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Income Tax Appellate Tribunal, MUMBAI BENCH “G” MUMBAI
Before: SHRI PROMOD KUMARAND MS. SUCHITRA KAMBLE
PER MS. SUCHITRA RAGHUNATH KAMBLE, JM
This appeal is filed by the Assessing Officer against the order u/s 263 of the Income Tax Act, 1961 passed by the Pr. Commissioner of Income Tax-3 for the assessment year 2011-12.
The assessee has raised following grounds of appeal as under :
1. On facts and circumstances of the case and in law, Ld. Pr. CIT erred inpassing the revision order ws. 263 though the re-assessment order Sunayana Commercial Pvt. Ltd. 2 passedW/s.143(3) r.w.s.147 is not erroneous and in so far is not prejudicial to theinterests of the revenue; 2. On facts and circumstances of the case and in law, the revision order passedu/s 263 is bad in law, since the re-assessment order passed w/s 147 itselfwas invalid as the proposed addition of escapement of income as allegedin the notice w/s 148 was ultimately not made in the re-assessment order; 3. The Ld. Pr. CIT, having dropped the revision proposed in notice u/s 263dated 05/03/2020, is not justified in again issuing a fresh notice u/s 263dated 19/03/2020 and passing the impugned revision order; 4. The Ld. Pr. CIT, before setting aside the assessment order on invoking Sec263(1), ought to have considered the understated facts, being; a. The Ld. AO had passed the assessment order on conducting properinquiries on due application of mind and on considering all materialfacts filed/available on assessment record; b. The disputed sum of Rs. 25,00,000/- has been received by appellantfrom M/s Gokul Commodities Pvt Ltd towards sale of shares; c. There is no lack of inquiry on part of Ld. AO and the cases involvinginadequate inquiry dose not empower the Pr. CIT to invoke therevisionary power u/s Sec 263 of the Act.
The assessee-company filed its return of income for the assessment year 2011-12 on 22.03.2012 declaring total income of ₹67,167/- and the case was processed u/s 143(1) of the Income Tax Act, 1961. Subsequently, on the basis of information received from ITO (Investigation), Unit-4, Kolkata notice u/s 148 dated 30.03.2017 was issued and the assessee filed return on 24.04.2017. Thereafter, notice u/s 143(2) dated 15.06.2017 and notice u/s 142(1) dated 29.11.2017 were issued and duly served to the assessee. On 30.03.2017, the Assessing Officer Ward-15(2), Kolkata has given reasons which are as under :
Sunayana Commercial Pvt. Ltd. 3 Thereafter the Assessing Officer made disallowance u/s 14A towards ₹5,84,041/-.
Sunayana Commercial Pvt. Ltd. 4
The Pr. CIT vide notices dated 19.03.2020, 05.03.2020 u/s 263 of the Income Tax Act, 1961 asked the assessee as to why order u/s 263 should not be passed setting aside the assessment order wherein the transaction relating to share premium was not examined by the Assessing Officer u/s 143(3)/147 of the Act. The Pr. CIT vide order dated 15.12.2017 directed the Assessing Officer to examine and consider the evidences and decide the issue afresh and thus set aside the earlier directions given u/s 143(3) r.w.s. 147 of the Act.
Being aggrieved by the order u/s 263 passed by the Pr. CIT, the assessee is before us. 6. The Ld. AR submitted that on 19.03.2020, the Pr. CIT-11, Mumbai has dropped the 263 proceedings for technical reasons. Besides this, the Ld. AR pointed out that the Assessing Officer vide notice dated 29.11.2017 issued u/s 142(1) has specifically asked copy of all bank statements specifying name and address of bank branch along with the reconciliation for the period of issue if any as well as audited annual accounts for the financial year 2010-11 as well as letter dated 05.12.2017. The assessee has given copy of bank statement as well as nature of business in respect of investment in relation to quoted and un-quoted shares to the Assessing Officer. The Ld. AR submitted that all the relevant material in respect of identity, genuineness and creditworthiness of the transactions relating to share premium received by the assessee from M/s Gokul Commodities Pvt. Ltd. were before the Assessing Officer and the same was properly examined and therefore was never doubted by the Assessing Officer as the assessee has explained the transactions as per the law. Thus the Ld. AR relied upon the following decisions: CIT v. Software Consultants [(341 ITR 240 (Del-HC)] Sunayana Commercial Pvt. Ltd. 5 Gigabyte Technology (India) Pvt. Ltd. v. CIT Tax Appeal No. 77 of 2015 Westlife Development Ltd. v. PCIT-5, 88 taxmann.com 439 (Mum-ITAT) Krishan Kumar Saraf v. CIT ITA No. 4562/Del/2011 Inder Kumar Bachani (HUF) v. ITO 94 ITD 131 (Coch-ITAT) CIT v. Shri Ram Singh (2008) 217 CTR 345 (Rajasthan-HC) CIT v Double Dot Finance Ltd. [2013] 31 taxammn.com 352 (Bom-HC) CIT v. Jet Airways (I) Ltd. [2010] 195 Taxman 117 (Bom-HC) 7. The Ld. DR relied upon the order of the Pr. CIT passed u/s 263. The Ld. DR submitted that the Assessing Officer has not verified the share transactions and therefore, the Pr. CIT has rightly invoked the revisionary power u/s 263.
8. We have head both the parties and perused all the relevant material available on record. The reopening was specifically in respect of larger value multiple credits by cash relating to M/s Gokul Commodities Pvt. Ltd. as well as M/s Gajendra Textiles. The Assessing Officer at the time of reopening has specifically asked the query related to bank statements specifying name and address of bank branch along with reconciliation for the period of issue as well as tax audit report Form No. 3CEB and nature of business. The Ld. AR vide letter dated 05.12.2017 and other letter dated Nil has given the bank statement as well as the nature of business more particularly that of investment in quoted and unquoted shares to the Assessing Officer at that time. The cash credits were properly explained by the assessee which was received from M/s Gokul Commodities Pvt. Ltd. thereby explaining that the assessee had purchased and sold equity shares of various quoted and unquoted shares during year for which the details of the parties from whom the investment were bought/sold and payment made. This was also part of Sunayana Commercial Pvt. Ltd. 6 the evidences produced before the Assessing Officer. Merely not commenting on the details in the assessment order u/s 143(3) r.w.s. 147 by the Assessing Officer does not amount to non-application of mind or non-verification and cannot be treated the assessment order being erroneous and prejudicial to the interest of the Revenue. The Assessing Officer after verifying all the documents more specifically mentioned in the reply filed by the assessee along with audited accounts has taken cognizance and made the disallowance u/s 14A r.w. Rule 8D. Therefore, the interest of the Revenue was protected by the Assessing Officer by taking cognizance of the evidences produced before the Assessing Officer by the assessee. It is to be noted that Section 263 is not a mechanism available for the Principal Commissioner of Income Tax for taking second opinion wherein the fact were already examined by the Assessing Officer. In this particular case, the Pr. CIT has given the different opinion and different treatment to the share investment made by the assessee which amounts to second opinion. This is not permissible u/s 263 as the assessment order does not amount to erroneous and prejudicial to the interest of the Revenue. Hence, the order u/s 263 does not sustain and the appeal of the assessee is allowed.