KHATUDHAM SALES PRIVATE LIMITED, Gorakhpur V. PRINCIPLA COMMISSIONER OF INCOME TAX, Gorakhpur

ITA 105/ALLD/2017

• Counselvise Citation: [2017] 127 COUNSELVISE.COM (IT) 7882 (ITAT-ALLAHABAD)
• Duration Of Justice: 4 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-09-2017
• Appeal Filed By: Assessee
• Order Result: Dismissed
• Bench Allotted: DB
• Assessment Year: 2009-2010
• Appeal Filed On: 18-05-2017
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: RAJKUMAR LACHHIRAMANKA
• Assessee Lawyers: ASHISH BARNWAL
• Keywords: Opportunity of being heard; Principle of natural justice; Application of stay; Right to appeal
• Section: 147; 68; 148; 263

Judgement Text

1 ITA NOS. 105/106/ALLD/2017 IN THE INCOME TAX APPELLATE TRIBUNAL ALLAHABAD BENCH ALLAHABAD BEFORE SHRI R.K.PANDA, ACCOUNTANT MEMBER AND MS.SUCHITRA KAMBLE, JUDICIAL MEMBER ITA NO. 105 /ALLD/2017 A. Y: 2009-10 ITA NO. 106/ALLD/2017 A. Y: 2010-11 KHATUDHAM SALES PVT. LTD. 276 BALDEV PLAZA GOL GHAR, NEAR PWD OFFICE AGARWAL SADAN, GORAKHPUR AADCK1731C VS. PRINCIPAL COMMISSIONER OF INCOME TAX GORAKHPUR (APPELLANT) (RESPONDENT) S.A NO. 2/ALLD/2017 (A.Y 2009-10) S.A NO. 3/ALLD/2017 (A.Y 2010-11) KHATUDHAM SALES PVT. LTD. 276 BALDEV PLAZA GOL GHAR, NEAR PWD OFFICE AGARWAL SADAN, GORAKHPUR AADCK1731C VS. PRINCIPAL COMMISSIONER OF INCOME TAX GORAKHPUR (APPELLANT) (RESPONDENT) REVENUE BY SHRI RAJKUMAR LACHHIRAMANKA, CIT DR ASSESSEE(S) BY : SHRI ASHISH BARNWAL, ADV / DATE OF HEARING : 28/06/2017 /DATE OF PRONOUNCEMENT: 18/09/2017 2 ITA NOS. 105/106/ALLD/2017 ORDER PER BENCH: THESE APPEALS ALONG WITH STAY APPLICATION ARE PLACE D BEFORE US. THE APPEALS ARE FILED AGAINST THE ORDER DATED 29/3/2017 BY THE COMMISSIONER OF INCOME TAX, GORAKHPUR, U/S 263 OF THE INCOME-TAX AC T, 1961. 2. THE GROUNDS OF APPEAL ARE AS UNDER:- ITA NO. 105 /ALLD/2017 A. Y: (2009-10) 1. BECAUSE THE 'CIT' HAS GROSSLY ERRED IN LAW AND ON FACTS IN EXERCISING HIS REVISIONARY J URISDICTION UNDER SECTION 263, IN RELATION TO THE A SSESSMENT ORDER DATED 31.3.2015 CAPTIONED AS ORDER 'U/S 147/1 43(3)(II) OF THE I.T. ACT 1961, FOR THE ASSESSMENT YEAR 1919-10' AND IN DIREC TING THE ASSESSING OFFICER TO PASS FRESH ASSESSMENT ORDER AFTER MAKING ADDITION O F RS.16,00,000/- WHICH HAD BEEN RECEIVED BY THE ASSESSEE/ APPELLANT AS SHARE APPLICATION MONEY. 2. BECAUSE ON A DUE CONSIDERATION AND APPRECIATION OF MATERIAL AND INFORMATION THAT HAD BEEN PLACED ON RECORD FROM THE SIDE OF THE ASSESSEE/ APPELLANT AND LAW APPLICABLE THERETO BY WAY OF SHARE APPLICATION MONEY, PARTICULARLY THAT A) SHARE APPLICATION MONEY AGGREGATING RS.16,00,000/- HAD BEEN RECEIVED FROM THE TWO COMPANIES NAMELY (I) MOUNT VI EW DEALCOMM PVT. LTD., AND (II) KANHAIYA CEMENT PVT. LTD.; B) THE TWO COMPANIES WERE IDENTIFIABLE