M/s Black Berry Vyapaar Pvt Ltd, Kolkata V. I.T.O Wd - 6(1),kolkata, Kolkata

ITA 1672/KOL/2013

• Counselvise Citation: 167223514 RSA 2013
• Duration Of Justice: 2 year(s) 5 month(s) 6 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: C
• Assessment Year: 2008-2009
• Appeal Filed On: 30-05-2013
• Court: TRIBUNAL
• Department Lawyers: S SRIVASTAVA
• Assessee Lawyers: NIRAV SHETH CA IN ITA NO K; V K GUPTA CA IN ITA NO K
• Keywords: Period of limitation; Time period of passing order
• Section: 133(6); 147; 68; 148; 263

Judgement Text

ITA NO.1672/KOL/13 & 175/KOL/15 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES :D : KOLKATA BEFORE SHRI R.S. SYAL, AM & SHRI N.V. VASUDEVAN, JM ITA NO.1672/KOL/2 013 ASSESSMENT YEAR : 20 08-09 M/S.BLACK BERRY VYAPPAR PVT. LTD., 40, WESTON STREET, 3 RD FLOOR, KOLKATA 700069. PAN : AABCB 3718 L VS. COMMISSIONER OF INCOME TAX, KOLKATA-II, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.175/KOL/20 15 ASSESSMENT YEAR : 20 08-09 M/S.ACCURATE AGENCY PVT. LTD., CHAPPARIA & ASSOCIATES, CHARTERED ACCOUNTANTS, 8, CAMAC STREET, SHANTINIKETAN BUILDING, 5 TH FLOOR, ROOM NO.2, KOLKATA 700017. PAN : AAGCA 2713H VS. COMMISSIONER OF INCOME TAX, KOLKATA-III, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. (APPELLANTS) (RESPONDENTS) ASSESSEE BY : MR.NIRAV SHETH CA IN ITA NO. 175/K/15 & MR. V.K.GUPTA CA IN ITA NO.1672/K/13 DEPARTMENT BY : S.SRIVASTAVA CIT DR ITA NO.1672/KOL/13 & 175/KOL/15 2 DATE OF HEARING : 05.11.2015 DATE OF PRONOUNCEMENT : 05 .11.2015 ORDER THROUGH THESE TWO APPEALS, THE ASSESSEES ASSAIL TH E CORRECTNESS OF SEPARATE ORDERS PASSED BY THE COMMISSIONERS OF INCO ME-TAX (CIT) U/S 263 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO C ALLED THE ACT) IN RELATION TO THE CAPTIONED ASSESSMENT YEARS. SINCE T HESE APPEALS ARE BASED ON LARGELY SIMILAR FACTS AND COMMON GROUNDS OF APPE AL, WE ARE PROCEEDING TO DISPOSE THEM OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED THE FACTS OF THESE TWO APPEALS ARE SIMILAR INASMUCH AS RETURNS WERE FILED BY SUCH COMPANIES WITH MEAGRE IN COME; INTIMATIONS WERE ISSUED U/S 143(1); THEREAFTER NOTICES U/S 148 WERE ISSUED EITHER AT THE INSTANCE OF SUCH COMPANIES DIVULGING A PALTRY E SCAPEMENT OF INCOME OR OTHERWISE ; ASSESSMENT ORDERS WERE PASSED U/S 1 43(3) READ WITH SECTION 147 AFTER MAKING NOMINAL ADDITIONS AND THE AOS, DURING THE COURSE OF SUCH ASSESSMENT PROCEEDINGS, MADE SOME FO RMAL ENQUIRIES ITA NO.1672/KOL/13 & 175/KOL/15 3 ABOUT SHARES ISSUED BY SUCH COMPANIES AT HUGE PREMI UM BY ISSUING NOTICES U/S 133(6) TO SOME OF THE SHAREHOLDERS AND GETTING SATISFIED WITHOUT ANY FURTHER INVESTIGATION. THE JURISDICTION AL CITS HAVE PASSED ORDERS U/S 263 IN ALL SUCH CASES, WHICH HAVE BEEN A SSAILED BEFORE THE TRIBUNAL. 3. THE LD. AR OF M/S BLACKBERRY VYAPAR (ITA NO . 1672/K/2013) HAS ADMITTED THAT THE FACTS AND CIRCUMSTANCES OF HIS CA SE ARE SIMILAR TO SUBHLAKSHMI VANIJYA PVT. LTD. VS. CIT (ITA NO.1104 /KOL/2014) DATED 30.7.2015 4. THE ASSESSEE IN ACCURATE AGENCY PRIVATE LIMI TED (IN ITA NO. 175/K/2015) HAS FILED APPLICATION FOR ADMISSION OF THE FOLLOWING ADDITIONAL GROUNDS, WHICH READ AS UNDER:- I. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ORDER U/S 263 OF I.T. ACT IS BARRED BY LIMITATION AND AS SUCH VOI D-AB-INITIO II. