The Commissioner Of Income Tax(International Taxation & Transferpricing), Kolkata v. Joy Partnership Mining Centre

OD-7 ITAT/71/2018IA No.GA/1/2018 (Old No.GA/692/2018)IN THE HIGH COURT AT CALCUTTACivil Appellate JurisdictionORIGINAL SIDE THE COMMISSIONER OF INCOME TAX(INTERNATIONAL TAXATION & TRANSFERPRICING), 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 : 15[th] November, 2021. The Court : This appeal of revenue filed under Section260A of the Income Tax Act (the ‘Act’ in brevity) is directedagainst the order dated 17[th] October, 2017 passed by the Income TaxAppellate Tribunal, C-Bench, Kolkata (the ‘Tribunal’) in ITANo.149/Kol/2009 for the assessment year 2005-06. The revenue has raised the following substantialquestions of law for consideration : “(i) Whether on the facts and circumstances of the casethe learned Income Tax Appellate Tribunal has erred in law in notsustaining the order passed by the Assessing Officer who found thecreditors to be fictitious as there was no evidence produced bythe assessee in spite of demand made by the Assessing Officer ?(ii) Whether on the facts and circumstances of the casethe learned Income Tax Appellate Tribunal has erred in law inupholding the decision of the Commissioner of Income Tax (Appeals)who had admitted additional evidence without giving opportunity tothe assessing officer to consider the additional evidence and thesame is in violation of the Rule 46A(1) of the Income Tax Rules,1962 ?”We have elaborately heard the learned Counsel for theparties and carefully perused the materials placed on record. Thefirst of the two substantial questions of law urged before us bythe leaned senior standing Counsel for the revenue is with regardto lack of opportunity to the assessing officer to record theadditional evidence admitted by the CIT(A), placed before it bythe assessee. The other substantial question of law is a mixedquestion of fact and law and what is required to be examinedwhether there were enough evidence to show that the creditors weregenuine.When the appeal came up for consideration before theHon’ble Division Bench on 13[th] July, 2021, the Hon’ble Division Bench noted that the tribunal while dismissing the revenue’sappeal had taken note of two communications which were letterssubmitted by the assessee dated 24[th] December, 2008 and 29[th]December, 2008 explaining the movement of the creditors as well asthe details connected therewith. The Hon’ble Bench directed theassessee to file an additional paper book to indicate as towhether the two communications referred above were part of thepaper books submitted before the tribunal. In terms of thedirections issued by the Hon’ble Division Bench, a copy of thepaper book filed before the tribunal has been placed before us andwe find that those two letters referred by the tribunal form partof the paper books. The larger question which would requireconsideration is whether the assessing officer had adequateopportunity to examine the additional materials placed by theassessee admittedly produced for the first time before the CIT(A)and subsequently before the tribunal. In terms of Rule 46A, thereis a procedure prescribed for accepting additional evidence. Sub-rule (1) of Rule 46A says that the appellant shall not be entitledto produce before the Commissioner of Appeals any evidence whetheroral or documentary other than the evidence produced before himduring the course of the proceedings before the assessing officerexcept in the circumstances set out in Clauses (a) to (d) underSub-rule (1). The assessment was completed under Section 143(3)of the Act by order dated 27[th] December, 2007. Admittedly, the order of assessment being much prior to the letters dated 24[th]December, 2008 and 29[th] December, 2008 the same could not have beenconsidered by the assessing officer. It is not in dispute thatthese letters were placed before the CIT(A) for the first time.From the observations made in the order passed by the CIT(A) moreparticularly, in page 14 of the order of the CIT(A), there appearsto be an indication that the assessing officer participated in thehearing held by the CIT(A). However, there is no positive findingrecorded by the CIT(A) that the assessee was granted liberty toproduce 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 ofthe additional documents and has made an observation that thedepartment’s representative in his written submission has made areference to the date-wise order sheet entries which are containedin the additional documents. However, what is required to be seenis whether these documents could have been produced before theCIT(A) for the first time without recording the finding that theassessee was prevented by sufficient cause from producing theevidence which he was called upon to produce before the assessingofficer or producing any evidence which is relevant to any groundsof appeal or to adduce evidence relevant to any grounds of appeal.Thus, we find that the assessing officer did not have adequateopportunity to examine the additional documents. It is submitted by the learned counsel for therespondent/assessee that the term “fictitious” as used by theassessing officer is a misnomer as it gives an impression as ifthe creditors are non-existent persons when factually the matteris otherwise. In any event, we do not wish to record any findingon facts as we are satisfied that the matter needs to be re-examined by the CIT(A) by providing adequate opportunity to theassessing officer to examine the additional documents placedbefore the CIT(A) and make his submission and thereafter theCIT(A) to pass fresh orders.In the result, the appeal is allowed and the orderspassed by the tribunal as well as the CIT(A) are set aside on theaforementioned technical ground and the matter is remanded to theCIT(A) for fresh consideration. The CIT(A) is directed to issuenotice to the assessee as well as the assessing officer andprovide adequate opportunity to the assessing officer to file areport on the additional documents placed by the assessee andafter affording sufficient opportunity, pass fresh orders onmerits in accordance with law. Consequently, the substantialquestions of law are left open.We make it clear that the orders passed by the CIT(A) andthe tribunal have been set aside only on the issue which issubject-matter of the present appeal and this judgment will nothave any impact on other issues which are not on appeal. The connected application being GA/692/2018 accordinglystands closed. (T.S. SIVAGNANAM, J.) (HIRANMAY BHATTACHARYYA, J.) A/s./pa