NOT ONLY BY THE IR INCOME-TAX PARTICULARS, BUT ALSO BY THE PARTICULARS AVAILABLE ON WEBSITE OF MINISTRY OF CORPORATE AFFAIRS AND REGISTRAR OF COMP ANIES; C) THE SAID APPLICANTS HAD SUBSCRIBED TO THE SHARE CAP ITAL OF THE COMPANY THROUGH FORMAL APPLICATION IN PRESCRIBED FO RM CONTAINING ALL THE RELEVANT DETAILS, EVEN WITH REGARD TO THE REMIT TANCES MADE BY THEM; D) THE SAID COMPANIES HAD BEEN MAINTAINING BANK ACCOUN T WITH AXIS BANK LTD. AND THE REMITTANCE RECEIVED THROUGH CHEQU ES/RTGS GOT DULY CLEARED FROM THEIR BANK ACCOUNTS; E) THE BANK ACCOUNT AS WELL AS INVESTMENT MADE BY THE SAID TWO SHARE APPLICANTS IN THE SHARES OF THE ASSESSEE/ APPELLANT WERE REFLECTED IN THEIR AUDITED STATEMENT OF ACCOUNTS AS HAD DULY BEEN PRODUCED BEFORE THE ASSESSING OFFICER; F) IN LIEU OF REMITTANCES MADE BY THE TWO SHARE APPLIC ANTS, SHARES HAD ACTUALLY BEEN ALLOTTED TO THEM FOR WHICH STATUTORY RETURN IN 'FORM NO.2' HAD BEEN FILED BY THE ASSESSEE/APPELLANT BEFO RE THE REGISTRAR OF COMPANIES; 3 ITA NOS. 105/106/ALLD/2017 G) NAMES OF THE TWO SUBSCRIBERS APPEARED IN THE SHA REHOLDERS' LIST SUBMITTED BY THE ASSESSEE/ APPELLANT AS PART OF 'ANNUAL RETURN' WITH REGISTRAR OF COMPANIES AND H) BEFORE COMPLETING ASSESSMENT, IN PURSUANCE OF NOTICE ISSUED UNDER SECTION 148, VIDE ORDER DATED 31.03.2015, THE DY. C IT HAD EXAMINED ALL THE ABOVE MENTIONED MATERIAL AND INFORMATION AN D PRINCIPLE OF LAW AS APPLICABLE TO MONIES RECEIVED BY WAY OF SHAR E CAPITAL THE ASSESSMENT ORDER DATED 31.03.2015 COULD NOT HAVE BE EN TREATED AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE, CALLING FOR EXERCISE OF REVISIONARY JURISDICTION UNDER SECTION 263. 3. BECAUSE INFORMATION AS AFORESAID AS WAS AVAILABLE ON RECORD AND AS HAD BEEN EXAMINED BY THE ASSESSING OFFICER, BEFORE PASS ING ASSESSMENT ORDER DATED 31.03.2015, MET FULLY THE INGREDIENTS OF SECTION 68 AS WAS ON THE STATUTE BOOK AT THE RELEVANT TIME AND THE LEGAL PRONOUNCEMENT IN TH IS RESPECT AND VIEW TO THE CONTRARY AS HAS BEEN TAKEN BY THE 'CIT' IS WHOLLY ERRONEOUS. 4. BECAUSE SETTING ASIDE OF AN ASSESSMENT ORDER, WHIC H ACCORDED FULLY TO THE PROVISIONS OF LAW, SUFFERS FROM ILL WILL THAT THE 'CIT' CARRIED TOWARDS THE DY. CIT AND THE SAME CANNOT BE SAID TO HAVE BEEN GOVERNED B Y THE CONSIDERATION GERMANE TO EXERCISE OF REVISIONARY JURISDICTION BY THE 'CIT' UNDER SECTION 263 OF THE ACT. 5. BECAUSE MERELY FOR THE REASON THAT THE ASSESSMENT ORDER DATED 31.03.2015 HAD BEEN PASSED BY DY. CIT (ASSESSING OFFICER) QUIC KLY AFTER THE ASSESSEE/ APPELLANT HAD SUBMITTED ALL THE RELEVANT DETAILS, NO MOTIVE C OULD HAVE BEEN IMPUTED, SO LONG AS THE FACT REMAINS THAT THE ASSESSMENT ORDER PASSED BY HIM ACCORDED FULLY WITH THE PROVISIONS OF LAW. 6. BECAUSE OF REVISIONARY JURISDICTION COULD NOT HA VE BEEN EXERCISED BY THE CIT BY HOLDING, INTERALIA, THAT THE ENTIRE CLAIM OF NEW SHARE CAPITAL DOES NOT APPEAR TO SATISFY THE CONDITIONS AND SHOUL D HAVE BEEN DISALLOWED. 