opportunity to the
assessing officer to examine the additional documents placed
before the CIT(A) and make his submission and thereafter the
CIT(A) to pass fresh orders.
In the result, the appeal is allowed and the orders
passed by the tribunal as well as the CIT(A) are set aside on the
aforementioned technical ground and the matter is remanded to the
CIT(A) for fresh consideration. The CIT(A) is directed to issue
notice to the assessee as well as the assessing officer and
provide adequate opportunity to the assessing officer to file a
report on the additional documents placed by the assessee and
after affording sufficient opportunity, pass fresh orders on
merits in accordance with law. Consequently, the substantial
questions of law are left open.
We make it clear that the orders passed by the CIT(A) and
the tribunal have been set aside only on the issue which is
subject-matter of the present appeal and this judgment will not
have any impact on other issues which are not on appeal.
The connected application being GA/692/2018 accordingly
stands closed.
(T.S. SIVAGNANAM, J.)
(HIRANMAY BHATTACHARYYA, J.)
A/s./pa
