GARUD CREDIT & HOLDING PVT LTD,KOLKATA vs. I.T.O WD - 9(2),KOLKATA, KOLKATA
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Income Tax Appellate Tribunal, ‘B’ BENCH, KOLKATA
Before: Shri Sanjay Garg & Dr. Manish Borad
Per Dr. Manish Borad, Accountant Member:- This appeal at the instance of assessee for assessment year 2009-10 is directed against the order of ld. Commissioner of Income Tax, Kolkata-III, Kolkata dated 05.03.2013 framed under section 263 of the Act.
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited 2. The grounds of appeal raised by the assessee are as under:-
(1) For that in the facts and circumstances of the case the notice u/s 263 of the Income Tax Act 1961 issued by the learned Commissioner of Income Tax was without jurisdiction for want of proper notice and opportunity and the order passed on the basis of such notice was bad in law hence the same be quashed and or annulled. (2) For that in the facts and circumstances of the case the notice u/s 263 of the Income Tax Act 1961 issued by the learned Commissioner of Income Tax was without jurisdiction and the order passed on the basis of such notice was bad in law hence the same be quashed and or annulled. (3) For that in the facts and circumstances of the case the Learned Commissioner of Income Tax erred in holding that the assessment order passed by the learned assessing officer in the case of the appellant with inadequate inquiry and hence erroneous and prejudicial to the interest of revenue and thereby setting aside the said assessment order u/s 263 of the Income Tax Act 1961. (4) For that in the facts and circumstances of the case the Learned Commissioner of Income Tax erred in holding that the assessment order passed by the learned assessing officer in the case of the appellant was erroneous and prejudicial to the interest of revenue and thereby setting aside the said assessment order u/s 263 of the Income Tax Act 1961.
(5) For that in the facts and circumstances of the case the Learned Commissioner of Income Tax failed to appreciate that the assessment order was not erroneous and prejudicial to the interest of revenue and as such the Learned Commissioner of Income Tax had no jurisdiction to interfere with the said assessment order. (6) For that in the facts and circumstances of the case the order passed by the Learned Commissioner of Income Tax u/s 263 of the Income Tax Act 1961 is based on wrong appreciation of facts of the case and is bad in law. (7) For that in the facts and circumstances of the case the order passed by the Learned Commissioner of Income Tax u/s 263 of the Income Tax Act 1961 failed to consider the correct law applicable to provisions of Section 68 of the IT Act 1961 and hence the order passed be quashed.
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited (8) For that in the facts and circumstances of the case the directions contained in the order passed by the Learned Commissioner of Income Tax u/s 263 of the Income Tax Act 1961 are beyond jurisdiction and hence the same be struck down or quashed. (9) For that in the facts and circumstances of the case the order passed by the Learned Commissioner of Income Tax u/s 263 of the Income Tax Act 1961 is without any basis and hence the same be quashed. (10) The appellant craves leave to press new, additional grounds of appeal or modify, withdraw any of the above grounds at the time of hearing of the appeal.
Brief facts of the case as called out from the records are that the assessee is a Private Limited Company engaged in the business of trading and investment. Income of Rs.16,940/- declared in the return for A.Y. 2009-10 filed on 24.09.2009. A notice under section 148 of the Act was issued on 07.12.2010 and duly served upon the assessee and reopening proceedings were carried out under section 147 of the Act. The reasons for reopening was on account of preliminary expenses written off under section 35D of the Act as well as higher amount of expenses claimed by the assessee during the year as compared to the preceding year. The ld. Assessing Officer noticed that during the year, there is a transaction of share capital and share premium received by the assessee at Rs.14,69,50,000/- from issue of 14,69,500 equity shares of face value of Rs.10/- each along with share premium of Rs.90/- per share. To verify the said transactions, notices under section 133(6) of the Act were issued to some of the share applicants on test check basis and thoroughly investigated the issue. The ld. Assessing Officer
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited further examined the expenses claimed during the year and finally completed the assessment without making any addition on account of share capital received during the year but disallowed the expenses of Rs.1,00,750/- and assessed the income at Rs.1,17,690/-.
Subsequently ld. CIT called for the assessment records and noticed that the ld. Assessing Officer has not examined the transactions of share capital and share premium received by the assessee during the year and thus assumed jurisdiction under section 263 of the Act. In the show-cause notice dated 01.02.2023, it was stated that “on examination of records, it was found that 14,69,500 shares were issued by the said company at face value of Rs. 10/- each at a premium of Rs.90/- per share. In other words, the assessee company raised a paid up share capital of Rs.146 lacs with premium of Rs.13.23 crores. Further on perusal of the assessment records it is found that requisite inquiries were not conducted regarding the issue as to what prompted the subscribers to the shares to pay such substantial premium on shares of a little known company having no or insignificant business activities. It is apparent that the order was passed without application of mind”.
The assessee filed written submission on 27.02.2013 stating that the ld. Assessing Officer has passed the order after applying his mind and has conducted proper inquiry regarding identity and creditworthiness of the shareholders. It was also stated that confirmation letters along with PAN, copy of Bank statement and
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited balance-sheet of the subscribing companies were filed before the ld. Assessing Officer, and therefore, proper inquiry has been conducted and thus proceedings under section 263 of the Act should be dropped.