7. BECAUSE KEEPING IN VIEW THE UMPTEEN NUMBERS OF C ASE LAWS, SOME OF WHICH BEEN REFERRED TO AND RELIED UPON BY THE ASSESSEE/ APPELLANT IN REVISIONARY PROCEEDINGS, THE SAME DESERVES TO BE DROPPED BY THE 'CIT'. 8. BECAUSE REVISIONARY JURISDICTION HAS BEEN EXERCI SED ON THE BASIS OF SURMISES, CONJECTURES, PRESUMPTION OF BAD FAITH, WH OLLY EXTRANEOUS CONSIDERATION AND BY PLACING RELIANCE ON THE CASE L AWS WHICH WERE DISTINGUISHABLE ON FACTS AND SUCH AN EXERCISE OF JU RISDICTION IS WHOLLY VITIATED. 9. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY T O THE FACTS, LAW AND PRINCIPLE OF NATURAL JUSTICE. 4 ITA NOS. 105/106/ALLD/2017 (ITA NO. 106/ALLD/2017 (A.Y. 2010-11) 1. BECAUSE THE 'CIT' HAS GROSSLY ERRED IN LAW AND ON FACTS IN EXERCISING HIS REVISIONARY JURISDICTION UNDER SECTION 263, IN RELA TION TO THE ASSESSMENT ORDER DATED 31.03.2015 CAPTIONED AS ORDER U/S 147/143(3)(II) OF THE L.T. ACT 1961, FOR THE ASSESSMENT YEAR 2010-11 AND IN DIRECTING THE ASSESSING OFFICE R TO PASS FRESH ASSESSMENT ORDER AFTER MAKING ADDITION OF RS.15,00,000/- WHICH HAD BEEN RECEIVED BY THE ASSESSEE/ APPELLANT AS SHARE APPLICATION MONEY. 2. BECAUSE ON A DUE CONSIDERATION AND APPRECIATION OF MATERIAL AND INFORMATION THAT HAD BEEN PLACED ON RECORD FROM THE SIDE OF THE ASSESSEE/ APPELLANT AND LAW APPLICABLE THERETO BY WAY OF SHARE APPLICAT ION MONEY, PARTICULARLY THAT A) SHARE APPLICATION MONEY AGGREGATING RS.15,00,000/- HAD BEEN RECEIVED FROM THE COMPANY NAMELY ALLIED COMMDEAL PVT. LTD.; B) THE SAID COMPANY WAS IDENTIFIABLE NOT ONLY BY ITS I NCOME-TAX PARTICULARS, BUT ALSO BY THE PARTICULARS AVAILABLE ON WEBSITE OF MIN ISTRY OF CORPORATE AFFAIRS AND REGISTRAR OF COMPANIES; C) THE SAID APPLICANT HAD SUBSCRIBED TO THE SHARE CAPI TAL OF THE COMPANY THROUGH FORMAL APPLICATION IN PRESCRIBED FORM CONTAINING AL L THE RELEVANT DETAILS, EVEN WITH REGARD TO THE REMITTANCES MADE BY IT; D) THE SAID COMPANY HAD BEEN MAINTAINING BANK ACCOUNT WITH AXIS BANK LTD. AND THE REMITTANCE RECEIVED THROUGH CHEQUES/RTGS GOT DU LY CLEARED FROM ITS BANK ACCOUNT; E) THE BANK ACCOUNT AS WELL AS INVESTMENT MADE BY THE SAID SHARE APPLICANT IN THE SHARES OF THE ASSESSEE/ APPELLANT WERE REFLECTED IN ITS AUDITED STATEMENT OF ACCOUNTS AS HAD DULY BEEN PRODUCED BEFORE THE ASSES SING OFFICER; F) IN LIEU OF REMITTANCES MADE BY THE SAID SHARE APPLI CANT, SHARES HAD ACTUALLY BEEN ALLOTTED TO I FOR WHICH STATUTORY RETURN IN 'F ORM NO.2' HAD BEEN FILED BY THE ASSESSEE/ APPELLANT BEFORE THE REGISTRAR OF COMPANIES; G) NAME OF THE SAID SUBSCRIBER APPEARED IN THE SHAREHO LDERS 7 LIST SUBMITTED BY