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE ENTIRE PROCEEDINGS U/S 263 IS VOID AB INITIO SINCE THE PR INCIPLES OF NATURAL ITA NO.1672/KOL/13 & 175/KOL/15 4 JUSTICE WAS NOT FOLLOWED AS NO NOTICE U/S 263 OF TH E ACT WAS SERVED ON THE APPELLANT. THE ALLEGED AFFIXATION OF NOTICE DOE S NOT SATISFY THE PROVISIONS OF CODE OF CIVIL PROCEDURE 1908 AS IT AP PEARS FROM THE RECORDS THAT THE ALLEGED AFFIXATION WAS DONE AT THE WRONG ADDRESS, AN ADDRESS WHICH WAS NEVER ASSOCIATED WITH THE APPELLA NT COMPANY EVER SINCE ITS INCEPTION. SINCE NO NOTICE U/S 263 WAS SE RVED ON THE APPELLANT, THE ENTIRE ORDER U/S 263 IS ILLEGAL AND LIABLE TO B E QUASHED. III. FOR THAT IN THE FACTS AND CIRCUMSTANCE OF THE CASE, REVISIONARY POWER CANNOT BE EXERCISED U/S 263 OF THE ACTON A DEBATABL E ISSUE WHEN TWO VIEWS ARE POSSIBLE. IV. FOR THAT IN THE FACTS AND CIRCUMSTANCES OF THE CASE, THE LD. CIT HAS PASSED AN ORDER ON THE BASIS OF SURMISES, CONJECTUR ES, PRE-CONCEIVED NOTION AND SUSPICION. 5. THE LD. AR ARGUED THAT THESE GROUNDS WERE O MITTED TO BE TAKEN IN THE MEMORANDUM OF APPEAL. HE STATED THAT SINCE THE SE GROUNDS INVOLVE SUBSTANTIAL QUESTIONS OF LAW, THE SAME BE ADMITTED. THE LD. DR DID NOT ITA NO.1672/KOL/13 & 175/KOL/15 5 RAISE ANY SERIOUS OBJECTION TO THE ADMISSION OF THE ABOVE ADDITIONAL GROUNDS. 6. AFTER CONSIDERING THE SUBMISSIONS FROM BOTH T HE SIDES, WE ARE SATISFIED THAT THE ABOVE GROUNDS DEAL ONLY WITH THE QUESTIONS OF LAW ARISING FROM THE FACTS ON RECORD. FOLLOWING THE JUD GMENT OF THE HONBLE SUPREME COURT IN NATIONAL THERMAL POWER COMPANY LIMITED VS. CIT (1998) 229 ITR 383 (SC) , WE ADMIT THE ABOVE GROUNDS FOR DISPOSAL ON MERITS. 7. INSOFAR AS THE MERITS OF THE ABOVE ADDITIONA L GROUNDS ARE CONCERNED, THE LD. AR WAS FAIR ENOUGH TO CONCEDE THAT SIMILAR GROUNDS HAVE BEEN DECIDED BY THE TRIBUNAL AGAINST THE ASSESSEE IN ITS LEAD ORDER PASSED IN SUBHLAKSHMI VANIJYA PVT. LTD.& ORS. (SUPRA) . IN FACT, NO SEPARATE ARGUMENTS WERE ADVANCED IN SUPPORT OF SUCH GROUNDS BY CONTENDING THAT THE FACTS ARE SIMILAR TO THOSE ALREADY CONSIDERED A ND DECIDED BY THE TRIBUNAL IN THE ABOVE REFERRED CASE AND HE WAS RAIS ING THESE GROUNDS FOR KEEPING THE MATTER ALIVE BEFORE THE HONBLE HIGH CO URT. IN VIEW OF THE ITA NO.1672/KOL/13 & 175/KOL/15 6 ABOVE SUBMISSIONS, WE DISMISS THESE ADDITIONAL GROU NDS OF APPEAL. 8. QUA THE GROUNDS TAKEN UP IN THE MEMORANDUM OF TH E APPEALS, WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RE LEVANT MATERIAL ON RECORD. IT IS RELEVANT TO MENTION THAT WE HAVE DISP OSED OF MORE THAN 500 CASES INVOLVING SAME ISSUE THROUGH CERTAIN ORDERS W ITH THE MAIN ORDER HAVING BEEN PASSED IN A GROUP OF CASES LED BY SUBHLAKSHMI VANIJYA PVT. LTD. VS. CIT (ITA NO.1104/KOL/2014) DATED 30.7.201 5 FOR THE A.Y. 2009-10. 9. BOTH THE SIDES HAVE FAIRLY ADMITTED THAT FACT S 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 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. ITA NO.1672/KOL/13 & 175/KOL/15 7 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 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 ITA NO.1672/KOL/13 & 175/KOL/15 8 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. 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. ITA NO.1672/KOL/13 & 175/KOL/15 9 10. IT IS NOTICED THAT ALL OR SOME OF THE ABOVE C ONCLUSIONS ARE APPLICABLE TO THE INSTANT APPEALS. IN VIEW OF THE FOREGOING D ISCUSSION AND FOLLOWING THE VIEW TAKEN IN SUBHLAKSHMI VANIJYA PVT. LTD. (SUPRA) , WE UPHOLD BOTH THE IMPUGNED ORDERS. 11. IN THE RESULT, BOTH THE APPEALS ARE DISMISSE D. THE ORDER PRONOUNCED IN THE OPEN COURT ON 05.11.20 15. SD/- SD/- [N.V. VASUDEVAN] [R.S. SYAL] JUDICIAL MEMBER ACCOUNTANT MEMBER DATED, 5 TH NOVEMBER, 2015. RG COPY FORWARDED TO: APPELLANT RESPONDENT CIT CIT (A) DR, ITAT AR, ITAT, KOLKATA ITA NO.1672/KOL/13 & 175/KOL/15 10