M/s Jugantar Mercantiles Pvt Ltd, Kolkata V. C.I.T kol - III, Kolkata

ITA 1187/KOL/2013

• Counselvise Citation: 118723514 RSA 2013
• Duration Of Justice: 2 year(s) 5 month(s) 20 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: B
• Assessment Year: 2009-2010
• Appeal Filed On: 10-05-2013
• Court: TRIBUNAL
• Department Lawyers: S SRIVASTAVACIT
• Assessee Lawyers: S M SURANA
• Keywords: Revision of order; Period of limitation; Time period of passing order
• Section: 133(6); 147; 68; 148; 263; 2

Judgement Text

1 ITA NO.1187/KOL/2013 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES : D : KOLKATA ITA NO.1187/KOL/2013 ASSESSMENT YEAR:2009-10 M/S. JUGANTAR MERCANTILES PVT.LTD., 15, U.N.BRAHMACHARI STREET, 3 RD FLOOR, FLAT NO.6, KOLKATA-700017. PAN : AAACJ 6600J VS. COMMISSIONER OF INCOME TAX, KOLKATA-III, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. (APPELLANT) (RESPONDENT) ASSESSEE BY : S.M.SURANA, ADVOCATE DEPARTMENT BY : SHRI.S.SRIVASTAVA,CIT, DR. DATE OF HEARING : 30.10.2015 DATE OF PRONOUNCEMENT : 30.10.2015 ORDER PER BENCH THROUGH THIS APPEAL, THE ASSESSEE ASSAILS THE CORR ECTNESS OF THE ORDER PASSED BY THE COMMISSIONERS OF INCOME-TAX (CI T) U/S 263 OF THE 2 ITA NO.1187/KOL/2013 INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATION TO THE CAPTIONED ASSESSMENT YEAR. 2. BRIEFLY STATED THE FACTS OF THE CASE ARE RETU RN WAS FILED WITH A MEAGRE INCOME OF RS.11,530; INTIMATION WAS ISSUED U/S 143 (1); THEREAFTER NOTICES U/S 148 WAS ISSUED AT THE INSTANCE OF THE A SSESSEE DIVULGING THAT CONSULTANCY FEE TO THE TUNE OF RS.62,000 WAS OMITTE D TO BE INCLUDED IN TOTAL INCOME ; ASSESSMENT ORDER WAS PASSED U/S 143 (3) READ WITH SECTION 147 AFTER MAKING NOMINAL ADDITIONS AND THE AO, DURI NG 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 133(6) TO SOME OF THE SHAREHOLDERS AND GETTING SATISFIED W ITHOUT ANY FURTHER INVESTIGATION. THE JURISDICTIONAL CIT HAS PASSED OR DER U/S 263, WHICH HAS BEEN ASSAILED BEFORE THE TRIBUNAL. 3. BOTH THE SIDES HAVE FAIRLY ADMITTED THAT FACT S AND CIRCUMSTANCES OF THE CASE UNDER CONSIDERATION ARE MUTATIS MUTANDIS SIMILAR TO THOSE DECIDED EARLIER EXCEPT FOR THE ARGUMENTS TAKEN SEPA RATELY, WHICH WE WILL ADVERT TO A LITTLE LATER. IN OUR AFORESAID ORDER I N SUBHLAKSHMI VANIJYA 3 ITA NO.1187/KOL/2013 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 AD DITION ON ACCOUNT 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 ORDE R 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 S UCH ASSESSMENT ORDER, 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, NOTWITHSTANDI NG THE JURISDICTION OF THE AO IN MAKING ENQUIRIES ON THE I SSUES OR MATTERS AS HE CONSIDERS FIT IN TERMS OF SECTION 142 (1) AND 143(2) OF THE ACT, WHICH IS RELEVANT 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 EMPOWERED TO REVISE THE ASSESSMENT ORDER ; IV) THE ORDER OF THE CIT IS NOT BASED ON IRRELEVANT CONSIDERATIONS AND FURTHER IN THE PRESENT CIRCUMSTA NCES, HE WAS NOT OBLIGED TO POSITIVELY INDICATE THE DEFICIEN CIES IN THE ASSESSMENT ORDER ON 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 4 ITA NO.1187/KOL/2013 THE PREMISE THAT THE AO DID NOT MAKE ENQUIRY THEREB Y RENDERING THE ASSESSMENT ORDER ERRONEOUS AND PREJUD ICIAL 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 AFFIX TURE OR OTHERWISE. FURTHER THE LAW DOES NOT REQUIRE THE SER VICE OF NOTICE U/S 263 STRICTLY AS PER THE TERMS OF SECTION 282 OF THE ACT. THE ONLY REQUIREMENT ENSHRINED IN THE PROVISION IS TO GIVE A N OPPORTUNITY OF HEARING TO THE ASSESSEE, WHICH HAS BEEN COMPLIED WI TH IN ALL SUCH 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. 14 3(3) AND NOT THE DATE OF INTIMATION ISSUED U/S 143(1) OF THE ACT, WH ICH 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 J URISDICTION 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 INTENTI ON OF THE ASSESSEE IS TO DEFRAUD THE REVENUE BY EITHER FILING RETURNS, AFTER AMALGAMATION, IN THE OLD NAME OR OTHERWISE, THEN TH E 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 PARTICI PATION OF THE ASSESSEE 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. 5 ITA NO.1187/KOL/2013 J. REFUSAL BY THE REVENUE TO ACCEPT THE WRITTEN SUBMIS SIONS OF THE ASSESSEE SENT AFTER THE CONCLUSION OF HEARING CANNO T RENDER THE ORDER 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. 4. NOW WE ESPOUSE THE SEPARATE POINTS RAISED BY THE LD. AR. THE FIRST ARGUMENT WAS THAT NOTICES U/S 133(6) OF THE ACT SEN T TO ALL THE SHAREHOLDERS WERE COMPLIED WITH AND HENCE NO ADVERS E INFERENCE SHOULD HAVE BEEN DRAWN AGAINST THE ASSESSEE. WE ARE UNABL E TO COMPREHEND THAT HOW THIS POINT IS GOING TO CHANGE THE COMPLEXI ON OF THE CASE. IT IS NOT THE CASE OF THE REVENUE THAT THE NOTICES WERE N OT COMPLIED WITH BY THE ALLEGED SHAREHOLDERS. RATHER, THE POSITION IS T HAT THESE WERE PAPER TRANSACTIONS. 8. AS REGARDS THE OTHER POINTS URGED SEPARATELY BEFORE US INCLUDING LIMITATION, WE FIND THAT ALL SUCH ISSUES HAVE BEEN DISCUSSED AND ARE COVERED AGAINST THE ASSESSEE IN THE LEAD ORDER. 9. THE LD. AR ADMITTED THAT BUT FOR THE ABOVE, AL L OTHER ISSUES ARE COVERED BY THE LEAD ORDER. IN VIEW OF THE FOREGOING DISCUSSION AND 6 ITA NO.1187/KOL/2013 FOLLOWING THE VIEW TAKEN IN SUBHLAKSHMI VANIJYA PVT. LTD. (SUPRA) , WE UPHOLD THE IMPUGNED ORDER. 10. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.10.20 15. SD/- SD/- [R.S. SYAL] [N.V. VASUDEVAN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 30 TH OCTOBER, 2015. COPY FORWARDED TO: APPELLANT RESPONDENT CIT CIT (A) DR, ITAT AR, ITAT, KOLKATA. 7 ITA NO.1187/KOL/2013