M/S BHAGWATI VINTRADE PRIVATE LIMITED ,KOLKATA vs. I.T.O.,WARD-10(4), KOLKATA

The facts of the case are brought out at page 1 of the assessment order. This is extracted for ready reference:- “In the instant case Assessee Company had filed its return of Income for the A.V. 2013-2014 declaring total loss at Rs.96,30,335/- on 26.09.2013. The same was processed u/s-143(1) of the I.T. Act, 61 on the returned income. Subsequently, the case was selected for scrutiny through CASS. Accordingly, statutory notices u/s 143(2) dated 02.09.2014 and u/s-142(1) dated 09.07.2015 of the I.T. Act, 61 were issued and served upon the Assessee Company asking to produce the relevant supporting documentary evidences required to produce in respect of the return of income. Pursuant to the notices Mr. Rajesh Agarwal, A/R appeared and submitted documents from time to time. Finally, the case was completed u/s-143(3) of the I.T. Act, 61 on 04.02.2016 determining assessed income at Rs.5,04,94,158/- with the following addition.”

Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited 3. Thereafter the Assessing Officer noted each para of the order of the l Thereafter the Assessing Officer noted each para of the order of the l Thereafter the Assessing Officer noted each para of the order of the ld. Pr. CIT passed u/s 263 of the Act on 23/08/2016 called for information and documents. passed u/s 263 of the Act on 23/08/2016 called for information and documents. passed u/s 263 of the Act on 23/08/2016 called for information and documents. Statement was also recorded on oath from the share applicant company. Thereafter, Statement was also recorded on oath from the share applicant company. Thereafter, Statement was also recorded on oath from the share applicant company. Thereafter, the Assessing Officer completed the assessment by holding as follows: the Assessing Officer completed the assessment by holding as follows:- - “After careful consideration of all the documentary evidences submitted on behalf of the consideration of all the documentary evidences submitted on behalf of the consideration of all the documentary evidences submitted on behalf of the Assessee Company as well as by the share holding companies especially bank statement Assessee Company as well as by the share holding companies especially bank statement Assessee Company as well as by the share holding companies especially bank statement and statement recorded under oath the share capital and share premium brought into and statement recorded under oath the share capital and share premium brought into and statement recorded under oath the share capital and share premium brought into books of a/c abiding by the principles of accounting as per GAAP by the Assessee abiding by the principles of accounting as per GAAP by the Assessee abiding by the principles of accounting as per GAAP by the Assessee Company. In this context, all kinds of enquiries have been made whatever is humanly possible In this context, all kinds of enquiries have been made whatever is humanly possible In this context, all kinds of enquiries have been made whatever is humanly possible within a short period. It is also stated that departmental inspector attached to this within a short period. It is also stated that departmental inspector attached to this within a short period. It is also stated that departmental inspector attached to this charge was deputed to enquire about the existence of the share holding company on test was deputed to enquire about the existence of the share holding company on test was deputed to enquire about the existence of the share holding company on test check basis with a direction to collect information about activities are being performed check basis with a direction to collect information about activities are being performed check basis with a direction to collect information about activities are being performed by them if possible. The inspector has visited three/four addresses of the share Allott by them if possible. The inspector has visited three/four addresses of the share Allott by them if possible. The inspector has visited three/four addresses of the share Allottee Companies and submitted his enquiry reports supporting the existence of the Companies and submitted his enquiry reports supporting the existence of the Companies and submitted his enquiry reports supporting the existence of the entities/companies which are placed in the records. It is also seen that all the share entities/companies which are placed in the records. It is also seen that all the share entities/companies which are placed in the records. It is also seen that all the share holding companies have been filing its return of income regularly with their holding companies have been filing its return of income regularly with their holding companies have been filing its return of income regularly with their jurisdictional charges. Moreover, it is already stated above (in supra) that share l charges. Moreover, it is already stated above (in supra) that share l charges. Moreover, it is already stated above (in supra) that share premium. In fact any adverse inference only can be drawn if anything found wrong from the books In fact any adverse inference only can be drawn if anything found wrong from the books In fact any adverse inference only can be drawn if anything found wrong from the books of a/c maintained by the Assessee Company or any third party confirmation available in of a/c maintained by the Assessee Company or any third party confirmation available in of a/c maintained by the Assessee Company or any third party confirmation available in black and white then only share capital or share premium amount subscribed by the ack and white then only share capital or share premium amount subscribed by the ack and white then only share capital or share premium amount subscribed by the share holding entities/companies would be treated as unexplained credit as per share holding entities/companies would be treated as unexplained credit as per share holding entities/companies would be treated as unexplained credit as per provision u/s 68 of the I.T. Act, 61 and may be entangled accordingly for taxation. provision u/s 68 of the I.T. Act, 61 and may be entangled accordingly for taxation. provision u/s 68 of the I.T. Act, 61 and may be entangled accordingly for taxation. Otherwise, it is next to impossible to prove any credit clearing transaction transacted is next to impossible to prove any credit clearing transaction transacted is next to impossible to prove any credit clearing transaction transacted through electronic system as unexplained credit and should not be taxed within the through electronic system as unexplained credit and should not be taxed within the through electronic system as unexplained credit and should not be taxed within the purview of I.T. Act, 61. Unless department showing that the investment made by purview of I.T. Act, 61. Unless department showing that the investment made by purview of I.T. Act, 61. Unless department showing that the investment made by subscribers actually emanated from coffers of assessee to be treated as undisclosed y emanated from coffers of assessee to be treated as undisclosed y emanated from coffers of assessee to be treated as undisclosed income of the assessee. No such transaction has been identified from the documentary income of the assessee. No such transaction has been identified from the documentary income of the assessee. No such transaction has been identified from the documentary evidence collected from various enquiries especially in the bank statement of any share evidence collected from various enquiries especially in the bank statement of any share evidence collected from various enquiries especially in the bank statement of any share holding companies where from adverse inference can be drawn. It is observed that the where from adverse inference can be drawn. It is observed that the where from adverse inference can be drawn. It is observed that the shareholders are private limited companies, registered with the Ministry of Corporate, shareholders are private limited companies, registered with the Ministry of Corporate, shareholders are private limited companies, registered with the Ministry of Corporate, regularly filing its return of income stating the Fairview state of affairs and letter issued regularly filing its return of income stating the Fairview state of affairs and letter issued regularly filing its return of income stating the Fairview state of affairs and letter issued u/s-133(6) and summon/s (6) and summon/s-131 of the LT. Act, 61 were duly received. So, it may be 131 of the LT. Act, 61 were duly received. So, it may be established that the share holding companies have an established identity. Moreover, established that the share holding companies have an established identity. Moreover, established that the share holding companies have an established identity. Moreover, the directors of all the companies have responded to summons u/s the directors of all the companies have responded to summons u/s the directors of all the companies have responded to summons u/s-131 with the evidences as asked for. Moreover, addresses have been for. Moreover, addresses have been verified with the PAN database verified with the PAN database and found correct. Statement of all the directors of share holding companies have been and found correct. Statement of all the directors of share holding companies have been and found correct. Statement of all the directors of share holding companies have been recorded and duly placed on the records. The case is heard and discussed.” recorded and duly placed on the records. The case is heard and discussed.” recorded and duly placed on the records. The case is heard and discussed.”

The ld. Pr. CIT, issued a showcause notice u/s 263 of the Act dt. 03/02/2020, The ld. Pr. CIT, issued a showcause notice u/s 263 of the Act dt. 03/02/2020, The ld. Pr. CIT, issued a showcause notice u/s 263 of the Act dt. 03/02/2020, proposing to revise the assessment order passed u/s 263/143(3) of the Act dt. proposing to revise the assessment order passed u/s 263/143(3) of the Act dt. proposing to revise the assessment order passed u/s 263/143(3) of the Act dt. 22/12/2017. After considering the detailed reply given by the assessee on After considering the detailed reply given by the assessee on After considering the detailed reply given by the assessee on 12/02/2020, the ld. Pr. CIT at para 9 held as follows: T at para 9 held as follows:-

Aggrieved the assessee is in appeal before us. Aggrieved the assessee is in appeal before us.

