M/s PBN Construction Pvt. Ltd., Siliguri V. PCIT, SILIGURI, Siliguri

ITA 754/KOL/2016

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 4735 (ITAT-KOLKATA)
• Duration Of Justice: 3 month(s) 21 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 12-08-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Assessment Year: 2011-2012
• Appeal Filed On: 21-04-2016
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Keywords: Business income; Opportunity of being heard; Procedural lapse; Condonation of delay
• Section: 143(3); 142(1); 263; 28

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL D BENCH : KOLKATA [BEFORE HONBLE SHRI P.M.JAGTAP, AM & SRI N.V.VA SUDEVAN, JM ] I.T.A NO. 754/KOL/201 6 ASSESSMENT YEAR : 2011-1 2 M/S. PBN CONSTRUCTION (P) LTD. -VS.- PR.C .I.T.- SILIGURI SILIGURI [PAN : AAECP 4743 L] (APPELLANT) (RESPONDENT) FOR THE APPELLANT : SHRI SUBASH AGARWA L, ADVOCATE FOR THE RESPONDENT : SHRI NIRAJ KUMAR, CIT DATE OF HEARING : 08.08.2016. DATE OF PRONOUNCEMENT : 12.08.2016. ORDER PER N.V.VASUDEVAN, JM THIS IS AN APPEAL BY THE ASSESSEE AGAINST THE ORDER DATED 18.01.2016 OF PR.CIT- SILIGURI PASSED U/S 263 OF THE INCOME TAX ACT, 196 1 (ACT) RELATING TO AY 2010-11. 2. THE ASSESSEE IS A COMPANY. IT IS ENGAGED IN THE BUSINESS OF STEEL FABRICATION, CONSTRUCTION, CARRYING ON CONTRACT AND ENGINEERING WORKS. FOR A.Y.2011-12 THE ASSESSEE FILED RETURN OF INCOME ON 01.11.2011 DECLARING TOTA L INCOME OF RS.85,89,700/-. THE ASSESSMENT WAS COMPLETED BY THE AO BY AN ORDER DATE D 28.03.2014 PASSED U/S.143(3) OF THE ACT, DETERMINING THE TOTAL INCOME OF THE ASSES SEE AS FOLLOWS :- ON THE FOREGOING DISCUSSION THE TOTAL INCOME OF TH E ASSESSEE IS ASSESSED AS BELOW :- RETURNED INCOME : RS.85,89,700/- ADD : AS PER PARA NO.4.1(A) : RS.42,37,120/- ADD : AS PER PARA NO.4.1(B) : RS.23,17,264/- ADD: AS PER PARA NO.5 : RS. 51,632/- TOTAL INCOME : RS.1,59,57,716/-. 2 ITA NO.754/KOL/2016 M/S. PBN CONSTRUCTION (P)LTD. A.YR.2011-12 2 3. THE C.I.T. IN EXERCISE OF HIS POWERS U/S 263 OF THE ACT WAS OF THE VIEW THAT THE AFORESAID ORDER OF THE AO WAS ERRONEOUS AND PREJUDI CIAL TO THE INTEREST OF THE REVENUE FOR THE FOLLOWING REASONS :- L. FOR THE A.Y. 2011-12, SHARE APPLICATION MONEY WA S INCREASED FROM RS. 26.50 LAKH TO RS. 194.48 LAKH THE DETAILS OF WHICH WAS NOT SUBMIT TED. 2. IN THE A.Y. 2010-11 THE PROFIT WAS DISCLOSED RS. 48.23 LAKH AGAINST THE TURNOVER OF RS.9.99 CRORE. HOWEVER, IN THE A.Y. 