However, the ld. CIT was not satisfied and he discussed about the common practice of introducing unaccounted money by way of share capital of dummying companies, huge premium received in new formed companies and thus observed that unaccounted monies claimed as share capital by creating a façade of paper work rotating the money through several banking channels. Thus the ld. CIT held the assessment order dated 15.02.2011 as erroneous and prejudicial to the interest of revenue observing as follows:- “I have considered the facts of the case and the decisions of the superior Courts cited above. I am of the opinion that the A.O. by not pursuing the inquiries to their logical end has made the order erroneous and prejudicial to the interest of revenue. The order is, therefore, set aside and the A.O. is directed to carry out through & detailed enquiries in the case. He should carry out inquiries about the various layers through which the share capital has been rotated. The A.O. is also directed to summon the present & past Directors of the assessee company and the subscriber companies and examine them. The A.O. should also examine as to when this company was sold. At that point of time the fictitious assets such as shares in other companies or loans given to other companies is converted back into cash by credit in the assessee company’s bank account. The source of this money also needs to be examined. Further, information should be sent to the A.Os of the subscriber companies and to the other companies through which the capital has been rotated regarding the findings of the A.O. Subsequent to the inquiries & verification of all relevant aspects of the case, the A.O. should pass a speaking order after providing adequate opportunity to the assessee”.
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited 7. Aggrieved, the assessee is now in appeal before the Tribunal.
The assessee has referred to the detailed written submissions placed on record and referred to various documents placed in the paper book running into 425 pages and made two- fold arguments. Firstly it is contended that the reopening proceedings carried out by the assessee vide issuance of notice under section 148 of the Act on 07.12.2010 and thereafter proceedings completed on15.02.2011, are bad-in-law and non-est since statutory notice under section 143(2) of the Act was not issued to the assessee and, therefore, since the subject matter of the revisionary proceedings i.e. assessment order dated 15.02.2011 is nullity, bad-in-law and non-est, therefore, revisionary proceedings under section 263 cannot be carried out on the basis of such non-est assessment and the same deserves to be quashed.
The second fold of contention is that extensive inquiries and investigations were carried out by the ld. Assessing Officer before drawing one of the possible views and the same is evident from the order-sheet, which is part of the assessment records which indicate that all the relevant documentary evidences regarding the alleged share capital and share premium received were filed including the financials, bank statements, income tax return, confirmation letters and identity proof etc. In most of the cases, ld. Assessing Officer has issued notices under section 133(6) of the Act, which have been duly complied. Even the ld. Assessing
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited Officer has deputed an Inspector to examine the correctness of the assessee’s claim and Inspector has given a report dated 10.02.2011 placed at page 92 of the paper book about the thirteen share subscribers stating that these parties were found at the address and he has verified the confirmation reply received with relevant documentary evidences. Thus since the detailed inquiry has been conducted by the ld. Assessing Officer in the reassessment proceedings on the issue which has been referred to by the ld. CIT in the impugned order and since the ld. Assessing Officer has taken a permissible view in law, therefore, ld. CIT erred in assuming jurisdiction under section 263 of the Act. The assesese placed reliance on plethora of judgments and the same are referred below:- S.No. Title CITATION AUTHORITY Following Page No. of LPP Argument:- Mandatory to issue notice u/s 143(2) CBDT Circular No.549 dated -- 1 31.10.1989 PCIT vs. Oberoi (2018) 409 ITR 132 The Hon’ble High Court of 2 – 6 Hotels (P) Ltd. (Cal). Calcutta PCIT vs. Akzo Noble (2018) 2 NYPCTR The Hon’ble High Court of 7 India Ltd. 708 (Cal) Calcutta ACIT &Anr. (2010) 321 ITR 0362 The Hon’ble Supreme 8 – 13 vs. Hotel Blue Moon Court Alok Mittal vs. DCIT (2017) 167 ITD 325 The Hon’ble ITAT, 14 – 17 (Kol) Kolkata Bench CIT vs. Sri Moins ITA No. 168/2009 The Hon’ble High Court of 18 – 28 Iqbal Allahabad PCIT-1 vs. M/s ITA The Hon’ble High Court of 29 – 33 Consortium Nussli No.62/2022dated Delhi Comfort Net 24.03.2022 Argument:- Non issuance of notice u/s 143(2) renders the assessment non est PCIT vs. Silver Line (2016) 383 ITR 455 The Hon’ble High Court of 34 – 40 (Del) Delhi PCIT-08 Vs. Shri Jai ITA No. 519/2015 The Hon’ble High Court of 41 – 49 Shiv Shankar Delhi Traders Pvt. Ltd. Argument:- CIT cannot assume jurisdiction over proceedings which does not exist in the eyes of law Keshab Narayan (1998)66 CCH 0874 The Hon’ble High Court of 50 – 57 Banerjee vs. CIT Calcutta Concord Infra (2021) 63 CCH 0117 The Hon’ble ITAT, 58 – 68 Projects Pvt. Ltd. Vs. Kolkata Bench 7
