Brotex Sales Pvt. Ltd., Kolkata V. CIT, KOLKATA-2, Kolkata

ITA 1030/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4708 (ITAT-KOLKATA)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 13-05-2016
• Court: TRIBUNAL
• Keywords: Revision of order; Period of limitation; Time period of passing order; Condonation of delay
• Section: 143(3); 142(1); 147; 68; 148; 263

Judgement Text

ITA NOS.1030,1031,1088 & 1090/KOL/2016 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHE S : D : KOLKATA BEFORE SHRI P.M.JAGTAP, AM & SHRI N.V. VASUDEVAN, J M ITA NO.1030/KOL/2016 ASSESSMENT YEAR:2011-12 BROTEX SALES PVT. LTD. 63, RADHA BAZAR STREET, KOLKATA- 700001. REP. BY NONE PAN : AAECB 1921 E VS. COMMISSIONER OF INCOME TAX, KOLKATA-2, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. REP. BY NONE ITA NO.1031/KOL/2016 ASSESSMENT YEAR:2011-12 DHANLABH TRADELINKS PVT.LTD. 63, RADHA BAZAR STREET, KOLKATA- 700001. REP. BY NONE PAN : AADCD 5263 C VS. COMMISSIONER OF INCOME TAX, KOLKATA-2, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. REP. BY NONE ITA NO.1088/KOL/2016 ASSESSMENT YEAR:2009-10 M/S. OLYMPUS SUPPLIERS PVT.LTD. 15/B, CLIVE ROW, KOLKATA-700001. REP. BY SHRI SUBASH AGARWAL, ADVOCATE PAN : AABCO 0624 Q VS. PR.COMMISSIONER OF INCOME TAX, KOLKATA-2, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. REP. BY NONE ITA NO.1090/KOL/2016 ASSESSMENT YEAR:2009-10 GANGOTRI FINANCIAL ADVISORY PVT.LTD. C/O ADVOCATE AMIT AGARWAL, 50D, MUKTARAM BABU STREET, KOLKATA- 700007. REP. BY NONE PAN : AADCG 3052 G VS. COMMISSIONER OF INCOME TAX, KOLKATA-1, KOLKATA AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. REP. BY NONE (APPELLANTS) (RESPONDENTS) DATE OF HEARING : 02.08.2016 DATE OF PRONOUNCEMENT : 05.08.2016. ITA NOS.1030,1031,1088 & 1090/KOL/2016 2 ORDER PER BENCH THROUGH THESE APPEALS, DIFFERENT ASSESSEES ASSAIL T HE CORRECTNESS OF SEPARATE ORDERS PASSED BY THE COMMISSIONERS OF INCOME-TAX (CIT) U/S 263 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATION TO THE CAPTIONED ASSESSMENT YEARS. SINCE ALL THESE APPEALS ARE BASED ON LARGELY SIMILAR FACTS AN D COMMON GROUNDS OF APPEAL, WE ARE PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. BEFORE TAKING UP THE DISPOSAL OF THE INSTAN T APPEALS ON MERITS, WE CONSIDER IT EXPEDIENT TO RECORD THAT WHEN THE APPEAL VIDE ITA N O.1090/KOL/2016 IN THE CASE OF GANGOTRI FINANCIAL ADVISORY PVT. LTD WAS CALLED UP FOR HEARING, NEITHER THERE WAS ANY ADJOURNMENT APPLICATION NOR ANY BODY PUT IN APPEARA NCE AT ALL. NONE APPEARED ON BEHALF OF THE DEPARTMENT. WHEN THE APPEALS VIDE ITA NOS.1 030/KOL/2016 AND 1031/KOL/2016 IN THE CASE OF BROTEX SALES PVT. LTD AND DHANLABH TRAD ELINKS