The ld. Counsel for the assessee submitted that the assessee company is The ld. Counsel for the assessee submitted that the assessee company is The ld. Counsel for the assessee submitted that the assessee company is engaged in the business of manufacturing of rice and engaged in the business of manufacturing of rice and that it had turnover of Rs.57.98 it had turnover of Rs.57.98 Crores for the Assessment Year 2013 Crores for the Assessment Year 2013-14 and Rs.67.98 Lakhs profit during this 14 and Rs.67.98 Lakhs profit during this assessment year. It was further submitted that in the immediately previous year, the year. It was further submitted that in the immediately previous year, the year. It was further submitted that in the immediately previous year, the turnover was Rs.30.99 Crores and the profit was Rs.54.30 Lakhs. I turnover was Rs.30.99 Crores and the profit was Rs.54.30 Lakhs. I turnover was Rs.30.99 Crores and the profit was Rs.54.30 Lakhs. It was further submitted that the assessee has share capital and free reserves of Rs. submitted that the assessee has share capital and free reserves of Rs. 24.59 Lakhs 24.59 Lakhs and Rs.8.07 Crores, respectively, in the immediately preceding year and that the breakup Rs.8.07 Crores, respectively, in the immediately preceding year and that the breakup Rs.8.07 Crores, respectively, in the immediately preceding year and that the breakup value of shares was of face value of face value of Rs.10/- at the beginning of the year was Rs.338.37 ear was Rs.338.37 ps. He further pointed out that the share capital and free reserves at the closing of the . He further pointed out that the share capital and free reserves at the closing of the . He further pointed out that the share capital and free reserves at the closing of the year had a break up value of share a break up value of share at Rs.352/- on a face value of Rs.10/ on a face value of Rs.10/- per share. He submitted that during the year, the assessee had issued 1, He submitted that during the year, the assessee had issued 1,49,391shares to 49,391shares to M/s. Lakshmi Dealmark Private Limited at Rs.338/ M/s. Lakshmi Dealmark Private Limited at Rs.338/- per share, which included face per share, which included face value of Rs.10/- and premium of Rs.328/ and premium of Rs.328/-. He submitted that the share value got . He submitted that the share value got approved from the valuer and approved from the valuer and that all these shares were allotted to a group co these shares were allotted to a group concern of the assessee and not to any outside person/party and not to any outside person/party. He pointed out that the capital . He pointed out that the capital and reserves of M/s. Lakshmi Dealmark Private Limited was Rs.14.65 Crores. He and reserves of M/s. Lakshmi Dealmark Private Limited was Rs.14.65 Crores. He and reserves of M/s. Lakshmi Dealmark Private Limited was Rs.14.65 Crores. He submitted that all these facts with documents and details were filed before he submitted that all these facts with documents and details were filed before he submitted that all these facts with documents and details were filed before he Assessing Officer and despite the share holder company being a group company g Officer and despite the share holder company being a group company g Officer and despite the share holder company being a group company having creditworthiness and despite the fact that the share premium having creditworthiness and despite the fact that the share premium having creditworthiness and despite the fact that the share premium was genuine Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited and supported by facts and was and supported by facts and was accepted, the addition was made by the Assessing accepted, the addition was made by the Assessing Officer in the original assessment order passed u/s 143(3) of the Act essment order passed u/s 143(3) of the Act. The ld. Pr. CIT, . The ld. Pr. CIT, set aside this assessment u/s 263 of the Act on 28/03/2016, giving certain directions set aside this assessment u/s 263 of the Act on 28/03/2016, giving certain directions set aside this assessment u/s 263 of the Act on 28/03/2016, giving certain directions to the Assessing Officer. He argued that . He argued that and the Assessing Officer in a fresh and the Assessing Officer in a fresh assessment proceedings undertaken in pursuance of the assessment proceedings undertaken in pursuance of the order passed u/s 263 of the order passed u/s 263 of the Act had meticulously followed the directions given by the ld. Pr. CIT had meticulously followed the directions given by the ld. Pr. CIT had meticulously followed the directions given by the ld. Pr. CIT and had completed a fresh assessment order u/s 143(3)/263 of the A completed a fresh assessment order u/s 143(3)/263 of the Act. He submitted that the . He submitted that the Director of the shareholder company appeared in response to summons u/s 131 of Director of the shareholder company appeared in response to summons u/s 131 of Director of the shareholder company appeared in response to summons u/s 131 of the Act before the Assessing Officer before the Assessing Officer and filed all necessary details and evidences in and filed all necessary details and evidences in support of the genuineness of the genuineness of the transactions and to prove the i and to prove the identity and creditworthiness of the share applicant companies creditworthiness of the share applicant companies. He took this Bench through each . He took this Bench through each of the directions of the ld. Pr. CIT and the action of the Assessing Officer in the second of the directions of the ld. Pr. CIT and the action of the Assessing Officer in the second of the directions of the ld. Pr. CIT and the action of the Assessing Officer in the second assessment proceedings and argued that these direct assessment proceedings and argued that these directions were meticulou ions were meticulously followed and the Assessing Officer had no jurisdiction to go beyond these directions. For the and the Assessing Officer had no jurisdiction to go beyond these directions. For the and the Assessing Officer had no jurisdiction to go beyond these directions. For the proposition that the Assessing Officer cannot go beyond the directions of the Pr. CIT, proposition that the Assessing Officer cannot go beyond the directions of the Pr. CIT, proposition that the Assessing Officer cannot go beyond the directions of the Pr. CIT, he relied on the judgment of the Hon’ble Delhi High Court in the case o judgment of the Hon’ble Delhi High Court in the case o judgment of the Hon’ble Delhi High Court in the case of CIT vs. K.L. Ahuja reported in [2001] 250 ITR 763 250 ITR 763 (Delhi).

The ld. Counsel for the assessee further took this Bench through the impugned The ld. Counsel for the assessee further took this Bench through the impugned The ld. Counsel for the assessee further took this Bench through the impugned order passed u/s 263 of the Act dt. 21/12/2020 and gave a comparative chart on the order passed u/s 263 of the Act dt. 21/12/2020 and gave a comparative chart on the order passed u/s 263 of the Act dt. 21/12/2020 and gave a comparative chart on the actions of the Assessing Office actions of the Assessing Officer and the reasons given in the showcause notice to r and the reasons given in the showcause notice to prove that the ld. Pr. CIT was factually incorrect in his observations in his order u/s prove that the ld. Pr. CIT was factually incorrect in his observations in his order u/s prove that the ld. Pr. CIT was factually incorrect in his observations in his order u/s 263 of the Act. He relied on a number of case 263 of the Act. He relied on a number of case-law for the proposition that, in law for the proposition that, in an assessment proceedings as a consequ assessment proceedings as a consequence to a Section 263 order, the Assessing , the Assessing Officer cannot travel beyond the directions given to him by the ld. Pr. CIT Officer cannot travel beyond the directions given to him by the ld. Pr. CIT Officer cannot travel beyond the directions given to him by the ld. Pr. CIT. He further argued that it is not a case of lack of enquiry and that the Assessing Officer has argued that it is not a case of lack of enquiry and that the Assessing Officer has argued that it is not a case of lack of enquiry and that the Assessing Officer has arrived at a plausible decision based on e arrived at a plausible decision based on examination of evidence and that the revision xamination of evidence and that the revision is bad in law.

The ld. Counsel for the assessee ld. Counsel for the assessee relied on the decision of this Bench of the relied on the decision of this Bench of the Tribunal in the case of M/s. Infracom Pvt. Ltd. vs. ITO in M/s. Infracom Pvt. Ltd. vs. ITO in ITA No. 896/Kol/2019, M/s. Infracom Pvt. Ltd. vs. ITO in ITA No. 896/Kol/2019, Assessment Year 2012-13, order dt 13, order dt. 18/03/2020 and Amritrashi Infra(P) Ltd. vs Amritrashi Infra(P) Ltd. vs Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited Pr.C.I.T.-4 in order dt. 12/08/2020 in ITA No. 838/Kol/2019, order dt. 12/08/2020 and submitted that the issue and submitted that the issue is squarely covered in his favour. is squarely covered in his favour. 8.1. Even on merits, he submitted that based on the facts no addition can be made Even on merits, he submitted that based on the facts no addition can be made Even on merits, he submitted that based on the facts no addition can be made u/s 68 of the Act, in this case and the ld. Pr. CIT of the Act, in this case and the ld. Pr. CIT, without relevance to the facts of the , without relevance to the facts of the case passed the order u/s 263 of the Act, directing addition wherever share cap case passed the order u/s 263 of the Act, directing addition wherever share cap case passed the order u/s 263 of the Act, directing addition wherever share capital is received by the company from a group company and where the share premium received by the company from a group company and where the share premium received by the company from a group company and where the share premium charged is perfectly justified based of the audited financial statement of the assessee perfectly justified based of the audited financial statement of the assessee perfectly justified based of the audited financial statement of the assessee company. He prayed that the order passed by the ld. Pr. CIT u/s 263 of the Act be company. He prayed that the order passed by the ld. Pr. CIT u/s 263 of the Act be company. He prayed that the order passed by the ld. Pr. CIT u/s 263 of the Act be quashed.

