TaxTMI 
TaxTMI 
2019 (4) TMI 1423
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.... explain the above source of share capital in spite of a number of opportunities. 3. On appeal, the ld. First Appellate Authority in an ex parte order confirmed the order of the Assessing Officer. Further aggrieved, the assessee is in appeal before us. 4. After hearing rival contentions, we find that there is violation of principles of natural justice in this case. The jurisdiction of the assessee's case initially was with ITO, Ward-1(3) who had issued scrutiny notice. This was complied with. Thereafter, the file was transferred to ITO, Ward-9(4) on 30.01.2015 towards the end of limitation period for completing assessment. The assessee filed a letter before the ITO, Ward-1(3) informing change of address with the copy to ITO, Ward-9(4) and both Commissioner of Income Tax. However, ITO, Ward-9(4) issued notice on the old address and such notice was not served. No notice was issued on the new address, though the same was on the records of the Assessing Officer. Hence these in violation of principles of natural justice. Hence, we are of the opinion that the issue should be restored to the file of the Assessing Officer for fresh adjudication in accordance with law, after giving the a....
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....the order of ld AO is erroneous so far as prejudicial to the interest of the revenue and directed the ld AO to make fresh assessment after taking into consideration the pernicious practice of converting black money by the modus operandi as described by the ld CIT. We also note in the said backdrop, the ld CIT has given certain guidelines which were given in order to facilitate deep investigation into the case. The ld AO cannot remain quiet after issuing summons u/s 131 to the share subscriber companies. The same when went unanswered, the ld AO should have resorted to other actions available as per law, which was not done in the instant case. Without resorting to such further verification / investigation / action as per law, the ld AO ought not to have drawn any adverse inference against the assessee company. 5. At the cost of repetition, we would like to state that the ld CIT had specifically given the manner in which investigation and further enquiries are to be carried out by the ld AO to understand the genuineness of share capital raised by the assessee company in his order passed u/s 263 of the Act, wherein it is specifically mentioned that the enquires and investigation sh....
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....td in ITA No. 525/2014 dated 11.3.2015 wherein after noticing inadequate enquiry by authorities below, the court had held as under:- "41. We are inclined to agree with the CIT(Appeals), and consequently with ITAT, to the extent of their conclusion that the assessee herein had come up with some proof of identity of some of the entries in question. But, from this inference, or form the fact that the transactions were through banking channels, it does not necessarily following that satisfaction as to the creditworthiness of the parties or the genuineness of the transactions in question would also have been established. 42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT(Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the fact of the allegations of the Revenue that the account statements reveal uniform pattern of cash deposits of equal amounts in the r....
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....so we are, therefore, of the opinion that assessee did not get proper opportunity before the AO during reassessment proceedings. The Hon'ble (three judge bench) of the Hon'ble Supreme Court in Tin Box Company Vs. CIT (2001) 249 ITR 216 (SC) has held as under: "It is unnecessary to go into great detail in these matters for there is a statement in the order of the Tribunal, the fact-finding authority, that reads thus : "We will straightaway agree with the assessee's submission that the Income-tax Officer had not given to the assessee proper opportunity of being heard." That the assessee could have placed evidence before the first appellate authority or before the Tribunal is really of no consequence for it is the assessment order that counts. That order must be made after the assessee has been given a reasonable opportunity of setting out his case. We, therefore, do not agree with the Tribunal and the High Court that it was not necessary to set aside the order of assessment and remand the matter to the assessing authority for fresh assessment after giving to the assessee a proper opportunity of being heard. Two questions were placed before the High Court, of which the secon....
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....ed 11.03.2015 wherein after noticing inadequate enquiry by authorities below have held as under: "41. We are inclined to agree with the CIT(Appeals), and consequently with ITAT, to the extent of their conclusion that the assessee herein had come up with some proof of identity of some of the entries in question. But, from this inference, or form the fact that the transactions were through banking channels, it does not necessarily following that satisfaction as to the creditworthiness of the parties or the genuineness of the transactions in question would also have been established. 42. The AO here may have failed to discharge his obligation to conduct a proper inquiry to take the matter to logical conclusion. But CIT(Appeals), having noticed want of proper inquiry, could not have closed the chapter simply by allowing the appeal and deleting the additions made. It was also the obligation of the first appellate authority, as indeed of ITAT, to have ensured that effective inquiry was carried out, particularly in the fact of the allegations of the Revenue that the account statements reveal uniform pattern of cash deposits of equal amounts in the respective accounts preceding the tra....