Rameshwar Commercial Pvt. Ltd., Kolkata V. THE CIT KOLKATA-II, Kolkata

ITA 522/KOL/2014

• Counselvise Citation: 52223514 RSA 2014
• Duration Of Justice: 1 year(s) 7 month(s) 5 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2008-2009
• Appeal Filed On: 25-03-2014
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Assessee Lawyers: A K TIBREWAL
• Keywords: Period of limitation; Block assessment; Time period of passing order
• Section: 143(3); 142(1); 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.522/KOL/2014 ASSESSMENT YEAR:2008-09 RAMESHWAR COMMERCIAL PVT. LTD., 38,NETAJI SUBHAS ROAD, 2 ND FLOOR, KOLKATA-700001. PAN : AADCR 7585 H VS. COMMISSIONER OF INCOME TAX, KOLKATA-II, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.1715/KOL/2013 ASSESSMENT YEAR:2008-09 JUPITER COMMODEAL PRIVATE LIMITED, 28, ARMENIAN STREET, 1 ST FLOOR, KOLKATA 700001. PAN : AABCJ 9652 R VS. COMMISSIONER OF INCOME TAX, KOLKATA-II, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.1375/KOL/2013 ASSESSMENT YEAR:2009-10 M/S YASHODA DEALERS PVT. LTD., 4/1, MIDDLETON STREET, 3 RD FLOOR, KOLKATA 700071. PAN : AAACY 3308 C VS. COMMISSIONER OF INCOME TAX, KOLKATA-III, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.1113/KOL/2013 2 ASSESSMENT YEAR:2009-10 M/S AVANEESH COMMOTRADE PVT. LTD., 4/1, MIDDLETON STREET, KOLKATA 700071. PAN : AAHCA 5519 JR VS. COMMISSIONER OF INCOME TAX, KOLKATA-III, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.1904/KOL/2 013 ASSESSMENT YEAR : 2009 -10 M/S. SATYAM FINANCIAL ADVISORY PVT. LTD., 33A, JAWAHARLAL NEHRU ROAD, ROOM NO.A4, 13 TH FLOOR, KOLKATA-700071 COMMISSIONER OF INCOME TAX, KOLKATA-I, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. (APPELLANT) (RESPONDENT) ASSESSEE BY : SHRI A.K.TIBREWAL, FCA DEPARTMENT BY : SHRI NIRAJ KUMAR, CIT DATE OF HEARING : 27.10.2015. DATE OF PRONOUNCEMENT :30.10.2015. ORDER PER BENCH 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, 196 1 (HEREINAFTER ALSO CALLED THE ACT) IN RELATION TO THE CAPTIONED ASSESSMENT YEARS. 3 SINCE ALL THESE APPEALS ARE BASED ON LARGELY SIMILA R FACTS AND COMMON GROUNDS OF APPEAL, WE ARE PROCEEDING TO DISPOSE THE M OFF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 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); THEREA FTER NOTICES U/S 148 WERE ISSUED EITHER AT THE INSTANCE OF SUCH COMPANIE S DIVULGING A PALTRY ESCAPEMENT OF INCOME OR OTHERWISE ; ASSESSM ENT ORDERS WERE PASSED U/S 143(3) READ WITH SECTION 147 AFTER MAKIN G NOMINAL ADDITIONS AND THE AOS, DURING THE COURSE OF SUCH AS SESSMENT PROCEEDINGS, MADE SOME FORMAL ENQUIRIES ABOUT SHARE S ISSUED BY SUCH COMPANIES AT HUGE PREMIUM BY ISSUING NOTICES U/S 13 3(6) TO SOME OF THE 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. WE HAVE HEARD THE RIVAL SUBMISSIONS AND PERUSED THE RELEVANT MATERIAL ON RECORD. IT IS RELEVANT TO MENTION THAT WE HAVE DISPOSED OF MORE THAN 400 CASES INVOLVING SAME ISSUE THROUGH CE RTAIN ORDERS WITH 4 THE MAIN ORDER HAVING BEEN PASSED IN A GROUP OF CAS ES LED BY SUBHLAKSHMI VANIJYA PVT. LTD. VS. CIT (ITA NO.1104 /KOL/2014) DATED 30.7.2015 FOR THE A.Y. 2009-10. 4. 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 CERTAIN ISSUES WHICH WE WILL ADVERT TO A LITTLE LATER. IN OUR AFORESAID ORDER IN SUBHLAKSHMI VANIJYA PVT. LTD., VS. CIT (ITA NO. 1104/KOL/2014 A.Y. 2009-10), WE HA VE 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 WITH OUT 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 ORDER U/S 263 COULD NOT HAVE DIRECTED THE AO TO DO SO, IS UNSUSTAINABLE. 