The ld. D/R, on the other hand, opposed the contentions of the assessee and The ld. D/R, on the other hand, opposed the contentions of the assessee and The ld. D/R, on the other hand, opposed the contentions of the assessee and submitted that the Assessing Officer has merely that the Assessing Officer has merely collected information and not information and not applied his mind to the facts of the case and had simply accepted the arguments of s mind to the facts of the case and had simply accepted the arguments of s mind to the facts of the case and had simply accepted the arguments of the assessee. He referred to para 5 of the ld. Pr. CIT’s order at page 11 and submitted the assessee. He referred to para 5 of the ld. Pr. CIT’s order at page 11 and submitted the assessee. He referred to para 5 of the ld. Pr. CIT’s order at page 11 and submitted that a clear finding has been given that the details and documents were not examined ding has been given that the details and documents were not examined ding has been given that the details and documents were not examined judiciously and that there were not enough enquiries made to reach a logical judiciously and that there were not enough enquiries made to reach a logical judiciously and that there were not enough enquiries made to reach a logical conclusion. He argued that the Assessing Officer has not discussed about the shares conclusion. He argued that the Assessing Officer has not discussed about the shares conclusion. He argued that the Assessing Officer has not discussed about the shares issued and shares subscribed and had also not worked out the shares issued with ed and had also not worked out the shares issued with ed and had also not worked out the shares issued with premium and shares issued on face value without premium. He pointed out that the premium and shares issued on face value without premium. He pointed out that the premium and shares issued on face value without premium. He pointed out that the assessment order was passed hurriedly and the assessment proceedings assessment order was passed hurriedly and the assessment proceedings assessment order was passed hurriedly and the assessment proceedings were not completed in a casual manner and without fo completed in a casual manner and without following the procedures of quasi judicial llowing the procedures of quasi judicial proceedings. He took this Bench through the order of the ld. Pr. CIT u/s 263 of the Act He took this Bench through the order of the ld. Pr. CIT u/s 263 of the Act He took this Bench through the order of the ld. Pr. CIT u/s 263 of the Act and supported the same. He relied on the case and supported the same. He relied on the case-law cited by the ld. Pr. CIT in his order law cited by the ld. Pr. CIT in his order. He submitted that the ld. Pr. CIT can that the ld. Pr. CIT can invoke his powers u/s 263 of the Act invoke his powers u/s 263 of the Act as the Assessing Officer occupies the position of an investigator and an adjudicator Assessing Officer occupies the position of an investigator and an adjudicator Assessing Officer occupies the position of an investigator and an adjudicator in discharge of his functions and when the Assessing Officer does not properly his functions and when the Assessing Officer does not properly his functions and when the Assessing Officer does not properly discharge his functions, it would be a case of the asse it would be a case of the assessment order being ssment order being erroneous to the extent it is prejudicial to the interest of the revenue. He prayed that the order of prejudicial to the interest of the revenue. He prayed that the order of prejudicial to the interest of the revenue. He prayed that the order of the ld. Pr. CIT be upheld.

This Bench of the Tribunal under identical circum This Bench of the Tribunal under identical circumstances, in the case of stances, in the case of Amritrashi Infra Pvt. Ltd. vs. PCIT in dt. 12/08/2020 Amritrashi Infra Pvt. Ltd. vs. PCIT in ITA No. 838/Kol/2019, dt. 12/08/2020 Amritrashi Infra Pvt. Ltd. vs. PCIT in ITA No. 838/Kol/2019, dt. 12/08/2020, held as follows:- ““46. In the light of the afore In the light of the afore-cited judicial precedents, let us examine the cited judicial precedents, let us examine the case in hand and find out whether pursuant to the specific case in hand and find out whether pursuant to the specific direction of First Ld. Pr. direction of First Ld. Pr. CIT, the second AO has discharged his role as an investigator in respect of share CIT, the second AO has discharged his role as an investigator in respect of share CIT, the second AO has discharged his role as an investigator in respect of share capital and premium collected by the assessee or whether the AO failed to enquire capital and premium collected by the assessee or whether the AO failed to enquire capital and premium collected by the assessee or whether the AO failed to enquire on this issue and whether his re on this issue and whether his re-assessment/second assessment order is a plausible der is a plausible view or it can be termed as an unsustainable view in law. We on a conjoint reading view or it can be termed as an unsustainable view in law. We on a conjoint reading view or it can be termed as an unsustainable view in law. We on a conjoint reading of the First Revisional Order of the First Pr. CIT dated 23.08.2016 and the of the First Revisional Order of the First Pr. CIT dated 23.08.2016 and the of the First Revisional Order of the First Pr. CIT dated 23.08.2016 and the reassessment /Second assessment of the AO dated 07.12.2016, the following fact reassessment /Second assessment of the AO dated 07.12.2016, the following fact reassessment /Second assessment of the AO dated 07.12.2016, the following facts can be discerned:- (a)The First Ld. Pr. CIT has recorded a finding after perusal of the first (a)The First Ld. Pr. CIT has recorded a finding after perusal of the first (a)The First Ld. Pr. CIT has recorded a finding after perusal of the first assessment records/folder that during the first round of scrutiny proceeding, the assessment records/folder that during the first round of scrutiny proceeding, the assessment records/folder that during the first round of scrutiny proceeding, the assessee company produced the following documents before the first AO in the assessee company produced the following documents before the first AO in the assessee company produced the following documents before the first AO in the original assessment to satisfy the AO in respect of identity, creditworthiness and original assessment to satisfy the AO in respect of identity, creditworthiness and original assessment to satisfy the AO in respect of identity, creditworthiness and genuineous of share subscribers: genuineous of share subscribers:- (i) audited financial statements; audited financial statements; (ii) copy of Form filed with the ROC; copy of Form filed with the ROC; (iii) copy of PAN Card of the assessee company; copy of PAN Card of the assessee company; (iv) details and copy of share details and copy of share applicants; (v) bank statement reflecting the transaction; bank statement reflecting the transaction; (vi) records relating to investors in order to establish identity, records relating to investors in order to establish identity, records relating to investors in order to establish identity, genuineness and creditworthiness of the share subscribers. genuineness and creditworthiness of the share subscribers. genuineness and creditworthiness of the share subscribers.

We note that the First Ld. Pr. CIT in his first revisional order, found th We note that the First Ld. Pr. CIT in his first revisional order, found th We note that the First Ld. Pr. CIT in his first revisional order, found that AO in the first assessment proceedings though has been provided with the aforesaid in the first assessment proceedings though has been provided with the aforesaid in the first assessment proceedings though has been provided with the aforesaid documents has not examined these documents, which according to him, should have documents has not examined these documents, which according to him, should have documents has not examined these documents, which according to him, should have been carried out by the AO. The First Ld. Pr. CIT at para (4) of his first revisional been carried out by the AO. The First Ld. Pr. CIT at para (4) of his first revisional been carried out by the AO. The First Ld. Pr. CIT at para (4) of his first revisional

Thereafter, the ld. Pr. CIT was pleased to direct “…………… Thereafter, the ld. Pr. CIT was pleased to direct “……………assessment order assessment order passed on 26.03.2015 is set aside de novo with the direction to the AO to carry out passed on 26.03.2015 is set aside de novo with the direction to the AO to carry out passed on 26.03.2015 is set aside de novo with the direction to the AO to carry out proper examination of books of account and bank statement of the assessee as well proper examination of books of account and bank statement of the assessee as well proper examination of books of account and bank statement of the assessee as well as the investor. The AO is also directed to examine the source of share application, nvestor. The AO is also directed to examine the source of share application, nvestor. The AO is also directed to examine the source of share application, entity of investor and its genuineness” entity of investor and its genuineness”. (emphasis given by us). He also directed that . (emphasis given by us). He also directed that the assessment proceedings to be initiated at the earliest and to be completed the assessment proceedings to be initiated at the earliest and to be completed the assessment proceedings to be initiated at the earliest and to be completed without waiting for time bar limit. With the aforesaid specific direction, the First ng for time bar limit. With the aforesaid specific direction, the First ng for time bar limit. With the aforesaid specific direction, the First Ld. Pr. CIT has set aside the first original assessment order dated 26 Ld. Pr. CIT has set aside the first original assessment order dated 26-03 03-2015.