THE ASSESSEE/ APPELLANT AS PART OF 'ANNUAL RETURN 7 WITH REGISTRAR OF COMPANIES AND H) BEFORE COMPLETING ASSESSMENT, IN PURSUANCE OF NO TICE ISSUED UNDER 5 ITA NOS. 105/106/ALLD/2017 SECTION 148, VIDE ORDER DATED 31.03.2015, THE DY. C IT HAD EXAMINED ALL THE ABOVE MENTIONED MATERIAL AND INFORMATION AN D PRINCIPLE OF LAW AS APPLICABLE TO MONIES RECEIVED BY WAY OF SHAR E CAPITAL THE ASSESSMENT ORDER DATED 31.03.2015 COULD NOT HAVE BE EN TREATED AS ERRONEOUS AS WELL AS PREJUDICIAL TO THE INTEREST OF REVENUE, CALLING FOR EXERCISE OF REVISIONARY JURISDICTION UNDER SECTION 263. 3. BECAUSE INFORMATION AS AFORESAID AS WAS AVAILABLE O N RECORD AND AS HAD BEEN EXAMINED BY THE ASSESSING OFFICER, BEFORE PASS ING ASSESSMENT ORDER DATED 31.03.2015, MET FULLY THE INGREDIENTS OF SECTION 68 AS WAS ON THE STATUTE BOOK AT THE RELEVANT TIME AND THE LEGAL PRONOUNCEMENT IN TH IS RESPECT AND VIEW TO THE CONTRARY AS HAS BEEN TAKEN BY THE 'CIT' IS WHOLLY ERRONEOUS. 4. BECAUSE SETTING ASIDE OF AN ASSESSMENT ORDER, WHIC H ACCORDED FULLY TO THE PROVISIONS OF LAW, SUFFERS FROM ILL WILL THAT T HE 'CIT' CARRIED TOWARDS THE DY. CIT AND THE SAME CANNOT BE SAID TO HAVE BEEN GOVERN ED BY THE CONSIDERATION GERMANE TO EXERCISE OF REVISIONARY JURISDICTION BY THE 'CIT' UNDER SECTION 263 OF THE ACT. 5. BECAUSE MERELY FOR THE REASON THAT THE ASSESSMENT O RDER DATED 31.03.2015 HAD BEEN PASSED BY DY. CIT (ASSESSING OF FICER) QUICKLY AFTER THE ASSESSEE/ APPELLANT HAD SUBMITTED ALL THE RELEVANT DETAILS, NO MOTIVE C OULD HAVE BEEN IMPUTED, SO LONG AS THE FACT REMAINS THAT THE ASSESSMENT ORDER PASSED BY HIM ACCORDED FULLY WITH THE PROVISIONS OF LAW. 6. BECAUSE OF REVISIONARY JURISDICTION COULD NOT HAVE BEE N EXERCISED BY THE 'CIT' BY HOLDING, INTERALIA, THAT THE 'ENTIRE CLAIM OF NEW SHARE CAPITAL DOES NOT APPEAR TO SATISFY THE CONDITIONS, AND SHOULD HAVE BEEN DISALL OWED'. 7 BECAUSE KEEPING IN VIEW THE UMPTEEN NUMBERS OF CA SE LAWS, SOME OF WHICH HAD BEEN REFERRED TO AND RELIED UPON BY THE ASSESSE E/APPELLANT IN REVISIONARY PROCEEDINGS, THE SAME DESERVES TO BE DROPPED BY THE CIT. 8. BECAUSE REVISIONARY JURISDICTION HAS BEEN EXER CISED ON THE BASIS OF SURMISES, CONJECTURES, PRESUMPTION OF BAD FAITH, WH OLLY EXTRANEOUS CONSIDERATION AND BY PLACING RELIANCE ON THE CASE LAWS WHICH WERE DISTINGUISHABLE ON FACTS AND SUCH AN EXERCISE OF JURISDICTION IS WHOLLY VITI ATED. 9. BECAUSE THE ORDER APPEALED AGAINST IS CONTRARY TO THE FACTS, LAW AND PRINCIPLE OF NATURAL JUSTICE. 