SULPHUR SECURITIES PRIVATE LIMITED,FARIDABAD vs. ITO WARD-24(3), NEW DELHI
Before: SHRI SATBEER SINGH GODARA & SHRI S. RIFAUR RAHMANAssessment Year: 2012-13 Sulphur Securities Pvt. Ltd., 3198/15, 4th Floor, Gali No.1, Sangatrashan, Paharganj, New Delhi Vs. Income Tax Officer, Ward-24(3), New Delhi PAN: AAQCS9353M (Appellant)
PER SATBEER SINGH GODARA, JM
This assessee’s appeal for assessment year 2012-13, arises against the Commissioner of Income Tax (Appeals)/National
Faceless Appeal Centre [in short, the “CIT(A)/NFAC”], Delhi’s DIN and order no. ITBA/NFAC/S/250/2022-23/1050192840(1), dated
28.02.2023, involving proceedings under section 143(3) r.w.s. 147
of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’).
Assessee by None
Department by Sh. Mahesh Kumar, CIT(DR)
Date of hearing
16.07.2025
Date of pronouncement
16.07.2025
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Case called twice. None appears at the assessee’s behest. Learned CIT(DR) has invited the bench’s attention to the case records wherein the assessee has not put in appearance since 13th February, 2024 till date involving seven hearing instances in the intervening period. We thus proceed ex-parte against the assessee. 3. Next comes the assessee’s various substantive grounds inter alia challenging validity of section 148 proceedings in absence of any alleged tangible material leading learned Assessing Officer to form his reason to believe that it’s taxable income had escaped assessment without obtaining proper section 151 approval of the prescribed authority followed by section 68 unexplained cash credits to the tune of Rs.532,50,00,00/- representing share application and premium as well as commission 69C of Rs.10,65,00,000/-; @ 2% to 3% of the above amount, respectively; in assessment order dated 27.12.2019 and upheld in the CIT(A)’s detailed discussion reading as under: “3. DECISION: Ground No.-1 The appellant company was incorporated on 03.02.2012. Thus, during the F.Y. relevant to A.Y. 2012-13. It was very much in existence and required to file Return of Income as per the provisions of section 139 of the Act. The appellant omitted to file Return of Income for A.Y. 2012-13. It is seen that the appellant omitted to file Return of Income even for A.Y. 2013-14. The reopening of the case was done on the satisfaction of the AO and with the prior approval of the competent authority i.e. PCIT-8, New Delhi on 28.03.2014 and the notice u/s 148 was issued and served on the appellant in time. The appellant filed 3 | P a g e its Return of Income declaring a loss of Rs. 10,022/- only on 03.05.2019. The appellant has raised certain objections which were disposed off by the AO by way of a speaking order on 21.11.2019. Therefore, it cannot be said that the assessment order is without juri iction and void. This ground of appeal is therefore dismissed.
Ground No.-2
The AO has provided the appellant with the copy of reasons recorded for initiating proceeding u/s 147 of the Act vide letter dated
13.09.2019. The appellant vide letter dated 08.11.2019 raised objection with regard to reopening of assessment and the same were disposed off vide order dated 21.11.2019 by the AO and the same was served upon the appellant. In course of scrutiny proceeding, the AO has given adequate opportunity of hearing to the appellant to explain its case, the appellant has submitted replies. Thus, principles of natural justice have been followed by the AO. Therefore, this ground of the appellant is dismissed.
Ground No.-3
The appellant company was incorporated on 03.02.2012 in its balance sheet for the year ending 31.03.2012. The appellant declared the following information in respect of its share capital and share premium:
Sr.
No.
Particular
A.Y. -2012-13
1. Share Capital
Rs.4,27,00,000/-
Reserve and Surplus (including share premium)
Rs.528,23,89,978/-
Total Rs.532,50,89,978/-
As against this, the appellant company has claimed expenses of Rs.
10,022/-only on account of preliminary and preoperative expense written off, Rs. 1,187, administrative expense being audit fee Rs.
4,000/-, compliance certificate charges Rs. 1,000/-, Conveyance expense Rs. 1,683/-, Filing Fee Rs. 200/- and Misc. Expenses Rs.
1,952/-. From this, the AO inferred that the appellant had not condected any business during the year. The AO sought to find out as to how without carrying out any business, the newly incorporated appellant company received so much share capital and huge share premium. The AO further noted that the appellant company has issued 10,000/- shares of Rs. 10, at par and 42,60,000 shares of Rs.
10 at Rs. 1250 per share (@premium of Rs. 1240 per share). The same is summarized as under:
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We have heard learned CIT(DR) Mr. Mahesh Kumar representing Revenue who has drawn strong support from both the lower authorities’ respective findings against the assessee. Case records perused. 5. It is in this factual backdrop that we advert to the assessee’s second to fourth substantive grounds challenging validity of the impugned reopening inter alia in absence of any reasons to believe without considering his submissions and in absence of section 151 approval (supra). A perusal of the case records, more particularly, the assessment order dated 27.12.2019 indicates that the learned Assessing Officer had received relevant information from the department’s Investigation Wing that it had unearthed a web of dummy companies floated, controlled and managed by one Mr. Jain and provided accommodation entries to various parties including assessee. He thereafter recorded his reasons to believe and obtained the prescribed authority’s approval dated 28th March, 11 | P a g e
2019 which followed section 148 notice dated 3rd May, 2019. All this led to reassessment framed on 27.12.2019 treating the assessee’s above share application/premium as an unexplained cash credits and further added commission expenditure thereupon
(supra) which stand upheld in the lower appellate discussion.
6. All these relevant facts make it sufficiently clear that learned lower authorities have indeed ensured due compliance to the statutory framework all along which neither suffers from any illegality or irregularity, as the case may be. We thus reject the assessee’s instant second to fourth substantive grounds in very terms.
7. The assessee’s fifth to eighth substantive grounds plead that both the learned lower authorities have erred in law and on facts in adding the above share application/premium as well as the alleged unexplained commission expenditure thereupon. We note that the assessee has all along failed to prove genuineness of the impugned share capital involving four parties, namely, M/s. Prism
Securities Pvt. Ltd., M/s. Clay Securities Ltd., M/s. Lavender
Holdings Pvt. Ltd. and M/s. CUSP Holdings Pvt. Ltd. involving varying sums. This is what has made both the learned lower
12 | P a g e authorities to inter alia issue notices although followed by due verification of their addresses through the Inspector(s) concerned dated 13.11.2019 as discussed in the assessment records. There is further no justification found in the assessee’s huge share premium involved herein as it is found to be a company incorporated on 03.02.2012 only. We thus quote Sumati Dayal Vs.
ITR 540 (SC) and PCIT Vs. NRA Iron & Steel Co. (2019) 412 ITR 161
(SC) to conclude that we must appreciate the said evidence in light of human probabilities and after removing all bilkers and mere submission of documents does not discharge the onus of proving genuineness, to uphold the learned lower authorities’ action making the impugned additions in the assessee’s hands. Ordered accordingly.
8. This assessee’s appeal is dismissed.
Order pronounced in the open court on 16th July, 2025 (S. RIFAUR RAHMAN)
JUDICIAL MEMBER
Dated: 16/07/2025. RK/-