2011-12, THE-NE T PROFIT DISCLOSED IS ONLY RS. 49.82 LAKH AGAINST THE TURNOVER OF RS. 20.61 CRORE. NO SU BMISSION OR EXPLANATION REGARDING FALL OF NET PROFIT RATIO COMPARED TO TURNOVER WAS PROVID ED. 3. IT WAS ALSO SEEN THAN GP FROM SALES OF FABRICATE D ITEMS IS FOUND TO BE AROUND 26% OF TOTAL SALES OF RS. 8.92 CRORE COMPARED TO LAST YEAR 'S GP OF AROUND 33% ON TOTAL SALES OF RS. 9.52 CRORE. THE REASONS FOR FALL IN GROSS PROFI T IS NOT PROVIDED. 4. ANOMALIES AND GROSS DIVERGENCES IN EXPENSES CLAI MED HAVE NOT BEEN VERIFIED DURING THE SCRUTINY PROCEEDINGS. SOME EXAMPLES OF SUCH EXPENSE S ARE : (I) VEHICLE RUNNING & MAINTENANCE EXPENSE OF RS. 2.85 CRORE (II) TRANSPOR TATION & FREIGHT CHARGES OF RS. 37.36 LAKH (III) REPAIR AND MAINTENANCE EXPENSES OF RS. 9 2.95 LAKH COMPARED TO RS. 9.72 LAKH IN THE PRECEDING YEAR (IV) SALARY EXPENSES OF RS, 146. 62 LAKH COMPARED TO RS. 18.88 LAKH (V) MESS EXPENSES OF RS. 22.54 LAKH COMPARED TO RS. 1.1 7 IN THE PRECEDING YEAR LAKH LAST YEAR ETC. 4. ACCORDINGLY THE CIT ISSUED A SHOW CAUSE NOTICE U/S 263 OF THE ACT DATED 10.04.2015 CALLING UPON THE ASSESSEE TO SHOW CAUSE AS TO WHY T HE ORDER DATED 28.3.2014 SHOULD NOT BE REVISED U/S.263 OF THE ACT. 5. THE ASSESSEE VIDE ITS REPLY DATED 14.01.2016 POINTED OUT THAT THE AO MADE THE REQUIRED ENQUIRIES BEFORE CONCLUDING THE ASSESSMENT AND IT CANNOT BE SAID THAT THE ORDER OF THE AO IS ERRONEOUS AND PREJUDICIAL TO THE INTER EST OF THE REVENUE FOR THE FAILURE ON THE PART OF AO TO MAKE PROPER ENQUIRIES ON THE ISSU ES SET OUT IN THE SHOW CAUSE NOTICE. 6. THE CIT HOWEVER CONCLUDED THAT THE AO DID NOT A PPLY HIS MIND TO THE ISSUES SET OUT IN THE SHOW CAUSE NOTICE AND DID NOT CONDUCT PROPER ENQUIRY ON THOSE ISSUES BEFORE CONCLUDING THE ASSESSMENT. IN THIS REGARD THE CIT A LSO CONCLUDED THAT THE ORDER SHEET ENTRIES OF THE AO BEFORE CONCLUDING THE ASSESSMENT DID NOT SHOW APPLICATION OF MIND ON 3 ITA NO.754/KOL/2016 M/S. PBN CONSTRUCTION (P)LTD. A.YR.2011-12 3 THE PART OF THE AO. THEREAFTER THE CIT AFTER REFERR ING TO CERTAIN JUDICIAL PRONOUNCEMENTS, CONCLUDED AS FOLLOWS :- THE ASSESSING OFFICER HAS MISERABLY FAILED TO COND UCT PROPER ENQUIRY NECESSARY FOR MAKING ASSESSMENT. THERE IS A CLEAR NON APPLICATIO N OF MIND ON THE PART OF ASSESSING OFFICER IN MAKING THE ASSESSMENT. THE ASSESSEE COULD NOT REBUTT THE RATIO OF JUDGMENT ON WHICH THE REPLY WAS ASKED AND ALSO ON THE POINTS MENTIONED IN THE NOTICE U/S 263. IN V IEW