TaxTMI 
TaxTMI 
2023 (9) TMI 976
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....utatis mutandis to the other appeal in ITA No. 255/Kol/2022. The grounds raised by the assessee in ITA No. 254/Kol/2022 are reproduced as under: 1. For that in the facts and circumstance the Learned Commissioner of Income Tax Appeals erred in upholding the addition of Rs. 9,72,000 on account of bogus claim of exempt Income in the form of Long Term Capital Gains on sale of listed equity shares. The addition is not called for and hence the same be deleted. 2. For that in the facts and circumstance the Learned Commissioner of Income Tax Appeals erred in not allowing the exemption u/s 10(38) of the IT Act 1961. The exemption be allowed as per law. 3. For that in the facts and circumstance the Learned Commissioner of Income Tax Appeals erred in adding Rs. 24,300 as unexplained expenditure u/s. 69C of the Income Tax Act, 1961 on account of commission expenditure to arrange the above said transaction. The addition is not called for and hence the same be deleted. 4. For that the facts and circumstances of the case the notice u/s 148 of the IT Act 1961 was without jurisdiction and bad in law and hence the entire assessment order is bad in law and the same....
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....firming the assessment order. The assessment order was bad in law and should be quashed. 14. For that the facts and circumstances of the case the notice u/s 143(2) of the IT Act 1961 was without jurisdiction and bad in law and hence the entire assessment order is bad in law and the same should be quashed. 15. For that in the facts and circumstances of the case the assessee was not provided with proper opportunity of hearing before the Ld CIT Appeals and hence the order passed by the Ld CIT Appeals is bad in law and hence the same be reversed. 16. For that in the facts and circumstances of the case the appellate order passed was in violation of principals of natural justice hence is bad in law and be quashed. 17. For that the interest computed u/s 234 A/B/C of the IT Act 1961 is over charged and wrongly calculated and or is not applicable to the assessee case hence the interest be deleted and or correctly computed. 18. The appellant craves leave to produce additional evidences in terms of Rule 29 of the Income Tax (Appellate Tribunal) Rules 1963. 19. The appellant craves leave to press new, additional grounds of appeal or modify,....
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....Directorate of Investigation, Kolkata on 30.03.2015 and 14.02.2017. Negating the submissions made by the assessee, ld. AO completed the assessment by making an addition of Rs. 9,72,000/- in respect of entire sale proceeds of the share transaction as unexplained cash credit u/s. 68 of the Act. Aggrieved, assessee went in appeal before the Ld. CIT(A). Before the Ld. CIT(A), inter alia, assessee took a specific ground vide ground 2(c) in respect of non-compliance of sec. 142(3) of the Act. The said ground is reproduced as under: "That substantial part of material collected by Ld. AO behind the back of the assessee has been relied on by him in violation of section 142(3) and principle of natural justice." 4.2. Before the Ld. CIT(A), assessee contended that despite specific request, Ld. AO had not shared the material on which reliance has been placed by him. Opportunity to cross examine the so called entry operator was not provided. Assessee had also challenged the reopening of case u/s. 147 of the Act by contending that reasons recorded are based on borrowed satisfaction. According to the assessee, crucial link between the material and the formation of belief is missing and....
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....ilure of which may initiate the assessment itself (the said decision was authored by the undersigned Accountant Member). 6. Per contra, Ld. Sr. DR submitted that the reasons to believe recorded by Ld. AO are elaborate, containing all the details in respect of share transaction done in the year by the assessee and the information and details in respect thereof adequately demonstrate the link between the material on record and the belief arrived at by the Ld. AO in initiating the proceedings u/s. 147 of the Act. He also referred to the approval granted by the Ld. Pr. CIT-12, Kolkata on his very specific note about his satisfaction. And the approval granted does not in any way reflect mechanical approach. On the alternate plea taken by the Ld. Counsel in respect of non-compliance of sec. 142(3) of the Act, Ld. Sr. DR did not raise any objection. 7. We have heard the rival contentions and have perused the material available on record. On the legal issue raised by the assessee challenging the legality of the reassessment carried out u/s. 147 read with sec. 148 of the Act, from the approval granted on his note that "satisfied with the reasons" we find that it is sufficient to indic....
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....3) The assessee shall, except where the assessment is made under section 144, be given an opportunity of being heard in respect of any material gathered on the basis of any inquiry under sub- section (2) or any audit under sub- section (2A) and proposed to be utilised for the purpose of the assessment. [emphasis supplied by us by bold and underline] 7.3. From the above and in the present context, we note that section 142(2) empowers the AO to make such enquiry as he considers necessary. The discretion is on the AO under the said section. However, having conducted such enquiry as provided in Sec. 142(2), then it is incumbent upon the AO u/s. 142(3) to give an opportunity of being heard in respect of any material gathered on the basis of any enquiry done u/s. 142(2) and proposed to be utilised for the purpose of the assessment. It is important to note that Sec. 142(3) uses the word "shall" which makes it mandatory requirement on the part of the AO to comply with it. We also take note of the provisions of Sec. 143(3) wherein the assessment is to be completed by the AO which also provides in sub-section (3) that AO shall make an assessment by an order in writing, inter alia....
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.... individual interest but also in public interest." (emphasis supplied by us by underline).Hon'ble Court took note of the exception to audialterem partem rule by taking into account the mandatory provision of law. In the same para, Hon'ble Court referred to the decision in State of Uttar Pradesh Vs. Sudhir Kr. Singh (2020) SCC Online SC 847, wherein it was held that the "prejudice exception" must be more than a mere apprehension or even a reasonable suspicion of a litigant, which should exist as a "matter of fact", or to be cast upon a definite inference and likelihood of prejudice flowing from the non-observance of natural justice. Thus, in the context of the present case, our view as stated herein is confined to the non-supply of material gathered by the ld. AO from the enquiries conducted by him in the course of assessment and utilised for the purpose of assessment without complying with the mandatory statutory procedural requirement stated in section 142(3). 8.3. In the present case before us, from the perusal of the impugned assessment order, as a matter of fact, it is noted that Ld. AO has conducted enquiry from CSE by issuing notice u/s. 133(6) and has also issued summon u....