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited PCIT Classic Flour and 764 to 766/Kol/ The Hon’ble ITAT, 69 – 80 Food Processing vs. 2014 dated Kolkata Bench ITO, Wd-11(4), 05.04.2017. Kolkata, M/s Charam Vincom 758/Kol/2019 dated The Hon’ble ITAT, 81 – 85 Pvt. Ltd. vs. 01.01.2020 Kolkata Bench I.T.O.,Ward-3(1), Kolkata Minimax Commerce (2021) 133 The Hon’ble ITAT, Raipur 86 – 90 (P.) Ltd. vs. ACIT, taxmann.com 188 Bench Raipur Parveen Kumar (2021)63 CCH 0256 The Hon’ble ITAT, 91 – 101 Mittal vs. PCIT Chandigarh Supersonic (2019) 175 DTR 30 Hon’ble ITAT, Delhi 102 – 121 Technologies (P) Ltd. Bench Vs. PCIT Pioneer Distilleries ITA No. The Hon’ble ITAT, Pune 122 – 129 Limited Vs. PCIT-1, 479/PUN/2017 Bench Aurangabad Argument:- No addition u/s 68 if identity of subscribers has been furnished. CIT vs Lovely (2008) 216 CTR 195 The Hon’ble Supreme 130 Exports (P) Ltd Court Argument:- Jurisdiction u/s 263 cannot be assumed in case of inadequate enquiry: PCIT vs. Singhal (2022) 6 NYPCTR The Hon’ble High Court 131 – 134 Enterprises (P) Ltd. 973 (Cal) of Calcutta PCIT Vs. SPML Infra (2022) 6 NYPCTR The Hon’ble High Court 135 – 138 Ltd. 1314 (Cal) of Calcutta Argument:- Issuance of notice u/s 133(6) of the Income Tax Act, 1961 held to be sufficient enquiry PCIT vs. BMR (2022) 6 NYPCTR The Hon’ble High Court 139 – 142 Commercial (P) Ltd. 1229 (Cal) of Calcutta Argument:- Jurisdiction u/s 263 cannot be assumed in case of inadequate enquiry: Salarpuria (2022) 197 ITD 490 The Hon’ble 143 – 154 Properties (P) Ltd. (Kol) ITAT, Kolkata Bench Vs. PCIT Shringar Marketing (2021) 190 ITD 16 The Hon’ble 155 – 174 (P) Ltd. vs. PCIT (Kol) ITAT, Kolkata 'A' Bench Argument:- Case is squarely covered by the decision of Hon’ble Kolkata Tribunal holding the amendment brought by Finance Act, 2012 to be prospective Starpoint (2022) 94 ITR_TRIB The Hon’ble 175 – 205 Construction (P) Ltd. (Trib) 299 (Kol) ITAT, Kolkata Bench vs. PCIT Argument:- Jurisdiction u/s 263 can be assumed based on material on record only CIT vs. G.M. Mittal (2003) 263 ITR 255 The Hon’ble Supreme 206 – 208 Stainless Steel (P) (SC) Court Ltd. PCIT vs. J.K. Tyre & (2022) 6 NYPCTR The Hon’ble High Court 209 – 212 Industries Ltd. 1064 (Cal) of Calcutta Britannia Industries (2022) 36 NYPTTJ The Hon’ble 213 – 230 Ltd. vs. PCIT 1021 (Kolkata) ITAT, Kolkata 'B' Bench Argument:- Before assuming jurisdiction u/s 263 it is necessary for CIT to conduct inquiry – Power coupled with duty PCIT vs. Britannia (2022) 6 NYPCTR The Hon’ble High Court of 231 – 235 Industries Ltd. 1475 (Cal) Calcutta ITO vs. DG Housing (2012) 343 ITR 329 The Hon’ble High Court of 236 – 250
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited Projects Ltd. Delhi Suresh Chand Writ Petition (Civil) The Hon’ble Supreme 251 – 299 Gautam vs. State of No. 690 of 2015 court of India Uttar Pradesh Argument:- No addition based on perception of culpability PCIT vs. Himachal (2018) 98 The Hon’ble Supreme 300 – 301 Fibers Limited taxmann.com 173 Court of India PCIT vs. Himachal (2018) 98 The Hon’ble High Court of 302 Fibers Limited taxmann.com 172 Delhi Argument:- No addition merely by reference to notorious practice:- Lalchand Bhagat (1959) 37 ITR 288 The Hon’ble Supreme 303-318 Ambica Ram vs. CIT Court of India CIT vs. Discovery TS-63-HC-2013(Del) The Hon’ble High Court of 319 – 327 Estates P. Ltd Delhi Argument:- No addition merely by referring to the surrounding circumstances CIT vs. Bedi & Co. (1998) 230 ITR 0580 The Hon’ble Supreme 328 – 332 Pvt. Ltd. Court of India Bedi & Co. Pvt. Ltd. (1983) 144 ITR 0352 The Hon’ble High Court of 333 – 336 vs. CIT Karnataka Baba Bhoothnath ITA No. 1494 The Hon’ble ITAT, 337 – 362 Trade & Commerce /Kol./2017 Kolkata Ltd. vs. ITO CIT vs. Roseberry GA No.3296 of 2010 The Hon’ble High Court of 363 – 365 Mercantile (P) Ltd. ITA No. 241 of 2010 Kolkata Argument:- Jurisdiction u/s 263 cannot be assumed for making roving or fishing inquiry Jagu Dnyanu (2022) 36 NYPTTJ The Hon’ble ITAT, PUNE 366 – 371 Deokate vs. ITO 1504 (Pune) "A" BENCH Argument:- If AO adopts plausible view then usurpation of jurisdiction u/s 263 is bad in law Malabar Industrial (2000) 243 ITR 83 The Hon’ble Supreme 372 – 377 Co. Ltd. Vs. CIT (SC) Court of India CIT vs. J.L. Morrison (2014) 366 ITR 593 The Hon’ble High Court 378 – 405 (India) Limited (Cal) of Calcutta Commissioner of (2007) 213 CTR The Hon’ble Supreme 406 – 407 Income Tax Vs. Max 0266 (SC) Court of India India Ltd. Commissioner of (2017) 390 ITR 0292 The Hon’ble High Court 408 – 414 Income Tax Vs. of Bombay Nirav Modi Hill Queen (2021) 189 ITD 139 The Hon’ble High Court 415 – 433 Investment (P) Ltd. (Kol) of Kolkata vs. PCIT, Argument:- No onus to explain source of source and net worth is sufficient to establish creditworthiness PCIT Vs. M/s Chain (2018) 408 ITR 561 The Hon’ble High Court of 434 – 460 House International (MP) Madhya Pradesh Pvt. Ltd., PCIT Vs. M/s Chain (2019) 2 SLPCTO 60 The Hon’ble Supreme 461 House International (2019) 262 Taxman Court Pvt. Ltd., 207 Argument:- Jurisdiction u/s 263 can be assumed based on material on record only: CIT vs. Gabriel India (1993) 71 Taxman The Hon’ble Bombay 462 – 467 Limited 585 High Court
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited 10. On the other hand, ld. Departmental Representative vehemently argued supporting the finding of ld. CIT. Ld. D.R. and also submitted that most of the alleged share subscribers are paper/jama kharchi companies having poor financials, and no regular business activity and prima facie seems to be accommodation entry providing companies, wherein funds are rotated through a chain of companies and the same has not been examined by the ld. Assessing Officer with respect to the provisions of section 68 of the Act.