3. FOR THE SAKE OF CONVENIENCE WE ARE TAKING UP THE FACTS FOR A.Y. 2009-10 AS THE ISSUES ARE SIMILAR IN BOTH THE APPEALS. THE ASSESSEE COMPANY HAD FILED 6 ITA NOS. 105/106/ALLD/2017 RETURN OF INCOME ON 8.9.2009 U/S 139(1) OF THE ACT, WHICH WAS ACCEPTED U/S 143(1). THE ASSESSMENT WAS REOPENED BY ISSUANCE OF NOTICE U/S 148 DATED 20/1/2015, SOLELY FOR EXAMINATION AND GENUINENESS O F SHARE APPLICATION MONEY AGGREGATING RS.16,00,000/- AS HAD BEEN RECEIV ED DURING THE RELEVANT PREVIOUS YEAR FROM THE TWO COMPANIES NAMELY (I) MOU NT VIEW DEALCOMM PVT. LTD., AND KANHAIYA CEMENT PVT. LTD. IN PURSUANCE OF THE SAID NOTICE THE ASSESSEE APPEARED BEFORE THE ASSESSING OFFICER AND SUBMITTED DETAILED RESPONSE AS UNDER: A) SHARE APPLICATION MONEY AGGREGATING RS.16,00,00 0/- HAD BEEN RECEIVED FROM THE TWO COMPANIES NAMELY (I) MOUNT VI EW DEALCOMM PVT. LTD., AND (II) KANHAIYA CEMENT PVT. LTD.; B) THE TWO COMPANIES WERE IDENTIFIABLE NOT ONLY BY THE IR INCOME-TAX PARTICULARS, BUT ALSO BY THE PARTICULARS AVAILABLE ON WEBSITE OF MINISTRY OF CORPORATE AFFAIRS AND REGISTRAR OF COMPANIES; C) THE SAID APPLICANTS HAD SUBSCRIBED TO THE SHARE CA PITAL OF THE COMPANY THROUGH FORMAL APPLICATION IN PRESCRIBED FORM CONTA INING ALL THE RELEVANT DETAILS, EVEN WITH REGARD TO THE REMITTANCES MADE B Y THEM; D) THE SAID COMPANIES HAD BEEN MAINTAINING BANK ACCOU NT WITH AXIS BANK LTD. AND THE REMITTANCE RECEIVED THROUGH CHEQUES/RT GS GOT DULY CLEARED FROM THEIR BANK ACCOUNTS; E) THE BANK ACCOUNT AS WELL AS INVESTMENT MADE BY THE SAID TWO SHARE APPLICANTS IN THE SHARES OF THE ASSESSEE/APPELLANT WERE REFLECTED IN THEIR AUDITED STATEMENT OF ACCOUNTS AS HAD DULY BEEN PROD UCED BEFORE THE ASSESSING OFFICER; F) IN LIEU OF REMITTANCES MADE BY THE TWO SHARE APPLI CANTS, SHARES HAD ACTUALLY BEEN ALLOTTED TO THEM FOR WHICH STATUTORY RETURN IN 'FORM NO.2' HAD BEEN FILED BY THE ASSESSEE BEFORE THE REGISTRAR OF COMPANIES; G) NAMES OF THE TWO SUBSCRIBERS APPEARED IN THE SHARE HOLDERS' LIST SUBMITTED BY THE ASSESSEE AS PART OF 'ANNUAL RETURN ' WITH REGISTRAR OF COMPANIES IN SUPPORT OF THE SUBMISSIONS, THE ASSESSEE PLACED THE DOCUMENTARY EVIDENCES 7 ITA NOS. 105/106/ALLD/2017 ON RECORD BEFORE THE ASSESSING OFFICER. THE ASSESSM ENT ORDER WAS PASSED BY NIL TOTAL INCOME. 4. NOTICE UNDER SECTION 263(1) WAS ISSUED BY THE PR . CIT, GORAKHPUR, CAMP AT FAIZABAD WHEREIN IT WAS HELD THAT THE ORDER DATE D 31.03.2015 WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF THE RE VENUE. IN RESPONSE TO THE SAID NOTICE, THE ASSESSEE MADE DETAILED SUBMISSIONS WITH REFERENCE TO THE MATERIAL AND INFORMATION ALREADY ON RECORD BEFORE THE ASSESS ING OFFICER. 5. THE PR. CIT, WITHOUT DISPUTING THE SUBMISSIONS M ADE BY THE ASSESSEE HELD U/S 263 OF THE ACT THAT THE ASSESSMENT ORDER D ATED 31.03.2015 CAPTIONED AS ORDER 'UNDER SECTION 147 READ WITH SECTION 143(3 ) WAS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE' AND WENT TO THE EXTENT OF DIRECTING THE ASSESSING OFFICER TO PASS AN ORDER WITHIN THREE MONTHS, AFTER MAKING ADDITION OF RS.16,00,000/- BY INVOKING SECTION 68 O F THE ACT. 6. AGGRIEVED BY THE ORDER U/S 263 OF THE ACT, THE A SSESSEE FILED PRESENT APPEALS. 