OF THE ABOVE FACTS AND THE RATIO OF JUDGMENTS CITED ABOVE THE ASSESSMENT ORDER IS ERRON EOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE, HENCE IT IS CANCELLED. THE AO SHOULD PASS A DENOVO ASSESSMENT ORDER BY MAKING PROPER ENQUIRY INCLUDING ON ALL THE POINTS MENTIONE D IN THE NOTICE U/S 263. ADDITION OF RS. 42,37,120/-, AS PER PARA NO. 4.1(A), OF RS. 23, 17,264/- AS PER PARA NO. 4.1(B) AND OF RS. 51,632/- AS PER PARA NO. 5 ALREADY MADE BY AO I N THE ASSESSMENT ORDER DT. 28.03.2014 WILL REMAIN IN THE FRESH ASSESSMENT ORDER. PROPER O PPORTUNITY OF BEING HEARD SHOULD BE GIVEN TO THE ASSESSEE. 7. AGGRIEVED BY THE ORDER OF CIT THE ASSESSEE HAS PREFERRED THE PRESENT APPEAL BEFORE THE TRIBUNAL. 8. THE APPEAL BEFORE THE TRIBUNAL HAS BEEN FILED BELATEDLY BY 27 DAYS. IN AN APPLICATION FOR CONDONATION OF DELAY, THE REASON FO R THE DELAY HAVE BEEN STATED BY THE ASSESSEE AS DUE TO THE ABSENCE OF SHRI.ANIL KUMAR A GARWALA, DIRECTOR OF THE ASSESSEE, WHO WAS LOOKING AFTER THE TAX MATTER. IT HAS BEEN M ENTIONED THAT SHRI ANIL KUMAR AGARWALA HAD TO GO OUT OF STATION FROM 28.01.2016 F OR SOME URGENT BUSINESS PURPOSE AND HAD TO REMAIN OUT OF STATION FOR THE PERIOD BET WEEN 28.01.2016 TO 07.04.2016. IT APPEARS THAT AFTER THE RETURN OF SHRI ANIL KUMAR AG ARWALA TO KOLKATA ON 08.04.2016 HE WENT AND MET HIS ADVOCATE SHRI SUBASH AGARWAL, WHO FILED THE APPEAL OF THE IMPUGNED YEAR BEFORE THE TRIBUNAL. THE ADVOCATE PREPARED THE APPEAL AND AFTER SIGNING THE SAME WAS FILED IN THE REGISTRY ON 21.04.2016. THE DELAY OF 27 DAYS IN FILING THE APPEAL HAS BEEN EXPLAINED THUS. SHRI ANIL KUMAR AGARWALA, MAN AGING DIRECTOR OF THE ASSESSEE HAS SWORN TO AN AFFIDAVIT MENTIONING ALL THE ABOVE FACT S. THE LD. DR OPPOSED THE PRAYER OF THE ASSESSEE FOR CONDONATION OF DELAY. ACCORDING TO HIM THE REASONS GIVEN BY THE ASSESSEE FOR CONDONATION OF DELAY CANNOT BE REGARDE D AS REASONABLE AND SUFFICIENT CAUSE FOR THE DELAY IN FILING THE APPEAL. 4 ITA NO.754/KOL/2016 M/S. PBN CONSTRUCTION (P)LTD. A.YR.2011-12 4 9. AFTER CONSIDERING THE RIVAL SUBMISSIONS WE ARE OF THE VIEW THAT THOUGH THE REASONS GIVEN IN THE AFFIDAVIT FOR CONDONATION OF DELAY ARE VAGUE, YET IN THE INTEREST OF JUSTICE AND KEEPING IN MIND THE FACT THAT THE TAX LIABILITY OF THE ASSESSEE HAS TO BE DETERMINED IN ACCORDANCE WITH LAW AND ALSO KEEPING IN MIND THE PR INCIPLE THAT SUBSTANTIVE JUSTICE MUST BE RENDERED AND THE ASSESSEE SHOULD NOT BE DENIED T HE RIGHT OF ADJUDICATION OF HIS APPEAL ON TECHNICAL AND PROCEDURAL LAPSES, WE ACCEPT THE REASONS GIVEN BY THE ASSESSEE AS REASONABLE AND SUFFICIENT CAUSE FOR THE DELAY IN FI LING THE APPEAL. WE THEREFORE CONDONE THE DELAY IN FILING THE APPEAL. 