Laurel Construction Pvt Ltd, Kolkata V. C.I.T.Kolkata - II, Kolkata

ITA 1819/KOL/2013

• Counselvise Citation: 181923514 RSA 2013
• Duration Of Justice: 2 year(s) 4 month(s) 29 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 06-11-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 07-06-2013
• Court: TRIBUNAL
• Department Lawyers: S SRIVASTAVA
• Keywords: Period of limitation; Time period of passing order
• Section: 143(3); 133(6); 147; 68; 148; 263

Judgement Text

ITA NO.1819/KOL/2013 1 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES :D : KOLKATA BEFORE SHRI R.S. SYAL, AM & SHRI N.V. VASUDEVAN, JM ITA NO.1819/KOL/2013 ASSESSMENT YEAR:2008-09 LAUREL CONSTRUCTION PVT. LTD., 9/12, LALBAZAR STREET, MERCANTILE BUILDING; 3 RD FLOOR, BLOCK-B, ROOM NO.10, KOLKATA-700001. PAN : AABCL 4345 D VS. COMMISSIONER OF INCOME TAX, KOLKATA-II, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. (APPELLANT) (RESPONDENT) ASSESSEE BY : NONE DEPARTMENT BY : S.SRIVASTAVA, CIT DR DATE OF HEARING : 6.11.2015 DATE OF PRONOUNCEMENT : 06.11.2015 ORDER PER BENCH THROUGH THIS APPEAL, THE ASSESSEE ASSAILS THE CORRE CTNESS OF THE ORDER PASSED BY THE COMMISSIONERS OF INCOME-TAX (CI T) ON 28.3.2013 U/S 263 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER AL SO CALLED THE ACT) IN RELATION TO THE ASSESSMENT YEAR 2008-09. ITA NO.1819/KOL/2013 2 2. BRIEFLY STATED, THE FACTS OF THE CASE ARE TH AT THE RETURN WAS FILED BY THE ASSESSEE WITH INCOME OF RS.1,180; INTIMATION WA S ISSUED U/S 143(1); THEREAFTER THE ASSESSEE WROTE A LETTER TO THE AO I NTIMATING THAT COMMISSION INCOME OF RS.24,000 WAS OMITTED TO BE IN CLUDED; THE AO ISSUED NOTICE U/S 148; ASSESSMENT ORDER WAS PASSED U/S 143(3) READ WITH SECTION 147 AFTER MAKING NOMINAL DISALLOWANCE OF PR ELIMINARY EXPENSES AND COMMISSION INCOME; AND THE AO, DURING THE COUR SE OF SUCH ASSESSMENT PROCEEDINGS, MADE SOME FORMAL ENQUIRIES ABOUT SHARES ISSUED BY THE ASSESSEE COMPANY AT HUGE PREMIUM BY I SSUING NOTICES U/S 133(6) TO SOME OF THE SHAREHOLDERS AND GETTING SATI SFIED WITHOUT ANY FURTHER INVESTIGATION. THE JURISDICTIONAL CIT HAS P ASSED ORDER U/S 263 IN THIS CASE, WHICH HAS BEEN ASSAILED BEFORE THE TRIBU NAL. 3. WE HAVE HEARD THE LD. DR AND PERUSED THE RELEVAN T MATERIAL ON RECORD. WE HAVE ALSO TAKEN INTO CONSIDERATION THE W RITTEN SUBMISSIONS FILED ON BEHALF OF THE ASSESSEE. IT IS RELEVANT TO MENTION THAT WE HAVE DISPOSED OF MORE THAN 500 CASES INVOLVING SAME ISSU ES THROUGH CERTAIN ORDERS WITH THE MAIN ORDER HAVING BEEN PASSED IN A GROUP OF CASES LED BY ITA NO.1819/KOL/2013 3 SUBHLAKSHMI VANIJYA PVT. LTD. VS. CIT (ITA NO.1104 /KOL/2014) DATED 30.7.2015 FOR THE A.Y. 2009-10. 4. THE LD. DR SUBMITTED THAT FACTS AND CIRCUMSTA NCES OF THE INSTANT CASE 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. 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 ; ITA NO.1819/KOL/2013 4 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 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. ITA NO.1819/KOL/2013 5 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. 5. WE FIND FROM THE WRITTEN SUBMISSION THAT THE ASSESSEE HAS TRIED TO DISTINGUISH HIS CASE WITH THE FOLLOWING REASONS : - A. JURISDICTION DID NOT LIE WITH THE CIT, WHO HAS PASS ED THE IMPUGNED ORDER. B. EXPLANATION 3 TO SECTION 147 DOES NOT APPLY IN THE CIRCUMSTANCES AS ARE PREVAILING IN THIS CASE. C. NOTICE U/S 148 WAS SENT AT A WRONG ADDRESS. ITA NO.1819/KOL/2013 6 6. THE LD. DR COUNTERED THE SAME BY CONTENDING T HAT ALL THE ABOVE ARGUMENTS HAVE BEEN DEALT WITH BY THE TRIBUNAL IN T HE LEAD ORDER IN SUBHLAKSHMI VANIJYA PVT. LTD. & ORS. (SUPRA). WE ARE AGREEABLE WITH THE LD. DR THAT THERE IS NO FRESH ARGUMENT RAISED B Y THE ASSESSEE IN ITS WRITTEN SUBMISSIONS. IN FACT, ALL THE ABOVE POINTS HAVE BEEN ELABORATELY DEALT WITH IN THE LEAD ORDER. 7. IT IS NOTICED THAT SOME OF THE CONCLUSIONS DRA WN IN THE LEAD ORDER ARE APPLICABLE TO THE INSTANT APPEAL. IN VIEW OF THE FO REGOING DISCUSSION AND FOLLOWING THE VIEW TAKEN IN SUBHLAKSHMI VANIJYA PVT. LTD. (SUPRA) , WE UPHOLD THE IMPUGNED ORDER. 8. IN THE RESULT, THE APPEAL IS DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 06.11.20 15. SD/- SD/- [R.S. SYAL] [N.V. VASUDEVAN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 6 T H NOVEMBER, 2015. RG ITA NO.1819/KOL/2013 7 COPY FORWARDED TO: APPELLANT RESPONDENT CIT CIT (A) DR, ITAT AR, ITAT, KOLKATA ITA NO.1819/KOL/2013 8