We have heard the rival contentions and perused the relevant material placed before us and carefully gone through the decisions relied by the ld. Counsel for the assessee. Revisionary proceedings under section 263 of the Act are challenged before us by the assessee claiming that the ld. CIT erred in assuming jurisdiction and further erred in carrying out the revisionary proceedings ignoring the fact that firstly the reassessment proceedings carried out by the assessment order dated 15.02.2011 are itself bad-in-law since statutory notice under section 143(2) of the Act was not issued and served upon the assessee before carrying out reassessment proceedings, and secondly thorough inquiry has been conducted by the ld. Assessing Officer regarding the issue of equity shares of 14,69,500 at a face value of Rs.10/- each and charging share premium of Rs.90/- per share.
So far as the first contention of the assessee that the impugned proceedings are bad-in-law because the subject matter
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited of the revisionary proceedings i.e. reassessment proceedings were itself bad-in-law and non-est since notice under section 143(2) of the Act was not issued and served upon the assessee, we notice that in the body of the assessment order, it is stated by the ld. Assessing Officer that notices under section 143(2) and 142(1) of the Act were issued and duly served upon the assessee. However, our attention is drawn to the RTI application dated 31.12.2020 filed by the assessee for providing the certified copies of replies and documents submitted by the assessee during the assessment on both the occasions and also notices/show-cause notices issued during the assessment proceedings under section 143(3) as well as 144 read with respect to section 263 of the Act. However, when the document were supplied to the assessee, the copy of notice under section 143(2) of the Act, if any, issued/served upon the assessee, was not supplied. Further, the assessee specifically requested to provide the copy of notice u/s 143(2) and proof of service, inviting attention to following documents:-
(a) Letter filed on 05.09.2014 before the Learned DR for providing the certified copy of documents on assessment record, copy of said letter is placed on Page No. 1 of Supplementary Paper Book filed on 27.09.2022.
(b) Letter dated 06.01.’20 filed before the Learned A.O - copy placed on Page No.23 of the PB filed on 24.6.2022.
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited (c) Letter dated 03.03.20 filed before the Learned A.O on 04.03.'20 - copy placed on Page No.26 of the PB filed on 24.6.2022,
(d) Letter dated 01.03.2022 filed before the Learned A.O on 09.03.2022- copy placed on Page No.31 to 33 of the PB filed on 24.06.2022.
The Learned AO provided the certified copies of all the documents lying in the assessment record. Copy of all the documents received from the Learned AO are placed on Page No.34 to 414 of the PB filed on 24.06.2022. Copy of Notice u/s 143(2) not provided to the assessee despite specific request. No whisper about issuance of notice u/s 143(2) in the Order Sheet copy whereof is placed on Page No. 76 to 78 of the PB filed on 24.06.2022. Thus, it is inferred that no notice u/s 143(2) was served on the assessee before completing the assessment. Even ld. D.R. failed to rebut this contention and could not file any proof about issuing and serving notice under section 143(2) of the Act. So far as legal position is concerned holding that it is mandatory to issue notice u/s. 143(2) of the Act before carrying out the assessment proceedings. Reliance placed on following decisions:- S.No. Title CITATION AUTHORITY Following Page No. . of LPB — 1 CBDT Circular No.549 dated 1 31.10.1989 2 PCIT vs. Oberoi Hotels (P) 2-6 (2018) 409 ITR 132 The Hon’ble High Court of Ltd. (Cal). Calcutta 3 7 PCIT vs. Akzo Noble (2018)2 NYPCTR 708 The Hon’ble High Court of India Ltd. (Cal) Calcutta 4 ACIT &Anr. vs. Hotel (2010) 321 ITR 0362 The Hon’ble Supreme Court 8-
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited Blue Moon 13
5 Alok Mittal vs. DCIT (2017) 167 ITD 325 (Kol) The Hon’ble ITAT, 14- 17 Kolkata Bench 6 CIT vs. Sri Moins Iqbal ITA No. 168/2009 The Hon’ble High 18- Court of Allahabad 28 7 PCIT-1 vs. M/s ITA No.62/2022date d The Hon’ble High 29- 33 Consortium Nussli 24.03.2022 Court of Delhi Comfort Net
It has been consistently held that the assessment completed u/s 143(3) r.w.s. 147 without issuance of notice u/s 143(2) renders the assessment order as non est. The assessee placed reliance on following judicial pronouncements wherein it has been held that the assessment order passed u/s 143(3) r.w.s. 147 without issuing notice u/s 143(2) is bad in law and is a nullity. Sl. TITLE CITATION AUTHORITY No. . Page No. of LPB I. PCIT vs. Silver Line (2016) 383 ITR Hon’ble High Court 34-40 455 (Del) of Delhi 2. PCIT-08 Vs. Shri Jai ITA No. Hon’ble High Court 41-49 Shiv Shankar Traders 519/2015 of Delhi Pvt. Ltd.