10. AS FAR AS THE MERITS OF THE VARIOUS ISSUES R AISED BY THE CIT IN THE SHOW CAUSE NOTICE U/S 263 IS CONCERNED, WE ARE OF THE VIEW THA T IT IS NOT NECESSARY TO GO INTO THE MERITS OF THE SAID ISSUES. ULTIMATELY THE CIT HAS I NVOKED THE JURISDICTION U/S 263 OF THE ACT ON THE GROUND THAT THE AO FAILED TO MAKE NECESS ARY AND PROPER ENQUIRIES WHICH HE OUGHT TO HAVE MADE BEFORE CONCLUDING THE ASSESSMENT . THEREFORE IT IS ENOUGH FOR THE PURPOSE OF THE PRESENT APPEAL TO EXAMINE THE QUESTI ON AS TO WHETHER THE AO BEFORE CONCLUDING THE ASSESSMENT MADE ENQUIRIES WHICH OUGH T TO HAVE MADE IN THE GIVEN FACTS AND CIRCUMSTANCES OF THE CASE. 11. IN THIS REGARD THE FIRST ASPECT WHICH WE NOTIC E IS THE FACT THAT THE CASE OF THE ASSESSEE WAS TAKEN FOR SCRUTINY ASSESSMENT FOR THE FOLLOWING REASONS :- 2. THE CASE WAS SELECTED FOR SCRUTINY THROUGH CASS AS PER AIR INFORMATION THE A.O. WAS REQUIRED TO EXAMINE THE REASON FOR DIFFERENCE OF TD S AS PER 26AS AND TDS AS DECLARED IN ROI. SUBSEQUENTLY NOTICES U/S 143(2) & U/S 142(1) O F IT ACT61 WAS ISSUED AND SERVED UPON THE ASSESSEE. 12. THE RECORD OF PROCEEDINGS BEFORE THE AO FROM THE DATE THE CASE WAS SELECTED FOR SCRUTINY ASSESSMENT TILL THE CONCLUSION OF THE ASSE SSMENT WHICH IS IN THE FORM OF ORDER SHEET ENTRIES OF THE AO, WOULD SHOW THE NATURE OF E NQUIRY CONDUCTED BY THE AO BEFORE CONCLUDING THE ASSESSMENT PROCEEDINGS. THE ORDER S HEET ENTRIES OF THE AO SHOWS THAT ON 8.8.2012, THE CASE OF THE ASSESSEE HAS BEEN SELE CTED FOR SCRUTINY THROUGH CASS AND NOTICE U/S.143(2) OF THE ACT WAS ISSUED TO THE ASSE SSEE. ON 23.5.13, NOTICE U/S.142(1) OF THE ACT WAS ISSUED CALLING FOR BOOKS OF ACCOUNTS AND OTHER DOCUMENTS. IN ALL THERE 5 ITA NO.754/KOL/2016 M/S. PBN CONSTRUCTION (P)LTD. A.YR.2011-12 5 WERE ABOUT 16 HEARINGS BEFORE THE AO. A PERUSAL OF PARAGRAPH 4 OF THE ORDER OF ASSESSMENT SHOWS THAT THE AO HAD CALLED FOR BOOKS O F ACCOUNTS SUPPORTING BILLS, VOUCHERS, CASH BOOK, BANK STATEMENTS ETC. THE SAME WERE PRODUCED BY THE ASSESSEE AND TEST EXAMINED BY THE AO. IN RESPECT OF PURCHAS E OF GOODS AND SUNDRY CREDITORS THE ASSESSEE WAS ASKED TO FURNISH NAME AND ADDRESS OF T HE CONCERNS FROM WHO PURCHASES WERE MADE. NOTICES U/S.133(6) OF