So we note that the second AO was specifically directed by the First Ld. Pr. So we note that the second AO was specifically directed by the First Ld. Pr. So we note that the second AO was specifically directed by the First Ld. Pr. CIT to carry out the followings actions in addition to de ollowings actions in addition to de-novo assessment which novo assessment which means the second AO is free to assess the income of assessee afresh, however, he has means the second AO is free to assess the income of assessee afresh, however, he has means the second AO is free to assess the income of assessee afresh, however, he has to do the following specific actions as directed in respect of share to do the following specific actions as directed in respect of share-applicants who applicants who applied for shares in assesse applied for shares in assessee-company. The specific directions of Ld. Pr CIT to AO company. The specific directions of Ld. Pr CIT to AO are as under: (i) To carry out proper examination of the books of accounts and bank account To carry out proper examination of the books of accounts and bank account To carry out proper examination of the books of accounts and bank account of the assessee; ii) To carry out proper examination of the books of accounts and bank account To carry out proper examination of the books of accounts and bank account To carry out proper examination of the books of accounts and bank account of the investors; iii) AO to examine the source of the share applicants; AO to examine the source of the share applicants; iv)The AO to examine the identity of the investor and its genuineness; iv)The AO to examine the identity of the investor and its genuineness; iv)The AO to examine the identity of the investor and its genuineness; Sl. Name of company CIN PAN ITR filed No for AY . 2012-13 1. M/s. K. R. Overseas Pvt. Ltd. M/s. K. R. Overseas Pvt. Ltd. U51109WB1994PTC061965 AACCK0101B AACCK0101B yes 2. M/s. Kakrania Trading Pvt. M/s. Kakrania Trading Pvt. U70101WB1994PTC062137 AABCK151611 AABCK151611 yes Ltd. 3. M/s. AmbalaTrafin Pvt. Ltd. M/s. AmbalaTrafin Pvt. Ltd. U67120WB1995PTCO74397 AACCA1184G AACCA1184G yes Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited 4. M/s. Subhiksha Pvt. Ltd. U52190WB2011PTC157073 AAPCS2068E AAPCS2068E yes 5. M/s. Shivarshi Construction Construction U45400WB2011PTC170957 AAQCS7848M AAQCS7848M yes Pvt. Ltd.

In the second round before the AO for de novo re In the second round before the AO for de novo re-assessment, the second AO assessment, the second AO as per the specific direction of the First Ld. Pr. CIT (supra), conducted the as per the specific direction of the First Ld. Pr. CIT (supra), conducted the as per the specific direction of the First Ld. Pr. CIT (supra), conducted the reassessment proceeding. As per the specific direction of Ld. First Pr. CIT, the Second reassessment proceeding. As per the specific direction of Ld. First Pr. CIT, the Second reassessment proceeding. As per the specific direction of Ld. First Pr. CIT, the Second AO firstly summoned the director of the assessee company Shri NavinTahin before mmoned the director of the assessee company Shri NavinTahin before mmoned the director of the assessee company Shri NavinTahin before him, who duly appeared and produced the books of account on 01.12.2016 and him, who duly appeared and produced the books of account on 01.12.2016 and him, who duly appeared and produced the books of account on 01.12.2016 and furnished the relevant details viz., (i) copy of ITR, (ii) audited accounts, (iii) details furnished the relevant details viz., (i) copy of ITR, (ii) audited accounts, (iii) details furnished the relevant details viz., (i) copy of ITR, (ii) audited accounts, (iii) details of directors, (iv) the details of the share details of the share-applicants, (v) details of business activity, applicants, (v) details of business activity, (vi) details of increase in share capital, (vii) Form 2, (viii) Form 5, (ix) bank (vi) details of increase in share capital, (vii) Form 2, (viii) Form 5, (ix) bank (vi) details of increase in share capital, (vii) Form 2, (viii) Form 5, (ix) bank statements evidencing payment through banking transaction, which fact the AO statements evidencing payment through banking transaction, which fact the AO statements evidencing payment through banking transaction, which fact the AO has acknowledged in the reas has acknowledged in the reassessment order. [And here we should keep in mind that sessment order. [And here we should keep in mind that the First Ld. Pr. CIT’s finding of fact after perusal of original assessment records the First Ld. Pr. CIT’s finding of fact after perusal of original assessment records the First Ld. Pr. CIT’s finding of fact after perusal of original assessment records that assessee in the first round before AO has produced PAN,ROC details, audited that assessee in the first round before AO has produced PAN,ROC details, audited that assessee in the first round before AO has produced PAN,ROC details, audited financial statements, details and co financial statements, details and copy of share applicants, bank statements py of share applicants, bank statements reflecting the transaction, records relating to investors to establish identity, reflecting the transaction, records relating to investors to establish identity, reflecting the transaction, records relating to investors to establish identity, creditworthiness & genuineness. And the finding of First Ld. Pr. CIT that assessee creditworthiness & genuineness. And the finding of First Ld. Pr. CIT that assessee creditworthiness & genuineness. And the finding of First Ld. Pr. CIT that assessee had discharged its onus by furnishing/documents befo had discharged its onus by furnishing/documents before the AO.]Secondly, after re the AO.]Secondly, after examining these documents, we also find that the second AO issued notices u/s. examining these documents, we also find that the second AO issued notices u/s. examining these documents, we also find that the second AO issued notices u/s. 133(6) of the Act to all the thirteen (13) share applicants and pursuant to the 133(6) of the Act to all the thirteen (13) share applicants and pursuant to the 133(6) of the Act to all the thirteen (13) share applicants and pursuant to the notice, all the shareholders have filed their respective (i) PAN de notice, all the shareholders have filed their respective (i) PAN details, (ii) CIN detail, tails, (ii) CIN detail, (iii) Audited Annual Report for FY 2011 (iii) Audited Annual Report for FY 2011-12 (AY 2012-13), (iv) ITR acknowledgment 13), (iv) ITR acknowledgment for AY 2012-13 which the AO acknowledges that he verified the same and thus we 13 which the AO acknowledges that he verified the same and thus we 13 which the AO acknowledges that he verified the same and thus we note that the identity of the investors were duly furnished by the asse note that the identity of the investors were duly furnished by the assessee’s director; ssee’s director; and the AO verified the veracity of the same from all the share applicants by issuing and the AO verified the veracity of the same from all the share applicants by issuing and the AO verified the veracity of the same from all the share applicants by issuing Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited notice u/s 133(6) of the Act and moreover it is common knowledge that in this notice u/s 133(6) of the Act and moreover it is common knowledge that in this notice u/s 133(6) of the Act and moreover it is common knowledge that in this computer/digital era, the AO on a click of the mouse, could have easily ver computer/digital era, the AO on a click of the mouse, could have easily ver computer/digital era, the AO on a click of the mouse, could have easily verified the identity of the share applicant which is available in the website of Ministry of identity of the share applicant which is available in the website of Ministry of identity of the share applicant which is available in the website of Ministry of Corporate Affairs and the ITR Acknowledgments filed by them, will enable the AO to Corporate Affairs and the ITR Acknowledgments filed by them, will enable the AO to Corporate Affairs and the ITR Acknowledgments filed by them, will enable the AO to cross verify and collect details from the AO of the respective share applicants a cross verify and collect details from the AO of the respective share applicants a cross verify and collect details from the AO of the respective share applicants and independently from the Revenue’s departmental data base. We note that all the independently from the Revenue’s departmental data base. We note that all the independently from the Revenue’s departmental data base. We note that all the share subscribing parties filed all the documents called for by the AO [PB share subscribing parties filed all the documents called for by the AO [PB share subscribing parties filed all the documents called for by the AO [PB-2] and were also examined by the AO along with audited accounts from which these details were also examined by the AO along with audited accounts from which these details were also examined by the AO along with audited accounts from which these details show their identity.