PVT. LTD RESPECTIVELY WERE CALLED FOR HEARING, WE FIND THAT NOTICES WERE SERVE D AND ACKNOWLEDGEMENT COPIES ARE ON RECORD BUT NEITHER THERE WAS ANY ADJOURNMENT APPLIC ATION NOR ANY BODY PUT IN APPEARANCE AT ALL. NONE APPEARED ON BEHALF OF THE DEPARTMENT. IN THE CASE OF M/S. OLYMPUS SUPPLIERS PVT. LTD VIDE ITA NO.1088/KOL/2016 SHRI SUBASH AGAR WAL, ADVOCATE REPRESENTED ON BEHALF OF THE ASSESSEE BUT NONE APPEARED ON BEHALF OF THE DEPARTMENT. IN THIS APPEAL THERE IS A DELAY OF 19 DAYS IN FILING THE APPEAL BY THE A SSESSEE. THE IMPUGNED ORDER OF THE CIT U/S 263 OF THE ACT WAS PASSED ON 23.03.2015 (WRONGL Y REFERRED AS 29.03.2015 IN THE PROCEEDINGS BEFORE THE HONBLE CALCUTTA HIGH COURT) . THE SAME WAS NOT SERVED ON THE ASSESSEE. THE ASSESSEE CHALLENGED THE ORDER OF THE CIT DATED 23.03.2015 U/S 263 OF THE ACT BEFORE THE HONBLE CALCUTTA HIGH COURT IN WP NO .3116(W) OF 2016. THE HONBLE HIGH COURT BY ITS ORDER DATED 20.04.2016 OBSERVED T HAT IT SHALL BE TREATED THAT THE DATE OF RECEIPT OF THE ORDER U/S 263 OF THE ACT WAS ONLY 29 .02.2016 AND ON THAT BASIS THE ASSESSEE WAS GIVEN LIBERTY TO PURSUE THE REMEDIES AGAINST TH E ORDER DATED 23.03.2015. THE PRESENT APPEAL BY THE ASSESSEE HAS BEEN FILED ON 19.05.2016 . THE APPEAL AGAINST THE ORDER U/S 263 ITA NOS.1030,1031,1088 & 1090/KOL/2016 3 OF THE ACT ARE TO BE FILED WITHIN 60 DAYS FROM THE DATE OF RECEIPT OF THE ORDER DT. 28.04.2016. THE SAME WAS HOWEVER FILED ONLY ON 19.0 5.2016 RESULTING IN A DELAY OF 19 DAYS. THE DELAY HAS BEEN EXPLAINED IN AN APPLICATIO N FOR CONDONATION OF DELAY. IT HAS BEEN STATED THEREIN THAT THE HONBLE HIGH COURTS O RDER WAS COMMUNICATED TO THE ASSESSEE ONLY ON 06.05.2016 AND THE RELEVANT PAPERS WERE HANDED OVER TO THE ADVOCATE ON 10.05.2016. THE APPEAL WAS PREPARED BY THE ADVOCATE ON 17.05.2016 AND THEREAFTER FILED ON 18.05.2016 BEFORE THE TRIBUNAL. AFTER CONSIDERIN G THE REASONS EXPLAINED IN THE PETITION FOR CONDONATION OF DELAY WE ARE SATISFIED THAT THE DELAY IN FILING THIS APPEAL WAS DUE TO A REASONABLE AND SUFFICIENT CAUSE AND THE APPEAL IS A CCORDINGLY CONDONED. 3. WE ALSO FIND THAT THE ISSUES RAISED IN THESE AP PEALS ARE SQUARELY COVERED AGAINST THE ASSESSEE BY SEVERAL ORDERS PASSED BY THIS BENCH INC LUDING SUBHLAKSHMI VANIJYA PVT. LTD. VS. CIT (INFRA) . UNDER THESE CIRCUMSTANCES, WE ARE TAKING UP THES E APPEALS FOR DISPOSAL ON MERITS EX PARTE QUA THE ASSESSEE. 