Morgan Vyapaar (P) Ltd, Kolkata V. C.I.T - I,kolkata, Kolkata

ITA 995/KOL/2013

• Counselvise Citation: [2016] 132 COUNSELVISE.COM (IT) 4703 (ITAT-KOLKATA)
• Duration Of Justice: 3 year(s) 1 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 01-06-2016
• Appeal Filed By: Assessee
• Bench Allotted: D
• Next Hearing Date: 24-05-2016
• Assessment Year: 2008-2009
• Appeal Filed On: 29-04-2013
• Court: TRIBUNAL
• Department Lawyers: S SRIVASTAVA
• Keywords: Opportunity of being heard; Period of limitation; Time period of passing order
• Section: 143(3); 142(1); 147; 68; 148; 263

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES :D : KOLKATA BEFORE SHRI P.M.JAGTAP, AM & SHRI N.V. VASUDEVAN, J M ITA NO. 995/KOL/2013 A.Y.2008-09 MORGAN VYAPAAR (P)LTD, BLOCK-A, 3 RD FLOOR, 9, LALBAZAR STREET, KOLKATA-700001. PAN AAECM 5308 C VS. COMMISSIONER OF INCOME TAX, KOLKATA-I, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. ITA NO.1111/KOL/2013 A.Y.200 8 - 09 M/S. HEAVEN TIE UP PVT. LTD., C-5/13, SAFDARJUNG DEVELOPMENT AREA, 1 ST FLOOR, NEAR SAINT ANTHONYS SCHOOL, NEW DELHI-110016. PAN AABCH 9132 L VS. COMMISSIONER OF INCOME TAX, KOLKATA-II, AAYAKARBHAWAN, P-7, CHOWRINGHEE SQUARE, KOLKATA 700 069. (APPELLANT) (RESPONDENT) ASSESSEE BY : S.M.SURANA, ADVOCATE IN ITA NO.995/K OL/2013 MR.SUJOY SEN, ADVOCATE IN ITA NO.1111/KOL/201 3 DEPARTMENT BY : S/SHRI S. SRIVASTAVA, CIT, DR. DATE OF HEARING :26.05.2016 DATE OF PRONOUNCEMENT 01.06.2016 ORDER PER N.V.VASUDEVAN, JM THROUGH THESE BATCH OF APPEALS, DIFFERENT ASSESSES ASSAIL THE CORRECTNESS OF SEPARATE ORDERS PASSED BY THE COMMISSIONERS OF INCO ME-TAX (CIT) U/S 263 OF THE INCOME- TAX ACT, 1961 (HEREINAFTER ALSO CALLED THE ACT) I N RELATION TO THE CAPTIONED ASSESSMENT YEARS. SINCE ALL THESE APPEALS ARE BASED ON LARGELY SIMILAR FACTS AND COMMON GROUNDS OF APPEAL, WE ARE PROCEEDING TO DISPOSE THEM OFF BY TH IS CONSOLIDATED ORDER FOR THE SAKE OF CONVENIENCE. 2. BRIEFLY STATED THE FACTS OF ALL THE APPEALS I N THIS BATCH ARE SIMILAR INASMUCH AS RETURNS WERE FILED BY SUCH COMPANIES WITH MEAGRE INCOME; I NTIMATIONS WERE ISSUED U/S 143(1); THEREAFTER NOTICES U/S 148 WERE ISSUED EITHER AT TH E INSTANCE OF SUCH COMPANIES DIVULGING A ITA NO.995& 1111/KOL/2013 2 PALTRY ESCAPEMENT OF INCOME OR OTHERWISE ; ASSESSM ENT ORDERS WERE PASSED U/S 143(3) READ WITH SECTION 147 AFTER MAKING NOMINAL ADDITION S AND THE AOS, DURING THE COURSE OF SUCH ASSESSMENT PROCEEDINGS, MADE SOME FORMAL ENQUI RIES ABOUT SHARES 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 A SSAILED BEFORE THE TRIBUNAL. 3. WE HAVE HEARD THE LD. DR AND THE LEARNED COUNSEL S FOR THE ASSESSEE PERUSED THE RELEVANT MATERIAL ON RECORD. 4. IT IS RELEVANT TO MENTION THAT MORE THAN 400 CASES INVOLVING SAME ISSUE WERE FIXED BEFORE US, WHICH HAVE BEEN HEARD. ALL THE LD. ARS W ERE GIVEN OPPORTUNITY TO ARGUE THEIR MATTERS TO FULL EXTENT. SOME OF THE LD. ARS ARGUED THE MATTER ON MERITS AND ALL OTHER ARS ADMITTED THAT FACTS AND CIRCUMSTANCES OF ALL THE CA SES WERE MUTATIS MUTANDIS SIMILAR TO THOSE ARGUED. THEREAFTER, THE REMAINING CASE SPECIF IC ISSUES WERE ARGUED BY ALL THE LD. ARS, PERTAINING TO THEIR RESPECTIVE CASES. WE HAVE PASSED A SEPARATE LEAD ORDER IN THE CASE OF M/S SUBHLAKSHMIVANIJYAPVT. LTD., VS. CIT ( ITA NO. 1104/KOL/2014 A.Y. 2009- 10) ALSO COVERING OTHER EIGHTEEN CASES DEALING WIT H ALL THE ISSUES RAISED BEFORE US IN MORE THAN 400 APPEALS, INCLUDING THE INSTANT BATCH, FOR WHICH WE ARE PASSING SEPARATE ORDERS. FOLLOWING CONCLUSIONS HAVE BEEN DRAWN IN THE LEAD O RDER : - A. CONTENTION OF THE ASSESSEE THAT SINCE THE AO OF TH E ASSESSEE-COMPANY WAS NOT EMPOWERED TO EXAMINE OR MAKE ANY ADDITION ON ACCOUN T 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 ORDER 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 SUCH ASSESSMENT OR DER, BY HOLDING THAT :- ITA NO.995& 1111/KOL/2013 3 