7. THE LD. AR SUBMITTED THAT THE ASSESSMENT YEAR IN QUESTION AND IN THE CONTEXT OF RECEIPTS BY WAY OF SHARE APPLICATION MON EY, SOURCE OF SOURCE WAS NOT REQUIRED TO BE PROVED AS PER UMPTEEN NUMBER OF CASE LAWS, PARTICULARLY WHERE THE ASSESSEE STOOD ACQUITTED FROM THE RECEIPTS BY WAY OF ALLOTMENT OF SHARES, AS IS THE CASE HERE. THE LD. AR FURTHER SUBMITTED THAT THE ORDER PASSED BY THE PR. CIT, GORAKHPUR IS IN VIOLATION OF UMPTEEN NUMBE R OF CASE LAWS INCLUDING THOSE OF HONBLE APEX COURT AND THE JURISDICTIONAL HIGH COURT, BUT THE SAME RUNS COUNTER TO THE PRINCIPLE LAID DOWN BY THE HON' BLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. JAGADHRI ELECTRIC SUPPLY AND INDUSTRIAL CO. REPORTED IN (1983) 140 ITR 490 WHEREIN IT IS HELD AS UNDER:- 8 ITA NOS. 105/106/ALLD/2017 THE JURISDICTION VESTED IN THE COMMISSIONER UNDER S. 263 (1) OF THE ACT IS OF A SPECIAL NATURE OR, IN OTHER WORDS, THE COMM ISSIONER HAS THE EXCLUSIVE JURISDICTION UNDER THE ACT TO REVISE THE ORDER OF THE ITO IF HE CONSIDERS THAT ANY ORDER PASSED BY HIM WAS ERRONEOU S IN SO FAR AS IT WAS PREJUDICIAL TO THE INTERESTS OF REVENUE. BEFORE DOI NG SO, HE IS ALSO REQUIRED TO GIVE AN OPPORTUNITY OF BEING HEARD TO T HE ASSESSEE. IF AFTER HEARING THE ASSESSEE IN PURSUANCE OF THE NOTICE ISS UED BY HIM UNDER S. 263 (1) OF THE ACT, HE IS NOT SATISFIED, HE MAY PAS S THE NECESSARY ORDERS. OF COURSE, THE ORDER THUS PASSED WILL CONTAIN THE G ROUNDS FOR HOLDING THE ORDER OF THE ITO TO BE ERRONEOUS, AS CONTEMPLATED U NDER S.263 (1) OF THE ACT. FEELING AGGRIEVED THEREFORE, THE ASSESSEE MAY FILE AN APPEAL AGAINST THE SAME, AS PROVIDED UNDER S.253 (1)(C) OF THE ACT . IN THE MEMORANDUM OF APPEAL, THE ASSESSEE IS SUPPOSED TO ATTACH THE O RDER OF THE COMMISSIONER AND TO CHALLENGE THE GROUNDS FOR DECIS ION GIVEN BY HIM IN HIS ORDER. AT THE TIME OF THE HEARING, IF THE ASSES SEE CAN SATISFY THE TRIBUNAL THAT THE GROUNDS FOR DECISION GIVEN IN THE ORDER BY THE COMMISSIONER ARE WRONG ON FACTS OR ARE NOT TENABLE IN LAW, THE TRIBUNAL HAS NO OPTION, BUT TO ACCEPT THE APPEAL AND TO SET ASIDE THE ORDER OF THE COMMISSIONER. THE TRIBUNAL CANNOT UPHOLD THE ORDER OF THE COMMISSIONER ON ANY OTHER GROUND WHICH, IN ITS OPIN ION, WAS AVAILABLE TO THE COMMISSIONER AS WELL. IF THE TRIBUNAL IS ALL OWED TO FIND OUT THE GROUNDS AVAILABLE TO THE COMMISSIONER TO PASS AN OR DER UNDER S.263 (1) OF THE ACT, THEN IT WILL AMOUNT TO A SHARING OF THE EXCLUSIVE JURISDICTION VESTED IN THE COMMISSIONER, WHICH IS NOT WARRANTED UNDER THE ACT. IT IS ALL THE MORE SO, BECAUSE THE REVENUE HAS NOT BEEN G IVEN ANY RIGHT OF APPEAL UNDER THE ACT AGAINST AFT ORDER OF THE COMMI