M/s Kar Investment Ltd, Kolkata V. C.I.T kol - I, Kolkata

ITA 1310/KOL/2013

• Counselvise Citation: 131023514 RSA 2013
• Duration Of Justice: 2 year(s) 5 month(s) 14 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 16-05-2013
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: S M SURANA
• Keywords: Period of limitation; Time period of passing order
• Section: 143(3); 133(6); 147; 68; 148; 263

Judgement Text

1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES : D : KOLKATA BEFORE SHRI R.S. SYAL, AM & SHRI N.V. VASUDEVAN, JM ITA NO.1153/KOL/2013 ASSESSMENT YEAR:2008-09 M/S JASONS DEPOSIT AND ADVANCES LTD., 83/85, N.S.ROAD, 4 TH FLOOR, ROOM NO. 42-A, KOLKATA- 700001. PAN : AAACJ-3357-J VS. COMMISSIONER OF INCOME TAX, KOLKATA-I, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.1310/KOL/2013 ASSESSMENT YEAR:2008-09 M/S KANER INVESTMENT LTD., ROOM NO.42A, 4 TH FLOOR, 83/85, N.S.ROAD, KOLKATA 700001. PAN : AABCA 2860 N VS. COMMISSIONER OF INCOME TAX, KOLKATA-I, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.1361/KOL /2013 ASSESSMENT YEAR : 200 9-10 M/S. CHURNI TIE-UP PVT. LTD., 7, GRANT LANE, 4 TH FLOOR, ROOM NO.401, KOLKATA-700012, PAN : AADCC 5790 M VS. COMMISSIONER OF INCOME TAX, KOLKATA-III, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. 2 ITA NO.1156/KOL/2 013 ASSESSMENT YEAR : 20 08-09 M/S GANESH COMPLEX PVT. LTD., 9, LALBAZAR STREET, KOLKATA 700001. PAN : AADCG 0583 G VS. COMMISSIONER OF INCOME TAX, KOLKATA-II, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.1071/KOL/201 4 ASSESSMENT YEAR 2010-1 1 M/S. GRACEFUL FINANCIAL CONSULTANCY PVT. LTD. RAJESH MOHAN & ASSOCIATES, 34, GANESH CHANDRA AVENUE, KOLKATA-700013. PAN : AADCG 6345 G VS. COMMISSIONER OF INCOME TAX, KOLKATA-II, AAYAKAR BHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.1625/KOL/2013 ASSESSMENT YEAR 2009-1 0 ELEGANT TREXIM (P) LTD. 19/12, LALBAZAAR STREET, KOLKATA-700001. PAN : AACCE 0378 C VS. COMMISSIONER OF INCOME TAX, KOLKATA-II, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.1309/KOL/2013 ASSESSMENT YEAR 2009-1 0 M/S.SUBHLAB MANAGEMENT PVT.LTD., 8, CAMAC STREET, , KOLKATA-700017. PAN : AALCS 1766M VS. COMMISSIONER OF INCOME TAX, KOLKATA-II, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. 3 ITA NO.1150/KOL/2013 ASSESSMENT YEAR 2009-1 0 DIVYAJOTI VANIJYA 27, BURTOLLA STREET, KOLKATA-700007. PAN : AACCD 8032 A VS. COMMISSIONER OF INCOME TAX, KOLKATA-II, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. (APPELLANTS) (RESPONDENTS) ASSESSEE BY : S.M.SURANA, ADVOCATE DEPARTMENT BY : SHRI NIRAJ KUMAR, CIT, DR. DATE OF HEARING : 29.10.2015 DATE OF PRONOUNCEMENT : 30.10.2015 ORDER THROUGH THIS BATCH OF APPEALS, DIFFERENT ASSESSEES ASSAIL THE CORRECTNESS OF SEPARATE ORDERS PASSED BY THE COMMIS SIONERS OF INCOME- TAX (CIT) U/S 263 OF THE INCOME-TAX ACT, 1961 (HERE INAFTER ALSO CALLED THE ACT) IN RELATION TO THE CAPTIONED ASSESSMENT YEARS. SINCE ALL THESE APPEALS ARE BASED ON LARGELY SIMILAR FACTS AND COMM ON GROUNDS OF APPEAL, WE ARE PROCEEDING TO DISPOSE THEM OFF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 4 2. BRIEFLY STATED THE FACTS OF ALL THE CASES IN THIS BATCH ARE SIMILAR INASMUCH AS RETURNS WERE FILED BY SUCH COMPANIES WI TH MEAGRE INCOME; INTIMATIONS WERE ISSUED U/S 143(1); THEREAFTER NOTI CES U/S 148 WERE ISSUED EITHER AT THE INSTANCE OF SUCH COMPANIES DIV ULGING A PALTRY ESCAPEMENT OF INCOME OR OTHERWISE ; ASSESSMENT ORD ERS WERE PASSED U/S 143(3) READ WITH SECTION 147 AFTER MAKING NOMINAL A DDITIONS AND THE AOS, DURING THE COURSE OF SUCH ASSESSMENT PROCEEDIN GS, MADE SOME FORMAL ENQUIRIES ABOUT SHARES ISSUED BY SUCH COMPAN IES AT HUGE PREMIUM BY ISSUING NOTICES U/S 133(6) TO SOME OF TH E SHAREHOLDERS AND GETTING SATISFIED WITHOUT ANY FURTHER INVESTIGATION . THE JURISDICTIONAL CITS HAVE PASSED ORDERS U/S 263 IN ALL SUCH CASES, WHICH HAVE BEEN ASSAILED BEFORE THE TRIBUNAL. 