Further the assessee placed reliance on following judicial pronouncements wherein it has been held that if the assessment order passed by the Learned A.O. is bad-in- law and non est then the Learned CIT cannot assume jurisdiction over such assessment order, which does not exist in the eyes of law:-
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited S.No. TITLE CITATION AUTHORITY Following Page No. of LPB 1 Keshab Narayan Banerjee (1998)66 CCH 0874 Hon’ble High 50-57 vs. CIT Court of Calcutta 2 Concord Infra Projects Pvt. (2021)63 CCH 0117 Hon’ble ITAT, 58-68 Ltd. vs. Kolkata Bench PCIT 3 Classic Flour and Food 764 to 766/Kol/ Hon’ble ITAT, 69-80 Processing vs. ITO, Wd- 2014 dated Kolkata Bench 11(4), Kolkata, 05.04.2017. 4 M/sCharamVincom Pvt. Ltd. 758/Kol/2019 dated Hon’ble ITAT, 81-85 vs I.T.O.,Ward-3(l), Kolkata 01.01.2020 Kolkata Bench 5 Minimax Commerce (P.) Ltd. (2021) 133 Hon’ble ITAT, 86-90 vs. ACIT, Raipur taxmann.com 188 Raipur Bench 6 Parveen Kumar Mittal vs. (2021)63 CCH 0256 Hon’ble ITAT, 91-101 PCIT Chandigarh 7 102-121 Supersonic Technologies (P) (2019) 175 DTR 30 Hon’ble ITAT, Ltd. Vs. PCIT Delhi Bench 8 Pioneer Distilleries Limited ITA No. Hon’ble ITAT, 122-129 Vs. PCIT-1, Aurangabad 479/PUN/2017 Pune Bench
Thus in view of the above judicial pronouncements and ld. D.R. being unable to place any documentary evidence on record to prove that the assessee was served with the notice under section 143(2) of the Act at the time of carrying out the reassessment proceedings after the issue of notice under section 148 of the Act dated 07.12.2010, we are inclined to hold that such reassessment proceedings were itself bad-in-law and non- est and the same cannot be a subject matter of the revisionary proceedings and thus on this legal ground itself, the revisionary proceedings under section 263 of the Act are quashed.
Now dealing with the second fold of contention made by the assessee challenging the assumption of jurisdiction under section 263 of the Act, since the issue before us pertains to the
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited invocation of jurisdiction u/s 263 of the Act, we find that the provisions of Section 263 of the Act has a direct bearing on the issue raised before us, therefore, it is pertinent to take note of this Section which reads as under:
"263(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal.
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation- In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded."
On a bare perusal of the sub section-1 would reveal that powers of revision granted by section 263 to the learned Commissioner have four compartments. In the first place, the learned Commissioner may call for and examine the records of any proceedings under this Act. For calling of the record and examination, the learned Commissioner was not required to show any reason. It is a part of his administrative control to call for the records and examine them. The second feature would come when he will judge an order passed by an Assessing Officer on culmination of any proceedings or during the pendency of those proceedings. On an analysis of the record and of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Commissioner would issue a show-
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited cause notice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He may set aside the order and direct the Assessing Officer to pass a fresh order. At this stage, before considering the multi- fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263.
Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC)has laid down following ratio with regard to provisions of section 263 of the Act: “There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue’ has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue;
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited or where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Officer accepting the same as such will be erroneous and prejudicial to the interests of the revenue - Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC). [Emphasis Supplied]”
Now in light of judicial precedence, let us examine the second fold of contention by the assessee that extensive inquiries and investigation was carried out by the Ld. AO before adopting one of the possible views, hence, assessment order cannot be said to be erroneous. We note that Ld. AO sought specific information about the shareholders vide notice u/s 142(1) dated 21.12.2010, copy whereof is placed on Page No. 4 of the PB filed on 24.6.2022. The assessee duly furnished the complete particulars of all the shareholders, which is evident from Page No.408 to 409 of the PB filed on 24.06.2022,
The Learned A.O himself carried out extensive inquiries and investigation by exercising the powers conferred on him u/s 133(6) Income Tax Act, 1961which is evident from documents obtained from the assessment record and placed on Page No. 34 to 414 of the PB filed on 24.6.2022, the copies of notices issued u/s 133(6) of the Income Tax Act, 1961 by the Ld. AO to the shareholders are placed on following Page Number of the Paper Book filed on 24.6.2022 (Page No.79 to 91 of the Paper Book):
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited SI. Name of the Shareholder Amount of Copy of notice under No. Investment in share capital of section 133(6) placed on assessee following page 1 Rasraj Dealer Pvt. Ltd. 95,00,000/- 79 2 Shambhu Agencies Pvt. 1,15,00,0000/- 80 Ltd. 3 Pearl Distributors Pvt 72,00,000/- 81 Ltd. 4 Tanisha Vyapaar Pvt. 75,00,000/- 82 Ltd. 5 Destiny Heights Pvt. Ltd. 91,50,000/- 83 6 Ganesh Vincom Pvt. Ltd. 87,50,000/- 84 7 GoodwardVyapaar Pvt. 65,00,000/- 85 Ltd. 8 Greenfield Vinimay Pvt. 90,00,000/- 86 Ltd. 9 Idea Vinimay Pvt. Ltd. 65,00,000/- 87 10 Kasturi Barter Pvt. Ltd. 90,00,000/- 88 11 Reliable Heights Pvt. Ltd. 1,05,00,000 /- 89 12 PavitraTrexim Pvt. Ltd. 1,25,00,000/- 90 13 Sakar Sales Pvt. Ltd. 91,50,000/- 91 Subtotal - A 11,67,50,000/- Other Shareholders:- SI. No. Name of the Shareholder Amount of Investment in share capital of assessee 1 Ankit Dealers Pvt. Ltd. 35,00,000/- 2 Gouri Merchandise Pvt. Ltd. 10,00,000/- 3 HaraparbatiTracom Pvt. Ltd. 20,00,000/- 4 Luminant Traders Pvt Ltd 30,00,000/- 5 Pacific InfiwarePvt Ltd 30,00,000/- 6 RashinoVyapaarPvt Ltd 32,00,000/- 7 Response Vincom Pvt. Ltd.. 36,00,000/- 8 S.K.Fintex Pvt. Ltd. 45,00,000/- 9 Starshine Towers Pvt. Ltd. 24,00,000/- 10 Tanya Enclave Pvt. Ltd. 40,00,000/- Subtotal - B 3,02,00,000/- Grand Total - (A+B) 14,69,50,000 /-
It is quite apparent that the Ld. AO had carried out extensive inquiries and investigation in respect of as many as 13 shareholders from whom the aggregate amount of share capital raised was Rs.l1,67,50,000/-, thus, virtually the entire share capital was thoroughly examined by the Ld. AO and since the results of inquiry and investigation supported the veracity of share capital, hence, the Ld. AO drew one of the possible views.