SSIONER UNDER S.263 (1) OF THE ACT. 8. THE LD. AR SUBMITTED THAT SECTION 263 NOTICE IS INVALID AS THE ASSESSMENT WAS ALREADY DONE U/S 147 OF THE INCOME T AX ACT, 1961 AFTER 9 ITA NOS. 105/106/ALLD/2017 VERIFYING ALL THE DOCUMENTS BY THE ASSESSING OFFICE R DURING THE ASSESSMENT PROCEEDINGS. THE ISSUE RAISED BY THE COMMISSIONER RELATING TO INVOKING SECTION 263 WAS ALREADY TAKEN INTO ACCOUNT BY THE A SSESSING OFFICER WHICH CAN BE SPECIFICALLY SEEN IN THE QUESTIONNAIRE AT PA GE 15 OF PAPER BOOK AS WELL AS THERE IS A REASON AT PAGE 13 OF PAPER BOOK. THE ASSESSEE RELIED UPON THE HONBLE ALLAHABAD HIGH COURT JUDGMENT IN CASE OF MA HINDER KUMAR BANSAL AS WELL AS HON'BLE SUPREME COURT JUDGMENT IN CASE OF M AX INDIA AND LOVELY EXPORT. 9. THE LD. DR RELIED UPON THE ORDER OF COMMISSIONER . 10. WE HAVE HEARD BOTH THE PARTIES AND PERUSED THE MATERIAL AVAILABLE ON RECORD. THE PRINCIPAL CIT HAS MENTIONED THAT THE IS SUE OF SHARE CAPITAL AT HUGE PREMIUM WITHOUT ANY UNDERLINE BASIS IN PERFORMANCE OF BUSINESS OF THE ASSESSEE WAS NOT EXAMINED BY THE ASSESSING OFFICER. THE GENUINENESS OF THE TRANSACTION WAS NOT EXAMINED BY THE ASSESSING OFFIC ER AS WELL AS THE ENTIRE CLAIM OF NEW SHARE CAPITAL AND ITS CREDITWORTHINESS WAS NOT EXAMINED UNDER SECTION 68 BY THE ASSESSING OFFICER. IN-FACT, IN T HE ASSESSMENT ORDER THE ASSESSING OFFICER HAS NOT COMMENTED AS TO HOW THE G ENUINENESS, CREDITWORTHINESS AND IDENTITY WAS ESTABLISHED AFTER PRODUCTION OF THE DOCUMENTS BY THE ASSESSEE. THE ASSESSING OFFICER H AS NOT ISSUED NOTICES TO THOSE COMPANIES FOR VERIFYING THE GENUINENESS AND C REDITWORTHINESS OF THESE COMPANIES. THEREFORE, THE PR. CIT HAS RIGHTLY POIN TED OUT THAT THE ASSESSING OFFICER HAS PASSED THE ORDER IN THE HURRIED MANNER. THE TRANSACTION OF ISSUE OF 32,000/- SHARES OF RS.10 LAKHS EACH WITH PREMIUM OF RS.40 AGGREGATE TO RS.16 LAKHS IN ASSESSMENT YEAR 2009-10 AND THE TRANSACTIO N OF ISSUE OF 30,000/- SHARES OF RS.10 EACH AT PREMIUM OF RS.40, AGGREGATI NG TO RS.15 LAKH IN ASSESSMENT YEAR 2010-11 FAILS THE TEST OF GENUINENE SS WITHIN THE MEANING OF SECTION 68. THE ASSESSING OFFICER IN ASSESSMENT OR DER HAS NOT AT ALL COMMENTED ON THE CREDITWORTHINESS AND GENUINENESS O F THE PARTIES. HE HAS SIMPLY MADE A COMMENT THAT INVESTMENT WAS DULY REFL ECTED IN BALANCE-SHEET 10 ITA NOS. 105/106/ALLD/2017 AND WAS MADE THROUGH BANK ACCOUNT. MERELY INVESTME NT REFLECTING IN BALANCE- SHEET AND MADE THROUGH BANK ACCOUNT DOES NOT PROVE THAT THE PARTIES ARE GENUINE AND CREDITWORTHINESS IS PROVED. IN-FACT, T HE ASSESSEE RELIED ON THE JUDGMENTS OF LOVELY EXPORT WHICH ALSO REITERATES TH AT GENUINENESS AND CREDITWORTHINESS CANNOT BE SIMPLY ESTABLISHED FROM THE BANKING TRANSACTIONS OF THE PARTIES. IN THIS PARTICULAR CASE, THOUGH TH E PLEA OF THE