THE ACT WERE ISSU ED AND SERVED ON THE VARIOUS PARTIES TO VERIFY THE GENUINENESS OF PURCHASES AS SHOWN BY THE ASSESSEE AND THE REPLIES RECEIVED WERE CROSS VERIFIED WITH ASSESSEES BOOKS OF ACCOUNTS, LEDGER AND PAYMENTS VERIFIED THROUGH BANK STATEMENTS. THEREAFTER THE A O FOUND THAT THERE WAS NON- DEDUCTION OF TAX AT SOURCE IN RESPECT OF CERTAIN PA YMENTS WHICH RESULTED IN DISALLOWANCE OF EXPENSES U/S.40(A)(IA) OF THE ACT. UN-RECONCILE D DIFFERENCE IN LOAN AMOUNT WAS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. 13. IN ONE OF THE REPLY OF THE ASSESEE DATED 27.0 2.2014 TO QUERIES RAISED BY THE AO, THROWS LIGHT ON THE ENQUIRIES MADE BY THE AO AND TH E SAME IS AS FOLLOWS :- SUB : SUBMISSION DOCUMENTS AGAINST SCRUTINY ASSESS MENT FOR THE ASSET. YEAR 2011112 REF: HEARING DATE ON 27.02.2014 RESPECTED SIR, WITH REFERENCE TO YOUR REQUIREMENTS WE ARE SUBMITTI NG THE FOLLOWING INFORMATION . AGAINST SCRUTINY ASSESSMENT FOR THE. ASST, YEAR 2011-12 (AC COUNTING YEAR 2010-11) THE DETAILS OF' WHICH ARE AS UNDER : 1.WE ARE ENCLOSING HEREWITH A XEROX COPY OF THE BA LANCE SHEET OF RASHINOVYAPAAR PVT LTD. KOLKATA, WHO HAD TAKEN MADE INVESTMENTS TOWA RDS SHARE APPLICATION IN OUR COMPANY BY CHEQUES. THE INVESTMENTS HAVE DULY REFLE CTED IN THEIR BALANCE SHEET. THE INVESTMENT MAY PLEASE BE ACCEPTED IN VIEW OF THE R ATIO LAID DOWN BY THE HON'BLE SUPREME COURT IN LOVELY EXPORT'S CASE. PAN OF RASHI NO VYAPAAR PVT LTD. IS AADCR1939F 1.FOR HCC {PARE) LEDGER DIFFERENCE, WE ARE ENCLOSIN G HEREWITH RECONCILED .STATEMENT FOR YOUR READY REFERENCE. 2.FOR HCC ROAD, ASSAM LEDGER DIFFERENCE, WE ARE ENC LOSING HEREWITH RECONCILED STATEMENT FOR YOUR READY REFERENCE . 3. WE ARE ENCLOSING HEREWITH XEROX COPY OF INVOICE, BILL OF ENTRY, INSURANCE COPY & WAY BILL COPY OF MOTOR GRADERS PURCHASE FROM L& T L IMITED AS ADVISED BY YOU. 6 ITA NO.754/KOL/2016 M/S. PBN CONSTRUCTION (P)LTD. A.YR.2011-12 6 4. FOR THE BALANCE DIFFERENCE WITH KOTAK MAHINDRA F INANCE, WE ARE ENCLOSING THE PAYMENT SCHEDULE WHICH WAS PROVIDED TO US FROM THEI R END, WE ALSO LIKE TO INFORM YOU THAT THE. BALANCE THEY HAD .SEND TO YOU IS TOTALLY WRONG. IT IS PERTINENT TO MENTION HERE THAT ALL THE PAYMENTS WERE MADE THROUGH PREPAID BAN K CHEQUES WHICH HAD DULY BEEN EN- CASHED IN OUR ACCOUNT. 