4. BRIEFLY STATED THE FACTS OF ALL THE CASES IN THIS BATCH ARE SIMILAR INASMUCH AS RETURNS WERE FILED BY SUCH COMPANIES WITH MEAGRE INCOME; I NTIMATIONS WERE ISSUED U/S 143(1); THEREAFTER NOTICES U/S 148 WERE ISSUED EITHER AT TH E INSTANCE OF SUCH COMPANIES DIVULGING A PALTRY ESCAPEMENT OF INCOME OR OTHERWISE ; ASSESSM ENT ORDERS WERE PASSED U/S 143(3) READ WITH SECTION 147 AFTER MAKING NOMINAL ADDITION S AND THE AOS, DURING THE COURSE OF SUCH ASSESSMENT PROCEEDINGS, MADE SOME FORMAL ENQUI RIES ABOUT SHARES ISSUED BY SUCH COMPANIES AT HUGE PREMIUM BY ISSUING NOTICES U/S 13 3(6) TO SOME OF THE SHAREHOLDERS AND GETTING SATISFIED WITHOUT ANY FURTHER INVESTIGATION . THE JURISDICTIONAL CITS HAVE PASSED ORDERS U/S 263 IN ALL SUCH CASES, WHICH HAVE BEEN A SSAILED BEFORE THE TRIBUNAL. 5. WE HAVE PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS RELEVANT TO MENTION THAT WE HAVE DISPOSED OF MORE THAN 500 CASES INVOLVING SAME ISSUE THROUGH CERTAIN ORDERS WITH THE MAIN ORDER HAVING BEEN PASSED IN A GROUP OF CAS ES LED BY SUBHLAKSHMI VANIJYA PVT. ITA NOS.1030,1031,1088 & 1090/KOL/2016 4 LTD. VS. CIT (ITA NO.1104/KOL/2014) DATED 30.7.2015 FOR THE A.Y. 2009-10. 6. WE FIND AS HAS ALSO BEEN ADMITTED BY THE LD. DR THAT FACTS AND CIRCUMSTANCES OF THE CASES UNDER CONSIDERATION ARE MUTATIS MUTANDIS SIMILAR TO THOSE DECIDED EARLIER. IN OUR AFORESAID ORDER IN SUBHLAKSHMI VANIJYA PVT. LTD., VS. CIT (ITA NO. 1104/KOL/2014 A.Y. 2009-10), WE HAVE DRAWN THE FOLLOWING CONCLUSIONS: - A. CONTENTION OF THE ASSESSEE THAT SINCE THE AO OF TH E ASSESSEE-COMPANY WAS NOT EMPOWERED TO EXAMINE OR MAKE ANY ADDITION ON ACCOUN T OF RECEIPT OF SHARE CAPITAL WITH OR WITHOUT PREMIUM BEFORE AMENDMENT TO SECTION 68 BY THE FINANCE ACT, 2012 W.E.F. A.Y. 2013-14 AND HENCE THE CIT BY MEANS OF IMPUGNED ORDER U/S 263 COULD NOT HAVE DIRECTED THE AO TO DO SO, IS UNSUSTA INABLE. B. FAILURE OF THE AO TO GIVE A LOGICAL CONCLUSION TO THE ENQUIRY CONDUCTED BY HIM GIVES POWER TO THE CIT TO REVISE SUCH ASSESSMENT OR DER, BY HOLDING THAT :- I) THE ENQUIRY CONDUCTED BY THE AO IN SUCH CASES CA NT BE CONSTRUED AS A PROPER ENQUIRY; II) CIT U/S 263 CAN SET ASIDE THE ASSESSMENT ORDER AND DIRECT THE AO TO CONDUCT A THOROUGH ENQUIRY, NOTWITHSTANDING THE JUR ISDICTION OF THE AO IN MAKING ENQUIRIES ON THE ISSUES OR MATTERS AS HE CON SIDERS FIT IN TERMS OF SECTION 142(1) AND 143(2) OF THE ACT, WHICH IS RELE VANT ONLY UP TO THE COMPLETION OF ASSESSMENT ; III) INADEQUATE INQUIRY CONDUCTED BY THE AO IN THE GIVEN CIRCUMSTANCES IS AS GOOD AS NO ENQUIRY AND AS SUCH, THE CIT WAS EMP OWERED TO REVISE THE ASSESSMENT ORDER ; IV) THE ORDER OF THE CIT IS NOT BASED ON IRRELEVANT CONSIDERATIONS AND FURTHER IN THE PRESENT CIRCUMSTANCES, HE WAS NOT OB LIGED TO POSITIVELY INDICATE THE DEFICIENCIES IN THE ASSESSMENT ORDER O N MERITS ON THE QUESTION OF ISSUE OF SHARE CAPITAL AT A HUGE PREMIUM ; AND V) THE AO IN THE GIVEN CIRCUMSTANCES CANT BE SAID TO HAVE TAKEN A POSSIBLE VIEW AS THE REVISION IS