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited
Further we observe that the order passed by the Learned A.O cannot be said to be without application of mind inasmuch as the Learned A.O had duly applied his mind which is evident from the fact that the Learned A.O had issued notices u/s 133(6) of the Income Tax Act, 1961 and had even deputed the Inspector for carrying out spot inspection and had called for several documents from the subscriber companies that are placed on Page No. 93 to 327 of the PB filed on 24.06.2022, the Learned A.O had gone through the books of accounts of the assessee with reference to the relevant documentary evidences which is evident from the notings in the order sheet which is placed on Page No. 76 to 77 of the PB filed on 24.06.2022. The books of accounts were produced on 25.01.2011 and which was cross checked with the bank account statement of the assessee and the Learned A.O duly considered the Inspector’s report which is evident from order sheet entry dated 10.02.2011. Thus, the observation of Learned CIT that the assessment order was passed without application of mind is bereft of merit.
Further we find that the Learned PCIT has held that proper enquiry was not conducted regarding the identity and creditworthiness of shareholders, but no doubt was expressed as far as genuineness of the receipt of share capital is concerned, in other words, genuineness of the receipt of share capital has not been doubted either in the show cause notice or in the impugned order u/s 263 which is evident from Para 3 of the impugned order u/s 263.We also note that the assessee had duly furnished
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited the name and address of all the subscriber companies. Based on the result of the enquiry conducted by the Learned A.O, it was found by the Learned A.O that all the subscriber companies are very much in existence and are holding valid CIN and PAN and details whereof are as under:- Si. Name of the subscriber Corporate Identification PAN Amount of share No Company Number (CIN) capital subscribed
1 Destiny Heights Pvt. U45400WB2007PTC116983 AACCD7563L 91,50,000/- Ltd. 2 Ganesh Vincom Pvt. Ltd. U51109 AADCG0228N 87,50,000/- WB2008PTC121299 3 GoodwardVyapaar Pvt. U29253WB2007PTC119721 AADCG2325G 65,00,000/- Ltd. 4 Greenfield Vinimay Pvt. U51109WB2007PTC118709 AADCG0183A 90,00,000/- Ltd. 5 Idea Vinimay Pvt. Ltd. U51109WB2008PTC126214 AABC19051P 65,00,000/- 6 Kasturi Barter Pvt. Ltd. U51109WB2008PTC121667 AADCK2518H 90,00,000/- 7 PavitraTrexim Pvt. Ltd. U51109 AABCP5170C 1,25,00,000/- WB1993PTC060167
8 Pearl Distribution Pvt. U51109 AAecp3592M 72,00,000/- Ltd. MH2007PTC283633 9 Rasraj Dealer Pvt. Ltd. U51909GJ2007PTC071066 AADCR7489N 95,00,000/- . 10 Reliable Heights Pvt. U70101WB2007PTC117588 AADCR8214M 1,05,00,000/- Ltd. . 11 Sakar Sales Pvt. Ltd. U45400GJ2007PTC068034 AALCS2545L 91,50,000/-
12 Shambhu Agencies Pvt. U51109 WB2008PTC1213 AALCS4808A 1,15,00,000/- Ltd. 00
13 Tanisha Vyapaar Pvt. U17120GJ2005PTC120323 AACCT2326B 75,00,000/- Ltd.
TOTAL 11,67,50,000/-
Moreover, the existence of the subscriber companies stood established from the fact that all the subscriber companies were found at their given addresses by the Inspector of Income Tax and that the notices issued u/s 133(6) were duly served on all the subscribers and the subscribers had duly responded to the 21
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited notices issued u/s 133(6), thus, the identity of the subscribers stood established beyond all shadows of doubt.
As far as creditworthiness of the subscriber companies is concerned, the same was evident from the audited financial statements of the subscriber companies from which the Learned A.O found that all the subscriber companies had sufficient Tangible Net Worth as tabulated herein below:- Sl.No. Name of the subscriber Amount of share capital Tangible net worth as on company subscribed 31.03.2009 based on the audited financial statement 1 Destiny Heights Pvt. Ltd. 91,50,000/- 18,62,94,107/- 2 Ganesh Vincom Pvt. Ltd. 87,50,000/- 29,70,00,000/- 3 GoodwardVyapaar Pvt. Ltd. 65,00,000/- 16,11,25,000/- 4 Greenfield Vinimay Pvt. Ltd. 90,00,000/- 15,86,55,881/- 5 Idea Vinimay Pvt. Ltd. 65,00,000/- 14,55,75,000/- 6 Kasturi Barter Pvt. Ltd. 90,00,000/- 4,56,50,000/- 7 PavitraTrexim Pvt. Ltd. 1,25,00,000/- 23,98,99,316/- 8 Pearl Distributors Pvt Ltd. 72,00,000/- 13,00,63,338/- 9 Rasraj Dealer Pvt. Ltd. 95,00,000/- 10,49,50,000/- 10 Reliable Heights Pvt. Ltd. 1,05,00,000/- 16,95,54,807/- 11 Sakar Sales Pvt. Ltd. 91,50,000/- 22,04,23,493/- 12 Shambhu Agencies Pvt. Ltd. 1,15,00,000/- 21,41,54,599/- 13 Tanisha Vyapaar Pvt. Ltd. 75,00,000/- 3,47,00,000/- Total 11,67,50,000/-
We notice that during the course of reassessment proceedings, ld. Assessing Officer has called for complete details of the share capital and share premium of Rs.14,69,50,000/- to which the assessee has filed all relevant details, which were further utilized by the ld. Assessing Officer for the purpose of issuing notice under section 133(6) of the Act. He moved a step further for digging into the issue and deputed an Inspector to examine the claim of the assessee about the identity and creditworthiness of the share subscribers and genuineness of the
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited transactions to which a assessee favoring report was filed by the Inspector dated 10.02.2011 and the same is reproduced below:-