ASSESSEE WAS THAT THERE ARE TWO OPINIONS, THE SAME DOES NOT SUSTAIN, AS THE PRINCIPAL COMMISSIONER OF INCOME TAX AFTER VERIFYING ALL THE ASPECTS FROM THE RECORDS HAS COME TO THE CONCLUSION THAT THE GENUINENESS AND CRE DITWORTHINESS WAS NOT VERIFIED BY THE ASSESSING OFFICER AND UNDER THE PUR VIEW OF SECTION 263. THE CIT HAS THE POWER TO TAKE COGNIZANCE OF THE ASSESSM ENT ORDERS WHICH ARE PREJUDICIAL TO THE INTEREST OF THE REVENUE AS WELL AS ERRONEOUS. IN THIS PARTICULAR CASE, THE ASSESSMENT ORDER IS ERRONEOUS NOT ONLY BECAUSE IT IS PASSED IN HURRIED MANNER BUT ALSO THE ASSESSING OFF ICER HAS NOT VERIFIED THE GENUINENESS AND CREDITWORTHINESS OF THE PARTIES. I N CASE OF MAX INDIA IT IS REITERATED THAT THOUGH THE TWO VIEWS ARE NOT POSSIB LE, STILL THE VIEW TAKEN BY INCOME TAX OFFICER WHEN IS UNSUSTAINABLE IN LAW, HA S TO BE TAKEN COGNIZANCE BY THE CIT UNDER THE POWER OF U/S 263 WHEREIN THE P OWER ARE BESTOWED UPON THE CIT TO REVISE SUCH ASSESSMENT ORDERS WHICH ARE UNSUSTAINABLE IN LAW. THE GENUINENESS AND THE CREDITWORTHINESS WAS NOT AT ALL EXAMINED BY THE ASSESSING OFFICER AT ANY POINT OF TIME. MERELY RELYING ON THE DOCUMENTS PRODUCED BY THE ASSESSEE WILL NOT BE SUFFICIENT AS PER THE DUTY OF THE ASSESSING OFFICER. THE ASSESSING OFFICER HAS TO MAKE FURTHER ENQUIRIES AND EXAMINE THE SAME WHICH ARE NECESSARY TO THE INTEREST OF THE REVENUE. THE O THER CASE LAWS SUBMITTED BY THE LD. AR IN FACT REITERATES THAT WHEN THE ASSESSI NG OFFICER PASSED ANY ASSESSMENT ORDER WHICH IS UNSUSTAINABLE IN LAW, THE SAME COMES UNDER THE PURVIEW OF SECTION 263. THEREFORE, THE PR. CIT HAS RIGHTLY PASSED ORDER U/S 263 AND SET ASIDE THE ASSESSMENT ORDER TO THE FILE OF THE ASSESSING OFFICER ON LIMITED ISSUE TO ADOPT THE ACTION U/S 68. FOR A.Y. 2010-11 BEING ITA 106/ALLD/2017 THE ISSUE IS IDENTICAL. THEREFORE, WE UPHOLD THE ORDERS OF THE PR. CIT PASSED UNDER SECTION 263 OF THE ACT. 11 ITA NOS. 105/106/ALLD/2017 11. IN RESULT, THE APPEALS OF THE ASSESSEE ARE DISM ISSED ALONG WITH STAY APPLICATION. ORDER PRONOUNCED ON THE 18 TH DAY OF SEPTEMBER, 2017. SD/- SD/- (R. K. PANDA) (SUCHITRA KAM BLE) ACCOUNTANT MEMBER JUDICIAL MEMBE R DATED: 18/09/2017 R. NAHEED COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT AS SISTANT REGISTRAR ITAT ALLAHABAD DATE 1. DRAFT DICTATED ON 14/07/2017 PS 12 ITA NOS. 105/106/ALLD/2017 2. DRAFT PLACED BEFORE AUTHOR 24/07/2017 PS 3. DRAFT PROPOSED & PLACED BEFORE THE SECOND MEMBER .2017 JM/AM 4. DRAFT DISCUSSED/APPROVED BY SECOND MEMBER. JM/AM 5. APPROVED DRAFT COMES TO THE SR.PS/PS 18.09.2017 PS/PS 6. KEPT FOR PRONOUNCEMENT ON PS 7. FILE SENT TO THE BENCH CLERK 1 9 .09.2017 PS 8. DATE ON WHICH FILE GOES TO THE AR 9. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 10. DATE OF DISPATCH OF ORDER.