Thus, we note that the AO after verification as aforesaid, has not drawn any 51. Thus, we note that the AO after verification as aforesaid, has not drawn any 51. Thus, we note that the AO after verification as aforesaid, has not drawn any adverse opinion or doubted the adverse opinion or doubted the identity of the share applicants which view of AO is of the share applicants which view of AO is a possible view in the light of the documents referred to and we also by ap a possible view in the light of the documents referred to and we also by ap a possible view in the light of the documents referred to and we also by applying the presumption in section 114 of Indian Evidence Act 1872, we presume that the quasi presumption in section 114 of Indian Evidence Act 1872, we presume that the quasi presumption in section 114 of Indian Evidence Act 1872, we presume that the quasi- judicial act of the second AO have been regularly performed. Coming to the judicial act of the second AO have been regularly performed. Coming to the judicial act of the second AO have been regularly performed. Coming to the contention of Ld. CIT, DR, that order sheet maintained by the Second AO does not contention of Ld. CIT, DR, that order sheet maintained by the Second AO does not contention of Ld. CIT, DR, that order sheet maintained by the Second AO does not reveal that AO had issued notice u/s. 133(6) of the Act to the share subscribers, we l that AO had issued notice u/s. 133(6) of the Act to the share subscribers, we l that AO had issued notice u/s. 133(6) of the Act to the share subscribers, we note that the AO in his reassessment/second assessment order has clearly asserted note that the AO in his reassessment/second assessment order has clearly asserted note that the AO in his reassessment/second assessment order has clearly asserted that he had issued notice u/s. 133(6) of the Act to all the share applicants as that he had issued notice u/s. 133(6) of the Act to all the share applicants as that he had issued notice u/s. 133(6) of the Act to all the share applicants as directed by the First Ld. Pr. CIT and we note from the perusal of some letters written he First Ld. Pr. CIT and we note from the perusal of some letters written he First Ld. Pr. CIT and we note from the perusal of some letters written by the share applicants clearly referring to the AO’s sec. 133(6) notice (refer inter by the share applicants clearly referring to the AO’s sec. 133(6) notice (refer inter by the share applicants clearly referring to the AO’s sec. 133(6) notice (refer inter- alia page 32 of PB-I). So, the clear assertion of the Second AO in his order that I). So, the clear assertion of the Second AO in his order that I). So, the clear assertion of the Second AO in his order that pursuant to his issue of notice u/s. 133(6), he received the documents called for is issue of notice u/s. 133(6), he received the documents called for is issue of notice u/s. 133(6), he received the documents called for cannot be disbelieved merely because he did not mention this event in the order cannot be disbelieved merely because he did not mention this event in the order cannot be disbelieved merely because he did not mention this event in the order sheet. Moreover, the assessee or the share applicants does not have any control sheet. Moreover, the assessee or the share applicants does not have any control sheet. Moreover, the assessee or the share applicants does not have any control over the order sheet main over the order sheet maintained by the AO and the failure of AO to mention this tained by the AO and the failure of AO to mention this action cannot be a reason to disbelieve the AO’s assertion that he issued notice u/s. action cannot be a reason to disbelieve the AO’s assertion that he issued notice u/s. action cannot be a reason to disbelieve the AO’s assertion that he issued notice u/s. 133(6) of the Act. Moreover, we have to examine the re 133(6) of the Act. Moreover, we have to examine the re-assessment/second assessment/second assessment order of AO and not the order assessment order of AO and not the order-sheet maintained by him which has not heet maintained by him which has not been negatively commented upon by the Second Ld Pr CIT and it is not the fault for been negatively commented upon by the Second Ld Pr CIT and it is not the fault for been negatively commented upon by the Second Ld Pr CIT and it is not the fault for which the Ld Pr CIT exercised his power u/s 263 of the Act. Thus, we note that which the Ld Pr CIT exercised his power u/s 263 of the Act. Thus, we note that which the Ld Pr CIT exercised his power u/s 263 of the Act. Thus, we note that second AO issued sec. 133(6) notice and collected documen second AO issued sec. 133(6) notice and collected documents running more than ts running more than 352 pages. Moreover, the First Ld. Pr. CIT while setting aside the first AO’s order has 352 pages. Moreover, the First Ld. Pr. CIT while setting aside the first AO’s order has 352 pages. Moreover, the First Ld. Pr. CIT while setting aside the first AO’s order has returned a finding that assessee in the first round itself has filed the relevant returned a finding that assessee in the first round itself has filed the relevant returned a finding that assessee in the first round itself has filed the relevant documents to prove the identity, creditworthiness and genuineness documents to prove the identity, creditworthiness and genuineness of the share capital and that assessee had discharged its onus by filing the same. So we find that capital and that assessee had discharged its onus by filing the same. So we find that capital and that assessee had discharged its onus by filing the same. So we find that during the second round, the AO issued notices to share during the second round, the AO issued notices to share-holders u/s. 133(6) and holders u/s. 133(6) and after perusing their replies and supporting documents and thereafter having after perusing their replies and supporting documents and thereafter having after perusing their replies and supporting documents and thereafter having verified their veracity, the second AO was satisfied with the explanation of assessee verified their veracity, the second AO was satisfied with the explanation of assessee verified their veracity, the second AO was satisfied with the explanation of assessee in respect to the nature and source of share capital which view of second AO cannot in respect to the nature and source of share capital which view of second AO cannot in respect to the nature and source of share capital which view of second AO cannot be faulted. And we also note that all the share be faulted. And we also note that all the share-holders are regular income tax holders are regular income tax assessee’s. Therefore in the light of the aforesaid documents discussed their ee’s. Therefore in the light of the aforesaid documents discussed their ee’s. Therefore in the light of the aforesaid documents discussed their identity cannot be disbelieved and the AO’s satisfaction in respect of identity of the cannot be disbelieved and the AO’s satisfaction in respect of identity of the cannot be disbelieved and the AO’s satisfaction in respect of identity of the shareholders is a possible view and cannot be termed as unsustainable in law or shareholders is a possible view and cannot be termed as unsustainable in law or shareholders is a possible view and cannot be termed as unsustainable in law or facts.

Coming to the to the creditworthiness of the shareholders, our attention was of the shareholders, our attention was drawn to the balance sheet of the shareholders (PB drawn to the balance sheet of the shareholders (PB- 2) which was filed before the 2) which was filed before the AO and the Ld. Pr. CIT and we note that their source of investment and net worth as AO and the Ld. Pr. CIT and we note that their source of investment and net worth as AO and the Ld. Pr. CIT and we note that their source of investment and net worth as per balance sheet as on 31 per balance sheet as on 31.03.2012 as well as the sum invested by them in the .03.2012 as well as the sum invested by them in the assessee is discernible as under: assessee is discernible as under:

So, from a perusal of the above chart, we note that the assessee and the So, from a perusal of the above chart, we note that the assessee and the So, from a perusal of the above chart, we note that the assessee and the shareholders have brought to the notice of Second AO that they (share subscribers) shareholders have brought to the notice of Second AO that they (share subscribers) shareholders have brought to the notice of Second AO that they (share subscribers) have enough net worth to invest in the assessee company and the share subscribing have enough net worth to invest in the assessee company and the share subscribing have enough net worth to invest in the assessee company and the share subscribing companies pursuant to the AO’s notice u/s. 133(6) of the Act have furnished their ant to the AO’s notice u/s. 133(6) of the Act have furnished their ant to the AO’s notice u/s. 133(6) of the Act have furnished their respective audited accounts from which the aforesaid facts are clearly discernible respective audited accounts from which the aforesaid facts are clearly discernible respective audited accounts from which the aforesaid facts are clearly discernible and moreover the share subscribers have also filed before the second AO the source and moreover the share subscribers have also filed before the second AO the source and moreover the share subscribers have also filed before the second AO the source Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited from which they subscribed to shares of assessee (though not required as per law in ibed to shares of assessee (though not required as per law in ibed to shares of assessee (though not required as per law in force for AY 2012-13), bank statement, audited balance sheet etc except M/s 13), bank statement, audited balance sheet etc except M/s 13), bank statement, audited balance sheet etc except M/s Maharaja and M/s Sristi Sales. Thus the assessee had discharged the onus on it Maharaja and M/s Sristi Sales. Thus the assessee had discharged the onus on it Maharaja and M/s Sristi Sales. Thus the assessee had discharged the onus on it about the creditworthiness of the share about the creditworthiness of the share- holders. So we note that the source of the holders. So we note that the source of the investments has been clearly brought to the notice of the second AO during the investments has been clearly brought to the notice of the second AO during the investments has been clearly brought to the notice of the second AO during the assessment/reassessment proceedings. Further, the bank statements of all the assessment/reassessment proceedings. Further, the bank statements of all the assessment/reassessment proceedings. Further, the bank statements of all the shareholders as well as that of assessee were filed b shareholders as well as that of assessee were filed before the AO, which revealed efore the AO, which revealed that the share capital and premium have been subscribed by them through banking that the share capital and premium have been subscribed by them through banking that the share capital and premium have been subscribed by them through banking channel (NEFT or cheque) which goes on to show that the assessee has discharged channel (NEFT or cheque) which goes on to show that the assessee has discharged channel (NEFT or cheque) which goes on to show that the assessee has discharged the onus in respect of genuineness genuineness of the transaction. Based on the documents and e documents and materials called for by the AO who accepted the same after verification is an act of materials called for by the AO who accepted the same after verification is an act of materials called for by the AO who accepted the same after verification is an act of enquiry. And we note that revenue has not brought on record any material to enquiry. And we note that revenue has not brought on record any material to enquiry. And we note that revenue has not brought on record any material to challenge the veracity of the documents referred to above. Moreover, the secon challenge the veracity of the documents referred to above. Moreover, the secon challenge the veracity of the documents referred to above. Moreover, the second Ld. Pr. CIT in his impugned order has not brought any material to rebut the Pr. CIT in his impugned order has not brought any material to rebut the Pr. CIT in his impugned order has not brought any material to rebut the presumption of second AO to justify his intervention u/s. 263 of the Act and which presumption of second AO to justify his intervention u/s. 263 of the Act and which presumption of second AO to justify his intervention u/s. 263 of the Act and which would have upset the decision of the second AO’s factual view on the identity, would have upset the decision of the second AO’s factual view on the identity, would have upset the decision of the second AO’s factual view on the identity, creditworthiness and genuinity of the share transaction. In such a scenario, the and genuinity of the share transaction. In such a scenario, the and genuinity of the share transaction. In such a scenario, the second AO’s view based on the documents referred to by him is a plausible view and second AO’s view based on the documents referred to by him is a plausible view and second AO’s view based on the documents referred to by him is a plausible view and in consonance with judicial precedents (supra) which we would like to discuss/ in consonance with judicial precedents (supra) which we would like to discuss/ in consonance with judicial precedents (supra) which we would like to discuss/ examine each share subscribe examine each share subscribers totaling thirteen (13) infra;- (i) On perusal of the paper book On perusal of the paper book-2, it reveals that the documents are placed 2, it reveals that the documents are placed at page 12 to 37 of share applicant at page 12 to 37 of share applicant M/s. K.R. Overseas Pvt. Limited M/s. K.R. Overseas Pvt. Limited which is a Private Limited Company, and which has Permanent Account which is a Private Limited Company, and which has Permanent Account which is a Private Limited Company, and which has Permanent Account No. AACCK0101B AACCK0101B and CIN U51109WB1994PTC061965 and its Net and its Net-worth as on 31.03.2012 (in total) on 31.03.2012 (in total)- share capital & reserve is to the tune of share capital & reserve is to the tune of Rs.66,77,47,921/ Rs.66,77,47,921/- (PB page 22) and the investment made in the (PB page 22) and the investment made in the assessee-company company company including including including the the the share share share premium premium premium comes comes comes to to to Rs.1,30,00,000/ ,000/-. The payment has been made through banking channel . The payment has been made through banking channel and deposit amount of Rs.1,05,00,000/ and deposit amount of Rs.1,05,00,000/- took place as on 01.03.2012 by took place as on 01.03.2012 by NEFT and Rs.25,00,000/ NEFT and Rs.25,00,000/- as on 06.03.2012. The Board Resolution for as on 06.03.2012. The Board Resolution for investment of the Company is filed and the share application investment of the Company is filed and the share application investment of the Company is filed and the share application form, ITR acknowledgment, Bank statement, explanation of source of funds as acknowledgment, Bank statement, explanation of source of funds as acknowledgment, Bank statement, explanation of source of funds as well as financial statements have been filed by the assessee at P. B page well as financial statements have been filed by the assessee at P. B page well as financial statements have been filed by the assessee at P. B page 3-37and thus we note that the assessee had duly discharged its onus to 37and thus we note that the assessee had duly discharged its onus to 37and thus we note that the assessee had duly discharged its onus to prove the identity of the share app prove the identity of the share applicants by adducing PAN as well as licants by adducing PAN as well as income-tax returns. The financial statement shows that the share tax returns. The financial statement shows that the share tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee applicant had enough funds to invest in the assessee-company and the company and the transaction has happened through banking channel. Further, it is noted transaction has happened through banking channel. Further, it is noted transaction has happened through banking channel. Further, it is noted that the share a that the share applicant had furnished the source of investment made in pplicant had furnished the source of investment made in the assessee the assessee-company after getting the notice under section 133(6) of company after getting the notice under section 133(6) of the Act. (ii) We note from a perusal of the paper book We note from a perusal of the paper book-2 pages 38 to 77 38 to 77, the details of share applicant of share applicant M/s. Kakrania Trading Pvt. Ltd. It is a Private It is a Private Limited Company which has a PAN Limited Company which has a PAN AABCK151611and its CIN number is and its CIN number is U70101WB1994PTC062137 U70101WB1994PTC062137 and the Net worth of this company as on and the Net worth of this company as on 31.3.2012Rs.66,52,71,914/ 31.3.2012Rs.66,52,71,914/- (PB-page62) and investment made in the page62) and investment made in the assessee company is to the tune of Rs. assessee company is to the tune of Rs.1,39,00,000/- and this share and this share applicant has made the transaction through banking channel four times applicant has made the transaction through banking channel four times applicant has made the transaction through banking channel four times on 01.03.2012 Rs.30,00,000 through NEFT; and by cheque on on 01.03.2012 Rs.30,00,000 through NEFT; and by cheque on on 01.03.2012 Rs.30,00,000 through NEFT; and by cheque on Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited 02.03.2012a sum of Rs. 59,00,000/ 02.03.2012a sum of Rs. 59,00,000/-; and on 7.3.2012 and by cheque on ; and on 7.3.2012 and by cheque on 12.3.2012 Rs. 25 lakh each. T 12.3.2012 Rs. 25 lakh each. There is board resolution for investment in here is board resolution for investment in assessee’s company and Share Application Form, Bank statement, ITR assessee’s company and Share Application Form, Bank statement, ITR assessee’s company and Share Application Form, Bank statement, ITR acknowledgement, and explanation of source of fund as well as financial acknowledgement, and explanation of source of fund as well as financial acknowledgement, and explanation of source of fund as well as financial statement available in the PB statement available in the PB-page 39 to 77. This share applicant page 39 to 77. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank y filed Income Tax Return (ITR) and it has filed its Bank y filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds statement. This company has furnished the details of source of Funds statement. This company has furnished the details of source of Funds and has duly filed financial statements and thus we note that the and has duly filed financial statements and thus we note that the and has duly filed financial statements and thus we note that the assessee had duly discharged its onus to prove the identity of assessee had duly discharged its onus to prove the identity of assessee had duly discharged its onus to prove the identity of the share applicant by adducing PAN as well as income applicant by adducing PAN as well as income-tax returns. The financial tax returns. The financial statement shows that the share applicants had enough funds to invest in statement shows that the share applicants had enough funds to invest in statement shows that the share applicants had enough funds to invest in the assessee the assessee-company and the transaction has happened through company and the transaction has happened through banking channel. Further, it is noted tha banking channel. Further, it is noted that the share applicant had t the share applicant had furnished the source of investment made in the assessee furnished the source of investment made in the assessee-company after company after getting the notice under section 133(6) of the Act. getting the notice under section 133(6) of the Act. (iii) We note from a perusal of the paper book (iii) We note from a perusal of the paper book-2 pages78 to 111 78 to 111, the details of share applicant details of share applicant M/s. Ambala Trafin Pvt. Ltd. It is a Private It is a Private Limited Company which has a PAN Limited Company which has a PAN AACCA1184G and its CIN number is and its CIN number is U67120WB1995PTCO74397 U67120WB1995PTCO74397 and the Net worth of this company as on and the Net worth of this company as on 31.3.2012 Rs.62,47,11,003 31.3.2012 Rs.62,47,11,003- (PB-page101) and investment made in the ) and investment made in the assessee company is to the assessee company is to the tune of Rs. 4,40,00,000/- and this share and this share applicant has made the transaction through banking channel on applicant has made the transaction through banking channel on applicant has made the transaction through banking channel on 01.03.2012 Rs. 25 lakhs; and on 03.03.2012 Rs. 40 lakhs through NEFT; 01.03.2012 Rs. 25 lakhs; and on 03.03.2012 Rs. 40 lakhs through NEFT; 01.03.2012 Rs. 25 lakhs; and on 03.03.2012 Rs. 40 lakhs through NEFT; and by cheque on Rs. 3,75,00,000/ and by cheque on Rs. 3,75,00,000/-on 27.3.2012 . There is board on 27.3.2012 . There is board resolution for inv resolution for investment in assessee’s company and Share Application estment in assessee’s company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of Form, Bank statement, ITR acknowledgement, explanation of source of Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB fund as well as financial statement available in the PB-page 79 to 111 in page 79 to 111 in the PB-II. This share applicant regularly filed Income Tax Ret II. This share applicant regularly filed Income Tax Ret II. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the and it has filed its Bank statement. This company has furnished the and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements. Thus details of source of Funds and has duly filed financial statements. Thus details of source of Funds and has duly filed financial statements. Thus we note that the assessee had duly discharged its onus to prove the we note that the assessee had duly discharged its onus to prove the we note that the assessee had duly discharged its onus to prove the identity of the share applicants by a identity of the share applicants by adducing PAN as well as income dducing PAN as well as income-tax returns. The financial statement shows that the share applicant had returns. The financial statement shows that the share applicant had returns. The financial statement shows that the share applicant had enough funds to invest in the assessee enough funds to invest in the assessee-company and the transaction has company and the transaction has happened through banking channel. Further, it is noted that the share happened through banking channel. Further, it is noted that the share happened through banking channel. Further, it is noted that the share applicants ha applicants had furnished the source of investment made in the assessee d furnished the source of investment made in the assessee- company after getting the notice under section 133(6) of the Act. company after getting the notice under section 133(6) of the Act. company after getting the notice under section 133(6) of the Act. (iv) We note from a perusal of the paper book pages (iv) We note from a perusal of the paper book pages-2,112 to 137 112 to 137, the details of share applicant details of share applicant M/s. Subhiksha Pvt. Ltd. It is a Private Limited rivate Limited Company which has a PAN Company which has a PAN AAPCS2068E and its CIN number is and its CIN number is U52190WB2011PTC157073 U52190WB2011PTC157073 and the Net worth of this company as on and the Net worth of this company as on 31.3.2012 Rs.22,23,97,317/ 31.3.2012 Rs.22,23,97,317/- (PB-page 128.) and investment made in the page 128.) and investment made in the assessee company is to the tune of Rs. 45,00,000/ assessee company is to the tune of Rs. 45,00,000/- and this share and this share applicant has made the transaction through banking channel on applicant has made the transaction through banking channel on applicant has made the transaction through banking channel on 02.03.2012 a sum of Rs.45 lakhs through NEFT. There is board 02.03.2012 a sum of Rs.45 lakhs through NEFT. There is board 02.03.2012 a sum of Rs.45 lakhs through NEFT. There is board resolution for investment in assessee’s company and Share Application resolution for investment in assessee’s company and Share Application resolution for investment in assessee’s company and Share Application Form Bank statement, ITR acknowledgement, expl Form Bank statement, ITR acknowledgement, explanation of source of anation of source of fund as well as financial statement available in the PB fund as well as financial statement available in the PB-page 113 to 137 page 113 to 137 in the PB. This share applicant regularly filed Income Tax Return (ITR) in the PB. This share applicant regularly filed Income Tax Return (ITR) in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the and it has filed its Bank statement. This company has furnished the and it has filed its Bank statement. This company has furnished the Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited details of source of Fu details of source of Funds and has duly filed financial statements and nds and has duly filed financial statements and thus we note that the assessee had duly discharged its onus to prove the thus we note that the assessee had duly discharged its onus to prove the thus we note that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing PAN as well as income identity of the share applicants by adducing PAN as well as income identity of the share applicants by adducing PAN as well as income-tax returns. The financial statement shows that the share applicant returns. The financial statement shows that the share applicant returns. The financial statement shows that the share applicant had enough funds to invest in the assessee enough funds to invest in the assessee-company and the transaction has company and the transaction has happened through banking channel. Further, it is noted that the share happened through banking channel. Further, it is noted that the share happened through banking channel. Further, it is noted that the share applicants had furnished the source of investment made in the assessee applicants had furnished the source of investment made in the assessee applicants had furnished the source of investment made in the assessee- company after getting the notice under s company after getting the notice under section 133(6) of the Act. ection 133(6) of the Act.