3. BOTH THE SIDES HAVE FAIRLY ADMITTED THAT FACT S AND CIRCUMSTANCES OF THE CASES UNDER CONSIDERATION ARE MUTATIS MUTANDIS SIMILAR TO THOSE DECIDED EARLIER EXCEPT FOR THE ARGUMENTS TAKEN SEPA RATELY IN SOME OF THE CASES UNDER CONSIDERATION, WHICH WE WILL ADVERT TO A LITTLE LATER. IN OUR AFORESAID ORDER IN SUBHLAKSHMI VANIJYA PVT. LTD., VS. CIT (ITA NO. 5 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 6 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. 7 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 SOME OF THE ORDERS ARE UNSIGNED, UNSTAMPED AND UNENDORSED. THE LD. DR CONTENDED THAT THE ASSESSEE HAS SIMPLY FILED COPIES OF THE ORDERS OF THE LD. CIT. IT WAS SUBMITT ED THAT ALL THE ORDERS WERE OTHERWISE PROPERLY SIGNED, STAMPED AND ENDORSE D. HE OFFERED TO PRODUCE THE IMPUGNED ORDERS IN ORIGINAL, FOR WHICH THE LD. AR DID NOT SHOW ANY SERIOUS INTEREST. IN SUCH CIRCUMSTANCES, W E ACCEPT THAT THE ORDERS WERE PROPERLY SIGNED. 5. THE LD. AR THEN ARGUED THAT NO NOTICE WAS EVE R SERVED UPON THE ASSESSEE AND NOTICE WAS SERVED AT OLD ADDRESS THROU GH AFFIXATION. WE DO NOT FIND ANY SUBSTANCE IN THIS ARGUMENT AS THIS POI NT HAS ALSO BEEN THOROUGHLY DISCUSSED IN THE LEAD ORDER IN SUBHLAKSHMI VANIJYA PVT. LTD. (SUPRA), AND THE LD. AR HAS NOT DRAWN OUR ATTENTION TOWARDS ANY 8 DISTINGUISHING FACTOR PREVAILING IN THE INSTANT CAS ES. NO MATERIAL HAS BEEN BROUGHT ON RECORD TO DEMONSTRATE THAT THE NEW ADDRESS WAS DULY COMMUNICATED TO THE REVENUE. FURTHER THE LD. AR HAS ACCEPTED IN HIS BROADER POINTS SEPARATELY URGED BEFORE US THAT THE ORDER SENT BY THE SPEED POST WAS DULY SERVED AT THE OLD ADDRESS. ONCE IT IS ACCEPTED THAT THE ORDER HAS BEEN SERVED TO THE ASSESSEE AT THE OLD ADDRESS, IT SHOWS THAT THE ASSESSEE WAS PRESENT AT THE OLD ADDRESS BUT WILLING LY AVOIDING THE SERVICE OF NOTICE MADE BY THE LD. CIT. IN SUCH CIRCUMSTANCE S, THE LD. CIT WAS LEFT WITH NO OPTION BUT TO SERVE THE NOTICE BY AFFI XTURE AT THE SAID ADDRESS. 6. THE NEXT ARGUMENT WAS THAT THE ALLOTMENT WAS MADE AGAINST PURCHASE OF INVESTMENTS AND IT WAS NOT A CASE OF CA SH CREDIT. IN OUR CONSIDERED OPINION, THIS FACTOR DOES NOT CHANGE THE CHARACTER OF THE TRANSACTION OF ISSUE OF BOGUS SHARES AT HEFTY PREMI UM IN A CLANDESTINE MANNER. 7. THE NEXT ARGUMENT WAS THAT NOTICES U/S133(6) SENT TO ALL THE SHAREHOLDERS WERE COMPLIED WITH. AGAIN, WE ARE UNAB LE TO COMPREHEND THAT HOW THIS POINT IS GOING TO CHANGE THE COMPLEXI ON OF THE CASE. IT IS 9 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 LAST POINT OF MERGER, WE FIND THAT THIS ISSUE HAS ALSO BEEN DISCUSSED 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 FOLLOWING THE VIEW TAKEN IN SUBHLAKSHMI VANIJYA PVT. LTD. (SUPRA) , WE UPHOLD ALL THE IMPUGNED ORDERS. 10. IN THE RESULT, ALL THE APPEALS ARE DISMISSED . THE ORDER PRONOUNCED IN THE OPEN COURT ON 30.10.20 15. SD/- SD/- [N.V. VASUDEVAN] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 30 TH OCTOBER, 2015. RG 10 COPY FORWARDED TO: APPELLANT RESPONDENT CIT CIT (A) DR, ITAT AR, ITAT, KOLKATA 11