14. THEREAFTER THE ASSESSMENT WAS CONCLUDED BY T HE AO AND THE FOLLOWING WERE THE ORDER SHEET ENTRIES OF THE AO WHICH THROW LIGHT ON THE NATURE OF ENQUIRY CONDUCTED BY THE AO :- 14.3.14 REPLY RECEIVED FROM HINDUSTHAN CONSTRUCTIO N CORPORATION LTD., MUMBAI RECEIVED CLARIFYING THAT TOTAL TDS IN THE CASE OF P BN CONSTRUCTION DURING F/Y 2010-11 WAS RS.12,37,989/- IS PLACED ON RECORD. SD/- JCIT(R) 19.3.14 REPLY TO SHOW CAUSE NOTICE DATED 07/04/14 I S RECEIVED AND IS BEING EXAMINED AND CONSIDERED. SD/- JCIT 28.7.14 SANCTION FOR PROVISIONAL ATTACHMENT U/S 28 1B OF THE I.T.ACT IS RECEIVED FROM CIT. SD/- JCIT 28.3.14 ASSESSED U/S 143(3) OF THE I.T.ACT, 1961. I SSUE COPY OF D/N AND CHALLAN. INITIATE PENALTY PROCEEDINGS. 15. THE LEARNED COUNSEL FOR THE ASSESSEE SUBMITT ED BEFORE US THAT AS PER CBDT INSTRUCTIONS DATED 8.9.2010 WHICH WAS THE NORM APPL ICABLE FOR SELECTION OF CASES FOR SCRUTINY WHEN THE CASE OF THE ASSESSEE WAS PICKED U P FOR SCRUTINY, THE SCOPE OF SCRUTINY ASSESSMENTS IS LIMITED TO ONLY THAT ASPECT OF INFOR MATION RECEIVED THROUGH AIR. HE POINTED OUT THAT THE CASE OF THE ASSESSEE WAS PICKE D UP FOR SCRUTINY ONLY BASED ON AIR INFORMATION WHICH WAS WITH REFERENCE TO DIFFERENCE OF TDS AS PER 26AS AND TDS AS DECLARED IN THE RETURN OF INCOME BY THE ASSESSEE. ACCORDING TO HIM, THEREFORE THE AO COULD NOT GO INTO ANY OTHER ASPECT WHILE CONCLUDING THE ASSESSMENT, MORE SO, ON THE VARIOUS ISSUES POINTED OUT BY THE CIT IN THE IMPUGN ED ORDER U/S.263 OF THE ACT. IN SUPPORT OF HIS CONTENTION THAT THE SCOPE OF SCRUTIN Y ASSESSMENT PROCEEDINGS CANNOT BE ENLARGED BY THE AO CONTRARY TO THE CBDT INSTRUCTION REFERRED TO ABOVE, THE LEARNED COUNSEL FOR THE ASSESSEE RELIED ON THE DECISION OF THE DELHI ITAT IN THE CASE OF 7 ITA NO.754/KOL/2016 M/S. PBN CONSTRUCTION (P)LTD. A.YR.2011-12 7 SMT.SANTOSH YADAV VS. CIT IN ITA NO.1810/DEL/2012 O RDER DATED 18.1.2013 AND THE DECISION OF THE ITAT AMRITSAR IN THE CASE OF SMT.GU RUPREET KAUR VS. ITO IN ITA NO.87/(ASR.)/2016 ORDER DATED 24.3.2016. IN BOTH T HE AFORESAID DECISIONS, THE TRIBUNAL HAS TAKEN A VIEW THAT THE SCOPE OF SCRUTINY ASSESSM ENT CANNOT BE ENLARGED CONTRARY TO THE CBDT INSTRUCTIONS ON SCOPE OF SCRUTINY ASSESSME NT. 16. WE HAVE CONSIDERED THE SUBMISSION OF THE LEARN ED DR. THE RELEVANT PARAGRAPHS OF THE CBDT INSTRUCTION DATED 8.9.2010, READS AS FOLLO WS: REFERENCE IS INVITED TO BOARDS LETTER OF EVEN N UMBER DATED 23 RD MAY, 2007 REGARDING SCOPE OF ENQUIRY IN THE SCRUTINY CASES SE LECTED ONLY ON THE BASIS OF INFORMATION RECEIVED THROUGH THE AIR RETURNS. 