SOUGHT TO BE DONE ON THE PR EMISE THAT THE AO DID NOT MAKE ENQUIRY THEREBY RENDERING THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE REVENUE ON THAT SCORE ITSELF. C. IN THE GIVEN FACTS AND CIRCUMSTANCES OF ALL SUCH CASES, THE NOTICES U/S 263 WERE PROPERLY SERVED THROUGH AFFIXTURE OR OTHERWISE. FUR THER THE LAW DOES NOT REQUIRE THE SERVICE OF NOTICE U/S 263 STRICTLY AS PER THE T ERMS OF SECTION 282 OF THE ACT. THE ITA NOS.1030,1031,1088 & 1090/KOL/2016 5 ONLY REQUIREMENT ENSHRINED IN THE PROVISION IS TO G IVE AN OPPORTUNITY OF HEARING TO THE ASSESSEE, WHICH HAS BEEN COMPLIED WITH IN ALL S UCH CASES. D. LIMITATION PERIOD FOR PASSING ORDER IS TO BE COUNT ED FROM THE DATE OF PASSING THE ORDER U/S 147 READ WITH SEC. 143(3) AND NOT THE DAT E OF INTIMATION ISSUED U/S 143(1) OF THE ACT, WHICH IS NOT AN ORDER FOR THE PURPOSES OF SECTION 263. IN ALL THE CASES, THE ORDERS HAVE BEEN PASSED WITHIN THE TIME LIMIT. E. THE CIT HAVING JURISDICTION OVER THE AO WHO PASSED ORDER U/S 147 READ WITH SECTION 143(3), HAS THE TERRITORIAL JURISDICTION TO PASS THE ORDER U/S 263 ANDNOT OTHER CIT. F. ADDITION IN THE HANDS OF A COMPANY CAN BE MADE U/S 68 IN ITS FIRST YEAR OF INCORPORATION. G. AFTER AMALGAMATION, NO ORDER CAN BE PASSED U/S 263 IN THE NAME OF THE AMALGAMATING COMPANY. BUT, WHERE THE INTENTION OF T HE ASSESSEE IS TO DEFRAUD THE REVENUE BY EITHER FILING RETURNS, AFTER AMALGAMATIO N, IN THE OLD NAME OR OTHERWISE, THEN THE ORDER PASSED IN THE OLD NAME IS VALID. H. ORDER PASSED U/S 263 ON A NON-WORKING DAY DOES NOT BECOME INVALID, WHEN THE PROCEEDINGS INVOLVING THE PARTICIPATION OF THE ASSE SSEE WERE COMPLETED ON AN EARLIER WORKING DAY. I. ORDER U/S 263 CANNOT BE DECLARED AS A NULLITY FOR THE NOTICE HAVING NOT BEEN SIGNED BY THE CIT, WHEN OPPORTUNITY OF HEARING WAS OTHERWISE GIVEN BY THE CIT. J. REFUSAL BY THE REVENUE TO ACCEPT THE WRITTEN SUBMIS SIONS OF THE ASSESSEE SENT AFTER THE CONCLUSION OF HEARING CANNOT RENDER THE O RDER VOID AB INITIO . AT ANY RATE, IT IS AN IRREGULARITY. K. SEARCH PROCEEDINGS DO NOT DEBAR THE CIT FROM REVI SING ORDER U/S PASSED U/S 147 OF THE ACT. 7. IT IS NOTICED THAT ALL OR SOME OF THE ABOVE CO NCLUSIONS ARE APPLICABLE TO THE APPEALS IN THIS BATCH. IN VIEW OF THE FOREGOING DISCUSSION AND FOLLOWING THE VIEW TAKEN IN SUBHLAKSHMI VANIJYA PVT. LTD. (SUPRA) , WE UPHOLD ALL THE IMPUGNED ORDERS. ITA NOS.1030,1031,1088 & 1090/KOL/2016 6 8. IN THE RESULT, ALL THE APPEALS ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 05.08.20 16. SD/- SD/- [P.M.JAGTAP] ACCOUNTANT MEMBER [N.V.VASUDEVAN] JUDICIAL MEMBER DATED : 05.08.2016. RG.PS COPY FORWARDED TO: APPELLANT RESPONDENT CIT CIT (A) DR, ITAT AR, ITAT, KOLKATA .