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited 27. Further we notice the following details of the share subscriber companies were filed before the ld. Assessing Officer for necessary examination:-
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited
The creditworthiness of the subscribe companies was self evident from the fact that the payments were received on account of share capital through proper banking channel from all the 27
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited subscriber companies. As far as genuineness of the transaction is concerned, it is self evident from the fact that all the subscriber companies to whom the notices were issued u/s 133(6) had duly confirmed the factum of investment having been made in the shares of the assessee company that too through proper banking channel. We find support from the following judicial pronouncements:
1 PCIT Vs. M/s Chain (2018) 408 ITR 561 (MP) The Hon’ble High 434 - 460 House International Pvt. Court of Madhya Ltd., Pradesh 2 461 PCIT Vs. M/s Chain (2019) 2 SLPCTO 60, The Hon’ble Supreme House International Pvt. (2019) 262 Taxman 207 Court Ltd., 2 PCIT vs. Goodview ITA No. 377/2016, The Hon’ble High Trading Pvt. Ltd. dated 26.11.2016 Court of Delhi 4 Baba Bhoothnath Trade ITA No. The Hon’ble ITAT & Commerce Ltd. vs. ITO 1494/Kol./2017, dated Kolkata 15.04.2019
We further observe that the Learned CIT himself admitted that enquiry was conducted by the Learned A.O, however, he resorted to a assumption of jurisdiction u/s 263 merely because the Learned A.O did not conduct those enquiries which according to Learned CIT, ought to have conducted. Thus, admittedly, it’s not a case of lack of enquiry, at the most, it may be stated that it is a case of inadequate enquiry, however, it’s a trite law that jurisdiction u/s 263 cannot be assumed in the case where there has been an enquiry though inadequate and jurisdiction u/s 263 can be validly assumed where there is lack of enquiry and not in case of inadequate enquiry and for this view reliance placed on following judicial pronouncements:-
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited 1 PCIT vs. Singhal Enterprises (2022) 6 NYPCTR 973 The Hon’ble High Court 131 - (P) Ltd. (Cal) of Calcutta 134 2 PCIT vs. SPML Infra Ltd. (2022) 6 NYPCTR 1314 The Hon’ble High Court 135 - (Cal) of Calcutta 138 3 PCIT vs. BMR Commercial (P) (2022) 6 NYPCTR 1229 The Hon’ble High Court 139- Ltd. (Cal) of Calcutta 142 4 Salarpuria Properties (P) Ltd. (2022) 36 NYPTTJ 1516 The Hon’ble ITAT, 143 - Vs. PCIT (Kol): (2022) 197 ITD Kolkata A' Bench 154 490 (Kol) 5 Shringar Marketing (P) Ltd. (2021) 190 ITD 16 (Kol) The Hon’ble ITAT, -174 vs. PCIT Kolkata A' Bench 30. The Learned CIT held the order to be erroneous on the ground that the source of the subscriber companies was not forthcoming from the bank statements but there is no merit in the said observation of Learned CIT inasmuch as Section 68 of the Income Tax Act as it stood before its amendment by Finance Act, 2012 w.e.f. A.Y2013-14 did not cast upon the assessee to explain the source of source of subscribers and all that Section 68 provided was that the assessee has to explain the nature and source of sum found credited in the books of accounts. Evidently, the Learned CIT has swayed by the amended provisions of Section 68 which were not at all applicable in the year under consideration which is pertaining to assessment year 2009-10 i.e. prior to A.Y 2013-14 and in this regard, reliance is placed on the decision of this Tribunal in the case of Starpoint Construction (P) Ltd. vs. PCIT reported in(2022) 94 ITR TRIB (Trib) 299 (Kol), and in the case of PCIT Vs. M/s Chain House International Pvt. Ltd., ITA Nos. 112, 111 and 110/2018, dated 07.08.2018 (2018) 408 ITR 561 (MP), against which the SLP filed by the Revenue has been dismissed by the Hon’ble Supreme Court.
Further we find that issuance of notice under section 133(6) of the Act tantamounts to be a sufficient enquiry as held by the
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited Hon’ble Jurisdictional High Court vide the recent order dated 31.10.2022 in the case of PCIT vs. BMR Commercial Private Limited reported in (2022) 6 NYPCTR 1229 (Cal), wherein Hon’ble Court upheld the order of this Tribunal, wherein this Tribunal had found that enquiry was conducted by the Learned A.O by issuance of notice u/s 133(6) of the Income Tax Act, 1961 and held it to be sufficient inquiry and formation of plausible view by the Learned A.O based on the results of inquiry conducted by issuing notices u/s 133(6). The Hon’ble Calcutta High Court relying upon the decision of the Hon’ble Supreme Court in Malabar Industries Company Ltd. vs. CIT reported in 243 ITR 83 as well as the decision of the Hon’ble Supreme Court in CIT vs. Max India Ltd reported in 166 Taxman 188 dismissed the appeal of the revenue and thereby accepted that once the Learned A.O had conducted inquiry by issuing notices u/s 133(6) then jurisdiction u/s 263 cannot be assumed.
Further this Tribunal in its order dated 03.08.2022 in the case of Salarpuria Properties Private Limited vs. PCIT reported in 197 ITD 490 relied upon the decision of the Hon’ble Delhi High Court in the case of Sunbeam Auto Ltd. reported in 227 CTR 133, wherein the issue of lack of inquiry and inadequate inquiry was discussed at length and it was held that the jurisdiction u/s 263 cannot be assumed in case of inadequate inquiry, conversely, jurisdiction u/s. 263 can be assumed only in case of lack of inquiry.