2.THE ABOVE MENTIONED GUIDELINES HAVE BEEN RECONSID ERED BY THE BOARD AND IT HAS BEEN DECIDED THAT THE SCRUTINY OF SUCH ASES WOU LD BE LIMITED ONLY TO THE ASPECTS OF INFORMATION RECEIVED THROUGH AIR. HOWEV ER, A CASE MAY TAKEN UP FOR WIDER SCRUTINY WITH THE APPROVAL OF THE ADMINISTRAT IVE COMMISSIONER, WHERE IT IS FELT THAT APART FROM THE AIR INFORMATION THERE IS A POTENTIAL ESCAPEMENT OF INCOME MORE THAN RS.10 LACS.. 17. IT CAN BE SEEN FROM THE ABOVE INSTRUCTIONS OF THE CBDT THAT THE AO IS ALSO DUTY BOUND TO EXAMINE THAT APART FROM THE AIR INFORMATIO N, IF THERE IS POTENTIAL ESCAPEMENT INCOME MORE THAN RS.10 LACS. ON THE FACTS AND CIRC UMSTANCES OF THE PRESENT CASE, WE ARE OF THE VIEW THAT THE AO OUGHT TO HAVE MADE PROP ER AND ADEQUATE ENQUIRIES WITH REGARD TO ALL THE ASPECTS SET OUT IN THE SHOW CAUSE NOTICE U/S.263 OF THE ACT. THE ENQUIRY WITH REGARD TO THE RECEIPT OF SHARE CAPITAL BY THE ASSESSEE DURING THE PREVIOUS YEAR WAS INADEQUATE AND IN THE LIGHT OF THE DECISION OF THE ITAT KOLKATA BENCH IN THE CASE OF SUBHLAKSHMI VANIJYA (P) LTD., (2015) 124 DTR (KOL)( TRIB.) 249, THE ENQUIRY CANNOT BE SAID TO BE ADEQUATE AND PROPER. IN OUR VIEW THERE HAS BEEN FAILURE ON THE PART OF THE AO TO MAKE PROPER AND ADEQUATE ENQUIRIES ON THE ISSUES SET OUT BY THE ASSESSEE IN THE SHOW CAUSE NOTICE U/S 263 OF THE ACT. THE CIRCUMSTANCES POINTED OUT BY CIT IN THE SHOW CAUSE NOTICE CLEARLY WARRANT AN ENQUIRY BY THE AO B EFORE CONCLUDING THE ASSESSMENT ON THE VARIOUS ASPECT SET OUT IN THE SHOW CAUSE NOTICE OF THE CIT U/S 263 OF THE ACT. THERE 8 ITA NO.754/KOL/2016 M/S. PBN CONSTRUCTION (P)LTD. A.YR.2011-12 8 HAS BEEN A FAILURE ON THE PART OF AO TO MAKE NECESS ARY AND PROPER ENQUIRIES BEFORE CONCLUDING THE ASSESSMENT. IN THE GIVEN CIRCUMSTANC ES IT CANNOT BE SAID THAT THE INVOKING OF JURISDICTION BY CIT U/S 263 OF THE ACT WAS NOT JUSTIFIED. THE LD. COUNSEL FOR THE ASSESSEE HAS BEFORE US TRIED TO MAKE SUBMISSION S ON THE GROUND THAT REVISIONAL POWERS CANNOT BE EXERCISED ON THE GROUND THAT THE A O SHOULD HAVE GONE DEEPER INTO A PARTICULAR ISSUE OR SHOULD HAVE MADE ELABORATE DISC USSIONS. IN THIS REGARD THE LD. COUNSEL FOR THE ASSESSEE HAD PLACED RELIANCE ON THE DECISION OF CERTAIN JUDICIAL PRONOUNCEMENTS NAMELY : I) CIT VS :LEISURE WEAR EXPORTS LTD. 341 ITR 166 (DEL) II) CIT VS BUDHILAL HIRALAL RANA 125 TAXMAN 455 (GUJ.) 18. IN THESE DECISIONS IT WAS HELD THAT THERE WA S NO MATERIAL BROUGHT ON RECORD TO SHOW THAT THERE WAS AN ERROR OR OMISSION OR FAILURE