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 JUR ISDICTION OF THE AO IN MAKING ENQUIRIES ON THE ISSUES OR MATTERS AS HE CON SIDERS FIT IN TERMS OF SECTION 142(1) AND 143(2) OF THE ACT, WHICH IS RELE VANT 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 EMP OWERED TO REVISE THE ASSESSMENT ORDER ; IV) THE ORDER OF THE CIT IS NOT BASED ON IRRELEVANT CONSIDERATIONS AND FURTHER IN THE PRESENT CIRCUMSTANCES, HE WAS NOT OB LIGED TO POSITIVELY INDICATE THE DEFICIENCIES IN THE ASSESSMENT ORDER O N 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 PR EMISE THAT THE AO DID NOT MAKE ENQUIRY THEREBY RENDERING THE ASSESSMENT ORDER ERRONEOUS AND PREJUDICIAL 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 AFFIXTURE OR OTHERWISE. FUR THER THE LAW DOES NOT REQUIRE THE SERVICE OF NOTICE U/S 263 STRICTLY AS PER THE T ERMS 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 BEEN COMPLIED WITH IN ALL S UCH 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. 143(3) AND NOT THE DAT E OF INTIMATION ISSUED U/S 143(1) ITA NO.995& 1111/KOL/2013 4 OF THE ACT, WHICH 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 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. G. AFTER AMALGAMATION, NO ORDER CAN BE PASSED U/S 263 IN THE NAME OF THE AMALGAMATING COMPANY. BUT, WHERE THE INTENTION OF T HE ASSESSEE IS TO DEFRAUD THE REVENUE BY EITHER FILING RETURNS, AFTER AMALGAMATIO N, IN THE OLD NAME OR OTHERWISE, THEN 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 PARTICIPATION OF THE ASSE SSEE 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 CANNOT RENDER THE O RDER 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 DRAWN ARE APPLICABLE TO THE APPEALS IN THIS BATCH. MR.S.M.SURANA, LEARNED COUNS EL FOR THE ASSESSEE IN ITA NO.995/KOL/2013 SUBMITTED THAT NO NOTICE WAS SERVED ON THE ASSESSEE AND THEREFORE THE ORDER PASSED U/S.263 OF THE ACT SHOULD BE SET ASIDE AND THE MATTER REMANDED TO CIT FOR ITA NO.995& 1111/KOL/2013 5 FRESH DISPOSAL AFTER AFFORDING OPPORTUNITY OF BEING HEARD. HE RELIED ON A DECISION OF THE HONBLE CALCUTTA HIGH COURT IN THE CASE OF M/S/RATN AGIRI COMMERCIAL PVT. LTD. AND ANOTHER VS. ITO WHEREIN THE HONBLE CALCUTTA HIGH C OURT HAD LAID DOWN THAT IN CASE OF NON SERVICE OF NOTICE U/S.263 OF THE ACT, THE ORDER U/S.263 HAS TO BE SET ASIDE FOR FRESH DISPOSAL TO DECIDE AFTER AFFORDING OPPORTUNITY OF B EING HEARD. HOWEVER IN THE PRESENT CASE, WE FIND THAT THE CIT HAD SERVED NOTICE ON THE ASSESSEE BY AFFIXTURE AS STATED IN THE IMPUGNED ORDER. THEREFORE THE DECISION REFERRED TO BY THE LEARNED COUNSEL FOR THE ASSESSEE IS NOT APPLICABLE TO THE FACTS OF THE PRES ENT CASE. 6. THE LEARNED COUNSEL FOR ONE OF THE ASSESSEE MR. SUJOY SEN, HAD RAISED ISSUES BY WAY OF ADDITIONAL GROUNDS TO THE EFFECT THAT THE CIT WH O PASSED THE IMPUGNED ORDER IN HIS CASE DID NOT HAVE THE REQUISITE JURISDICTION AND TH AT THERE WAS NO PROPER SERVICE OF NOTICE U/S.263 AND THAT THERE WAS LACK OF PROPER OPPORTUNI TY OF BEING HEARD AFFORDED TO THE ASSESSEE. ALL THESE ISSUES HAVE ALREADY BEEN DEALT WITH IN THE LEAD ORDER AND ARE APPLICABLE TO THE FACTS OF THE ASSESSEES CASE AS W ELL. FOLLOWING THE VIEW TAKEN IN THE LEAD ORDERS, WE UPHOLD ALL THE IMPUGNED ORDERS. 7. IN THE RESULT ALL THE APPEALS ARE DISMISSED. THE ORDER PRONOUNCED IN THE OPEN COURT ON 01.06.20 16. SD/- SD/- [P.M.JAGTAP] [N.V. VASUDEVAN] ACCOUNTANT MEMBER JUDICIAL MEMBER DATED, 1 ST JUNE, 2016. RG.PS COPY FORWARDED TO: APPELLANT RESPONDENT CIT CIT (A) DR, ITAT AR, ITAT, KOLKATA ITA NO.995& 1111/KOL/2013 6 DATE 1. DRAFT DICTATED ON ( TYPED BY MEMBER) 2. DRAFT PLACED BEFORE THE AUTHOR 3. DRAFT PLACED BEFORE THE OTHER MEMBER 4. APPROVED DRAFT COM ES TO THE ITA NO.995& 1111/KOL/2013 7 SR.PS/PS 5. FILE SENT TO THE BENCH CLERK 6. DATE ON WHICH FILE GOES TO THE HEAD CLERK. 7. DATE ON WHICH FILE GOES TO THE AR 8. DATE OF DISPATCH OF ORDER.