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited 33. We further find that the Ld. CIT did not himself carry out any inquiry or investigation before implicating the veracity of share capital raised by the assessee. In this view of the matter, the LCIT cannot hold the assessment order passed by the A.O. to be erroneous merely based on perception of culpability or by merely referring to notorious practice prevailing in the trade circle and for this proposition, we find support from following judicial pronouncements:-
S.No. TITLE CITATION AUTHORITY Following Page No. of LPB I PCIT vs. Britannia (2022) 6 NYPCTR Hon’ble High Court 231-235 Industries Ltd. 1475 (Cal) of Calcutta 2 ITO vs.DG Housing (2012) 343 ITR 329 Hon’ble High Court 236 - 250 Projects Ltd. of Delhi 3 Suresh Chand Gautam Writ Petiton (Civil) Hon’ble Supreme 251-299 vs. State of uttar No. 690 of 2015 courtof India Pradesh
Further Ld. Counsel for the assessee during the course of hearing has referred to the following judicial pronouncements:
i) No addition based on perception of culpability:- S.No. TITLE CITATION AUTHORITY Following Page No* 1 PCIT vs. Himachal Fibers (2018) 98 Hon’ble 300-301 Limited taxmann.com Supreme Court of India 173 2 PCIT vs. Himachal Fibers (2018) 98 Hon’ble High Court of 302 Limited taxmann.com Delhi 172
ii) No addition merely by reference to notorious practice:- S.No. TITLE CITATION AUTHORITY Following Page No. of LPB 1 Lalchand Bhagat (1959) 37 ITR Hon’ble 303-318 Ambica Ram vs. CIT 288 Supreme Court of India
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited 2 CIT vs. Discovery TS-63-HC- Hon’ble High Court 319-327 Estates P. Ltd 2013 (Del) of Delhi
iii) No addition merely by referring to the surrounding circumstances. S.No. TITLE CITATION
1 CIT vs. Bedi& Co. Pvt. (1998) 230 ITR 0580 Hon’ble 328-332 Supreme Court Ltd. 2 333-336 Bedi& Co. Pvt. Ltd. vs. (1983) 144 ITR 0352 Hon’ble High CIT Court of Karnataka 3 Baba Bhoothnath ITA No. The Hon’ble ITAT, 337 - 362 Trade & Commerce Ltd. 1494/Kol./2017 Kolkata vs. ITO 4 CIT vs. Roseberry GA No.3296 of 2010 ITA The Hon’ble High 363 - 365 Mercantile (P) Ltd. No. 241 of 2010 Court of Kolkata
Jurisdiction u/s 263 cannot be assumed for making roving or fishing inquiry; S.No. CITATION AUTHORITY Following Page No. of LPB 155-174 Shringar Marketing (P) (2021) 190 ITD 16 The Hon’ble 1 Ltd. vs. PCIT (Kol) ITAT, Kolkata •C’ Bench 2 Jagu Dnyanu Deokate (2022) 36 NYPTTJ The Hon’ble 366-371 vs. ITO 1504 (Pune) ITAT, Pune "A" Bench 35. Further we find that It’s a trite law that where two views are possible and if the A.O. has drawn one of the possible views, then such an order cannot be said to be erroneous and therefore, jurisdiction u/s 263 cannot be assumed and same has been held in following judicial pronouncements:- S.No. TITLE CITATION AUTHORITY Following . pages Malabar Industrial Co. Ltd. Vs. CIT (2000) The Hon’ble 1. 372 - 377 243 HR 83 Supreme (SC) Court CIT vs. J.L. Morrison (India) Limitd (2014) 366 ITR 593 (Cal) The Hon’ble High Court of 2. 378-405 Calcutta Commissioner of Income Tax Vs. (2007) 213 CTR 0266 The Hon’ble 3. 406-407 Max India Ltd. (SC) Supreme Court
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited Commissioner of Income Tax Vs. (2017) 390 ITR 0292 The Hon’ble High Court of 4. 408-414 NiravModi Bombay Hill Queen Investment (P) Ltd. vs. (2021) 189 ITD 139 (Kol) The Hon’ble High Court of 5. 415-433 PCIT, Kolkata Starpoint (2022) 94 ITR TRIB (Trib) The Hon’ble ITAT, 6. 175 – Construction (P) Ltd. Vs. PCIT 299 (Kol) Kolkata 205 Bench
Thus there is no dispute to the fact that an extensive inquiry has been conducted by the ld. Assessing Officer regarding the issue of share capital and share premium received by the assessee during the year and the ld. Assessing Officer has made proper application of mind and taken possible view as permissible in law which are duly backed by the documentary evidences filed by the assessee, independent inquiry conducted by the ld. Assessing Officer and settled judicial precedence, therefore, since the issue referred in the show-cause notice under section 263 of the Act has been properly examined by the ld. Assessing Officer, there remains no justification for ld. CIT to assume jurisdiction on the very same issue and, therefore, we quash the impugned revisionary proceedings carried out under section 263 of the Act and allow all the grounds of appeal raised by the assessee. 37. In the result, the appeal filed by the assessee is allowed. Order pronounced in the open Court on 1st May, 2023. Sd/- Sd/- (Sanjay Garg) (Manish Borad) Judicial Member Accountant Member Kolkata, the 1st day of May, 2023
ITA No. 1270/KOL/2013 Assessment Year: 2009-2010 Garud Credit & Holding Pvt. Limited Copies to :(1) Garud Credit & Holding Pvt. Limited, D.J. Shah & Co., 2, Elgin Road, Kolkata-700020
(2) Income Tax Officer, Ward-9(2), Kolkata, Aayakar Bhawan, P-7, Chowringhee Square, Kolkata-700069 (3) Commissioner of Income Tax, Kolkata-III, Kolkata; (4) The Departmental Representative (5) Guard File TRUE COPY By order Assistant Registrar, Income Tax Appellate Tribunal, Kolkata Benches, Kolkata Laha/Sr. P.S.