ON T HE PART OF THE AO. IN OUR VIEW, IN THE PRESENT CASE, AS WE HAVE ALREADY OBSERVED, THE MATE RIAL ON RECORD SHOWS THAT THE AO FAILED TO MAKE NECESSARY ENQUIRIES ON THE ISSUES SE T OUT IN THE SHOW CAUSE NOTICE U/S 263 OF THE ACT. ANOTHER ARGUMENT OF THE LD. COUNSEL PRO CEEDED ON THE BASIS THAT THERE IS A DIFFERENCE BETWEEN THE LACK OF ENQUIRY AND INADEQUA TE ENQUIRY. IT WAS SUBMITTED THAT IT IS ONLY IN THE CASE OF LACK OF ENQUIRY THAT JURISDI CTION U/S 263 OF THE ACT COULD BE INVOKED AND NOT IN A CASE OF WHERE THE CIT FEELS TH AT THE ENQUIRY MADE BY THE AO WAS INADEQUATE. IN THIS REGARD RELIANCE WAS PLACED BY T HE LD. COUNSEL ON THE DECISION OF THE HONBLE DELHI HIGH COURT IN THE CASE OF CIT VS SUNB EAM AUTO LTD. 332 ITR 167 (DELHI). WE HOWEVER FIND THAT THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF MAITHAN INTERNATIONAL 375 ITR 128 (CAL) HAS HOWEVER TAKEN A VIEW THAT JURISDICTION U/S 263 OF THE ACT COULD BE INVOKED WHEN THE AO FAILS TO MAKE AN ENQUIRY WHICH HE OUGHT TO HAVE MADE IN THE GIVEN FACTS AND CIRCUMSTANCES OF A CASE . WE ARE THEREFORE UNABLE TO ACCEPT THE PLEA OF THE LD. COUNSEL FOR THE ASSESSEE IN THI S REGARD. AS WE HAVE ALREADY MENTIONED, AT THIS STAGE THAT WE NEED NOT GO INTO T HE MERITS OF THE ISSUES RAISED BY THE CIT IN THE SHOW CAUSE NOTICE U/S 263 OF THE ACT BEC AUSE IN THE IMPUGNED ORDER THE AO 9 ITA NO.754/KOL/2016 M/S. PBN CONSTRUCTION (P)LTD. A.YR.2011-12 9 HAS ONLY BEEN DIRECTED TO EXAMINE THE ISSUES ON MER ITS AFTER AFFORDING THE ASSESSEE OPPORTUNITY OF BEING HEARD. IN THE GIVEN CIRCUMSTAN CES WE ARE OF THE VIEW THAT THE ASSESSEE IS AT LIBERTY TO PUT FORTH OF ITS CLAIMS O N THE MERITS OF THE ISSUES BEFORE THE AO IN THE ASSESSMENT PROCEEDINGS TO BE COMPLETED PURSU ANT TO THE IMPUGNED ORDER OF CIT. FOR THE REASONS GIVEN ABOVE WE UPHOLD THE ORDER OF CIT U/S 263 OF THE ACT AND DISMISS THE APPEAL OF THE ASSESSEE. 19. IN THE RESULT THE APPEAL BY THE ASSESSEE IS DISMISSED. ORDER PRONOUNCED IN THE COURT ON 12.08.2016. SD/- SD/- [P.M.JAGTAP] [ N.V.VASUDEVAN ] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED : 12.08.2016. [RG PS] COPY OF THE ORDER FORWARDED TO: 1.M/S. PBN CONSTRUCTION PVT. LTD. , PLOT NO.15A/4,5 & 7, INDUSTRIAL AREA, SEVOKE ROAD, SILIGURI-734001. 2. PR.C.I.T.-SILIGURI. 3. CIT(DR), KOLKATA BENCHES, KOLKATA. TRUE COPY BY ORDER ASSTT.REGISTRAR, ITAT, KOLKATA BENCHES 10 ITA NO.754/KOL/2016 M/S. PBN CONSTRUCTION (P)LTD. A.YR.2011-12 10