M/s Jeevan Commotrade Pvt. Ltd., Kolkata V. CIT-II, KOLKATA, Kolkata

ITA 949/KOL/2014

• Counselvise Citation: [2015] 140 COUNSELVISE.COM (IT) 99943 (ITAT-KOLKATA)
• Duration Of Justice: 1 year(s) 5 month(s) 17 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 30-10-2015
• Appeal Filed By: Assessee
• Bench Allotted: A
• Assessment Year: 2009-2010
• Appeal Filed On: 13-05-2014
• Court: TRIBUNAL
• Department Lawyers: NIRAJ KUMAR
• Keywords: Period of limitation; Question of law; Time period of passing order
• Section: 143(3); 133(6); 147; 68; 148; 263

Judgement Text

1 ITA NO.949/KOL/2014 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES : D : KOLKATA BEFORE SHRI R.S. SYAL, AM & SHRI N.V. VASUDEVAN, JM ITA NO.949/KOL/2014 ASSESSMENT YEAR:2009-10 M/S.JEEVAN COMMOTRADE PVT.LTD., 4, FAIRLY PLACE, 5 TH FLOOR, KOLKATA-700001. PAN : AACCJ 0069K VS. COMMISSIONER OF INCOME TAX, KOLKATA-III, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ASSESSEE BY : MR.SUBHASH AGARWAL, ADVOCATE DEPARTMENT BY : SHRI NIRAJ KUMAR, CIT, DR. DATE OF HEARING : 29.10.2015 DATE OF PRONOUNCEMENT : 30.10.2015 ORDER THROUGH THIS APPEAL, THE ASSESSEES ASSAILS THE COR RECTNESS OF THE ORDER PASSED BY THE COMMISSIONERS OF INCOME-TAX (CI T) U/S 263 OF THE INCOME-TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) IN RELATION TO THE CAPTIONED ASSESSMENT YEAR. 2 ITA NO.949/KOL/2014 2. BRIEFLY STATED THE FACTS OF THE CASE ARE THAT THE ASSESSEE FILED RETURN WITH MEAGRE INCOME; INTIMATION WAS ISSUED U/S 143( 1); THEREAFTER NOTICE U/S 148 WAS ISSUED DIVULGING A PALTRY ESCAPEMENT OF INCOME ; ASSESSMENT ORDER WERE PASSED U/S 143(3) READ WITH S ECTION 147 AFTER MAKING NOMINAL ADDITION 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 WHICH HAS BEEN ASSAILED BEFORE THE TRIBUNAL. 3. THE LD. AR HAS FILED APPLICATION FOR ADMISSI ON OF ADDITIONAL GROUNDS, WHICH READS AS UNDER:- (I) `FOR THAT THE ORDER PASSED U/S 263 BY THE LD. CIT I S BARRED BY LIMITATION, AS SUCH, THE ORDER PASSED U/S 263 IS LIABLE TO BE QUASHED. 3 ITA NO.949/KOL/2014 (II) FOR THAT THE ORDER PASSED U/S 263 BY THE LD. CIT IS LIABLE TO BE QUASHED IN THE ABSENCE OF PROPER SERVICE OF NOTI CE TO THE ASSESSEE. 4. THE LD. AR ARGUED THAT THESE GROUNDS WERE OM ITTED TO BE TAKEN IN THE MEMORANDUM OF THE CONCERNED APPEALS. HE STATED THAT SINCE THESE GROUNDS INVOLVE SUBSTANTIAL QUESTION OF LAW, THE SA ME BE ADMITTED. THE LD. DR DID NOT RAISE ANY SERIOUS OBJECTION TO THE A DMISSION OF THE ABOVE ADDITIONAL GROUNDS. 5. 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. 6. INSOFAR AS THE MERITS OF THE ABOVE ADDITIONA L GROUNDS ARE CONCERNED, 4 ITA NO.949/KOL/2014 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. (INFRA) . IN FACT, NO SEPARATE ARGUMENTS WERE ADVANCED IN SUPPORT OF SUCH GROUNDS BY CONTEND ING THAT THE FACTS ARE SIMILAR TO THOSE ALREADY CONSIDERED AND DECIDED BY THE TRIBUNAL IN THE ABOVE REFERRED CASE AND HE WAS RAISING THESE GROUND S FOR KEEPING THE MATTER ALIVE BEFORE THE HONBLE HIGH COURT. IN VIE W OF THE ABOVE SUBMISSIONS, WE DISMISS THESE ADDITIONAL GROUNDS OF APPEAL. 7. QUA THE GROUNDS TAKEN UP IN THE MEMORANDUM OF RE SPECTIVE APPEALS, WE HAVE HEARD THE RIVAL SUBMISSIONS AND PE RUSED 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 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. 5 ITA NO.949/KOL/2014 8. 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. 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 ; 6 ITA NO.949/KOL/2014 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. 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 7 ITA NO.949/KOL/2014 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. 9. IT IS NOTICED THAT SOME OF THE ABOVE CONCLUSIO NS ARE APPLICABLE TO THE APPEAL UNDER CONSIDERATION. IN VIEW OF THE FOREGOIN G DISCUSSION AND FOLLOWING THE VIEW TAKEN IN SUBHLAKSHMI VANIJYA PVT. LTD. (SUPRA) , WE UPHOLD THE IMPUGNED ORDER. 10. IN THE RESULT, THE APPEAL IS 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 8 ITA NO.949/KOL/2014 COPY FORWARDED TO: APPELLANT RESPONDENT CIT CIT (A) DR, ITAT AR, ITAT, KOLKATA 9 ITA NO.949/KOL/2014