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, NOTWITHSTANDING THE JURISDICTION OF THE AO IN MAKIN G ENQUIRIES ON THE ISSUES OR MATTERS AS HE CONSIDERS FIT IN 5 TERMS OF SECTION 142(1) AND 143(2) OF THE ACT, WHIC H 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 I SSUE 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 THE REBY 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 G IVE AN OPPORTUNITY OF HEARING TO THE ASSESSEE, WHICH HAS B EEN COMPLIED WITH 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 , WHICH IS NOT AN ORDER FOR THE PURPOSES OF SECTION 263. IN ALL T HE 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 TERRITORI AL JURISDICTION 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. 6 G. AFTER AMALGAMATION, NO ORDER CAN BE PASSED U/S 263 IN THE NAME OF THE AMALGAMATING COMPANY. BUT, WHERE THE IN TENTION OF THE ASSESSEE IS TO DEFRAUD THE REVENUE BY EITHER FI LING RETURNS, AFTER AMALGAMATION, IN THE OLD NAME OR OTHERWISE, T HEN THE 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 C ANNOT 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. IT IS NOTICED THAT ALL OR SOME OF THE ABOVE CO NCLUSIONS ARE APPLICABLE TO THE APPEALS IN THIS BATCH. 6. THE LD. AR RAISED FRESH TWIN OBJECTIONS ON THE APPLICABILITY OF SECTION 68 OF THE ACT. HIS FIRST OBJECTION WAS THAT SECTION 68 CAN BE TAKEN RECOURSE TO BY THE AO ALONE AND THE LD. CIT W AS NOT JUSTIFIED IN INVOKING IT IN THE REVISION PROCEEDINGS. WE DO NOT FIND ANY SUBSTANCE IN THE ARGUMENT. THE OBVIOUS REASON IS THAT THE LD. CIT, WHILE REVISING THE ASSESSMENT ORDER NOTICED THAT THE AO HAD NOT CO NSIDERED THE ISSUE 7 CORRECTLY IN THE CONTEXT OF SECTION 68, WHICH HE OU GHT TO HAVE. IT IS BUT NATURAL FOR CIT TO RESORT TO REVISION OF THE ASSESS MENT ORDER, IF ANY OF THE RELEVANT ISSUES OF THE ASSESSMENT ARE NOT PROPE RLY CONSIDERED BY THE AO, WHICH MANIFESTLY INCLUDE THE CORRECT APPLIC ATION OF SECTION 68. THE LD. CIT IN THE INSTANT CASE HAS RIGHTLY NO TICED THIS ASPECT OF THE MATTER, WHICH FALLS WITHIN HIS DOMAIN IN THE RE VISION PROCEEDINGS. ARGUING THAT THE CIT IN REVISION PROCEEDINGS U/S 26 3 CANNOT CONSIDER THE APPLICATION OF SECTION 68, AMOUNTS TO DENYING T HE AUTHORITY FROM DISCHARGING HIS STATUTORY OBLIGATION, WHICH HE IS L AWFULLY BOUND TO DO. THIS OBJECTION, THEREFORE, FAILS. 7. THE SECOND OBJECTION OF THE LD. AR WAS THAT THE PROVISO TO SECTION 68 CANNOT BE CONSIDERED AS RETROSPECTIVE IN VIEW OF SEVERAL JUDGMENTS INCLUDING CIT VS. VATIKA TOWNSHIP P. LTD. (2014) 367 ITR 466 (SC), IN WHICH THE LEVY OF SURCHARGE ON INCOME TAX IN CAS E OF BLOCK ASSESSMENT HAS BEEN HELD AS PROSPECTIVE. WE D O NOT FIND ANY SUBSTANCE IN THE ARGUMENT FOR TWO REASONS. FIRST RE ASON IS THAT THIS JUDGMENT DOES NOT DEAL WITH PROVISO TO SECTION 68 B UT WITH THE LEVY OF SURCHARGE ON INCOME TAX IN CASE OF BLOCK ASSESSMENT . THERE IS A LOT OF DIFFERENCE BETWEEN THE TWO PROVISIONS. THERE IS NO UNIVERSAL 8 UNIMPEACHED RULE THAT NO AMENDMENT CAN BE CONSTRUED AS RETROSPECTIVE. IT DEPENDS UPON THE NATURE OF PROVIS ION AND THE AMENDMENT AS TO WHETHER IT IS RETROSPECTIVE OR PROS PECTIVE. THE SECOND REASON FOR OUR NOT SOUNDING A CONCURRING NOT E TO THE ARGUMENT OF THE LD. AR IS THAT THIS ISSUE HAS ALREADY BEEN D ISCUSSED THREADBARE IN OUR ORDER IN SUBHLAKSHMI VANIJYA PVT. LTD. (SUPRA). RELEVANT DISCUSSION HAS BEEN MADE IN PARAS 13.U. TO 13.AE. A FTER MAKING AN ELABORATE ANALYSIS OF THE NATURE OF AMENDMENT, MEMO RANDUM EXPLAINING THE PROVISIONS OF THE FINANCE BILL, 2012 , AND LEGAL POSITION AS EMANATING FROM VARIOUS JUDGMENTS FROM THE HONBL E SUMMIT COURT GOVERNING THE RETROSPECTIVE OR PROSPECTIVE EFFECT O F AN AMENDMENT, IT HAS BEEN HELD THAT INSERTION OF PROVISO TO SECTION 68 IS RETROSPECTIVE. AS SUCH, THIS ARGUMENT, BEING DEVOID OF ANY MERIT, DESERVES TO MEET THE FATE OF DISMISSAL. WE ORDER ACCORDINGLY. 8. IN VIEW OF THE FOREGOING DISCUSSION AND FOLL OWING THE VIEW TAKEN IN SUBHLAKSHMI VANIJYA PVT. LTD. (SUPRA) , WE UPHOLD ALL THE IMPUGNED ORDERS. 9 9. IN THE RESULT, ALL THE APPEALS ARE DISMISSE D. 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 COPY FORWARDED TO: APPELLANT RESPONDENT CIT CIT (A) DR, ITAT TRUE COPY, BY ORDER, AR/ITAT KOLKATA BENCHES. 10