So, from the aforesaid facts revealed during the second round, we note that from the aforesaid facts revealed during the second round, we note that from the aforesaid facts revealed during the second round, we note that AO has discharged his duty as an Investigator and enquired as per the direction of AO has discharged his duty as an Investigator and enquired as per the direction of AO has discharged his duty as an Investigator and enquired as per the direction of the First Ld. Pr. CIT dated 23.08.2016 u/s. 263 of the Act (First 263 order) and the First Ld. Pr. CIT dated 23.08.2016 u/s. 263 of the Act (First 263 order) and the First Ld. Pr. CIT dated 23.08.2016 u/s. 263 of the Act (First 263 order) and further we note that the Second Ld. Pr. CIT while issuing the Show Cause Notice at the Second Ld. Pr. CIT while issuing the Show Cause Notice at the Second Ld. Pr. CIT while issuing the Show Cause Notice while exercising his revisional jurisdiction for second time has not made even a while exercising his revisional jurisdiction for second time has not made even a while exercising his revisional jurisdiction for second time has not made even a single allegation about the non single allegation about the non-compliance/failure on the part of Second AO in compliance/failure on the part of Second AO in respect of the specific directio respect of the specific direction given by the First Ld. Pr. CIT dated 23.08.2016 while n given by the First Ld. Pr. CIT dated 23.08.2016 while setting aside the original assessment order passed by the AO dated 26.03.2016. In setting aside the original assessment order passed by the AO dated 26.03.2016. In setting aside the original assessment order passed by the AO dated 26.03.2016. In other words, in the impugned order the second Ld. Pr. CIT has not found fault with other words, in the impugned order the second Ld. Pr. CIT has not found fault with other words, in the impugned order the second Ld. Pr. CIT has not found fault with the action of the second AO in giv the action of the second AO in giving effect to the specific directions given by him ing effect to the specific directions given by him while passing the first revisional order on 23.08.2016. Thus, we note that when the while passing the first revisional order on 23.08.2016. Thus, we note that when the while passing the first revisional order on 23.08.2016. Thus, we note that when the second AO while framing the reassessment order pursuant to the specific direction second AO while framing the reassessment order pursuant to the specific direction second AO while framing the reassessment order pursuant to the specific direction of the First Ld. Pr. CIT’s order dated of the First Ld. Pr. CIT’s order dated 23.08.2016 (first revisional order) has complied 23.08.2016 (first revisional order) has complied with the specific directions of the First Ld. Pr. CIT and based on the inquiry with the specific directions of the First Ld. Pr. CIT and based on the inquiry with the specific directions of the First Ld. Pr. CIT and based on the inquiry conducted and after perusal of the documents running more than 352 pages which conducted and after perusal of the documents running more than 352 pages which conducted and after perusal of the documents running more than 352 pages which reveals the identity, creditworthiness and genui reveals the identity, creditworthiness and genuineness of the share capital and neness of the share capital and premium collected by the assessee from the share subscribers, the satisfaction of AO premium collected by the assessee from the share subscribers, the satisfaction of AO premium collected by the assessee from the share subscribers, the satisfaction of AO as envisaged in sec. 68 of the Act is a plausible view and the fact that the share as envisaged in sec. 68 of the Act is a plausible view and the fact that the share as envisaged in sec. 68 of the Act is a plausible view and the fact that the share subscribers responded to sec. 133(6) notice and produce subscribers responded to sec. 133(6) notice and produced all documents along with d all documents along with the audited financial statements and other documents referred supra, the assessee the audited financial statements and other documents referred supra, the assessee the audited financial statements and other documents referred supra, the assessee had discharged the onus upon it about the identity creditworthiness and had discharged the onus upon it about the identity creditworthiness and had discharged the onus upon it about the identity creditworthiness and genuineness of the share capital and premium collected by the assessee from genuineness of the share capital and premium collected by the assessee from genuineness of the share capital and premium collected by the assessee from the respective share subscribers. Since the aforesaid exercise was carried out by the respective share subscribers. Since the aforesaid exercise was carried out by the respective share subscribers. Since the aforesaid exercise was carried out by the second AO in the reassessment proceedings and the documents referred to above second AO in the reassessment proceedings and the documents referred to above second AO in the reassessment proceedings and the documents referred to above are in the assessment folder, the Second Ld. Pr. CIT erred in holding the are in the assessment folder, the Second Ld. Pr. CIT erred in holding the are in the assessment folder, the Second Ld. Pr. CIT erred in holding the reassessment order of the AO in respect of share capital and premium collected by er of the AO in respect of share capital and premium collected by er of the AO in respect of share capital and premium collected by the assessee as erroneous as well as prejudicial to the interest of the revenue. In the the assessee as erroneous as well as prejudicial to the interest of the revenue. In the the assessee as erroneous as well as prejudicial to the interest of the revenue. In the light of the aforesaid discussions and on perusal of the documents, we are of the light of the aforesaid discussions and on perusal of the documents, we are of the light of the aforesaid discussions and on perusal of the documents, we are of the view that AO’s view to accept the identity, creditworthiness and genuineness of the to accept the identity, creditworthiness and genuineness of the to accept the identity, creditworthiness and genuineness of the share capital and premium collected from the share subscribers was a plausible share capital and premium collected from the share subscribers was a plausible share capital and premium collected from the share subscribers was a plausible view and at any rate can be termed as an unsustainable view on law or facts view and at any rate can be termed as an unsustainable view on law or facts view and at any rate can be termed as an unsustainable view on law or facts Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited 55. Further, we also take note that Further, we also take note that while he proposed to interfere u/s. 263 of while he proposed to interfere u/s. 263 of the Act, he had opined that there was no detailed or independent enquiry but finally the Act, he had opined that there was no detailed or independent enquiry but finally the Act, he had opined that there was no detailed or independent enquiry but finally concluded that there was lack of enquiry. So, the Ld. Second Pr. CIT accepts that concluded that there was lack of enquiry. So, the Ld. Second Pr. CIT accepts that concluded that there was lack of enquiry. So, the Ld. Second Pr. CIT accepts that there was enquiry made by the second AO, howe there was enquiry made by the second AO, however, he concludes that there was ver, he concludes that there was lack of enquiry. So when there was an enquiry conducted by AO then the AO has lack of enquiry. So when there was an enquiry conducted by AO then the AO has lack of enquiry. So when there was an enquiry conducted by AO then the AO has discharged the duty of an investigator. discharged the duty of an investigator. And we note that all the documents referred And we note that all the documents referred to above are available is the assessment folder before the Se to above are available is the assessment folder before the Second Ld. Pr. CIT and cond Ld. Pr. CIT and he could have easily examined the veracity of these documents from the department’s could have easily examined the veracity of these documents from the department’s could have easily examined the veracity of these documents from the department’s data base by click of a mouse and could have recorded his finding of fact if he found data base by click of a mouse and could have recorded his finding of fact if he found data base by click of a mouse and could have recorded his finding of fact if he found anything wrong with these share subscribers and could have pointed out the anything wrong with these share subscribers and could have pointed out the anything wrong with these share subscribers and could have pointed out the adverse fact, if any, which the Second Ld. Pr. CIT has not made in the impugned t, if any, which the Second Ld. Pr. CIT has not made in the impugned t, if any, which the Second Ld. Pr. CIT has not made in the impugned order. So the inference that can be drawn is that the veracity of the factual contents order. So the inference that can be drawn is that the veracity of the factual contents order. So the inference that can be drawn is that the veracity of the factual contents of the documents running more than 352 pages (PB of the documents running more than 352 pages (PB-2) could not be factually 2) could not be factually controverted by the Seco controverted by the Second Ld. Pr. CIT. And still if the Ld. Pr. CIT is not satisfied And still if the Ld. Pr. CIT is not satisfied and wanted to interfere invoking jurisdiction u/s. 263 of the Act, he has to show and wanted to interfere invoking jurisdiction u/s. 263 of the Act, he has to show and wanted to interfere invoking jurisdiction u/s. 263 of the Act, he has to show that the enquiry conducted by AO was flawed or the enquiry conducted by AO was that the enquiry conducted by AO was flawed or the enquiry conducted by AO was that the enquiry conducted by AO was flawed or the enquiry conducted by AO was on a wrong direction or on wron on a wrong direction or on wrong assumption of fact/law or that the AO g assumption of fact/law or that the AO misdirected himself in factual investigation or applied the law erroneously in misdirected himself in factual investigation or applied the law erroneously in misdirected himself in factual investigation or applied the law erroneously in respect of the facts collected by him. For doing so, in the facts discussed supra, he respect of the facts collected by him. For doing so, in the facts discussed supra, he respect of the facts collected by him. For doing so, in the facts discussed supra, he second (Ld. Pr. CIT) should himself had conducted a second (Ld. Pr. CIT) should himself had conducted an enquiry or at least conducted n enquiry or at least conducted a preliminary enquiry and was able to bring some evidence/material on record to a preliminary enquiry and was able to bring some evidence/material on record to a preliminary enquiry and was able to bring some evidence/material on record to upset the AO’s satisfaction in respect of identity, creditworthiness or genuineness of upset the AO’s satisfaction in respect of identity, creditworthiness or genuineness of upset the AO’s satisfaction in respect of identity, creditworthiness or genuineness of the share subscribers and thus recorded a finding of fact the share subscribers and thus recorded a finding of fact that the decision of AO’s that the decision of AO’s enquiry was faulted or wrong and in that process tried to show that it has resulted enquiry was faulted or wrong and in that process tried to show that it has resulted enquiry was faulted or wrong and in that process tried to show that it has resulted in a view which is “unsustainable in law” which would have justified his action of in a view which is “unsustainable in law” which would have justified his action of in a view which is “unsustainable in law” which would have justified his action of passing the impugned order u/s. 263 of the Act, which unfort passing the impugned order u/s. 263 of the Act, which unfortunately is not the case. unately is not the case. Since the AO’s view on the facts collected and discussed is definitely a possible view, Since the AO’s view on the facts collected and discussed is definitely a possible view, Since the AO’s view on the facts collected and discussed is definitely a possible view, so in the factual background discussed in detail, we are of the considered opinion so in the factual background discussed in detail, we are of the considered opinion so in the factual background discussed in detail, we are of the considered opinion that Ld. second Pr. CIT ought not to have interfered with th that Ld. second Pr. CIT ought not to have interfered with the AO’s reassessment e AO’s reassessment order which in any case can be classified as ‘unsustainable in law’ since it is in line order which in any case can be classified as ‘unsustainable in law’ since it is in line order which in any case can be classified as ‘unsustainable in law’ since it is in line with plethora of judicial decisions of the subject. with plethora of judicial decisions of the subject.

To sum up, we find from the above said facts that the Second AO has To sum up, we find from the above said facts that the Second AO has To sum up, we find from the above said facts that the Second AO has conducted enquiry as directed by the First Ld. Pr. CIT on the specific subject matter irected by the First Ld. Pr. CIT on the specific subject matter irected by the First Ld. Pr. CIT on the specific subject matter i.e. share capital and premium collected by the assessee i.e. share capital and premium collected by the assessee-company. Therefore, the company. Therefore, the finding of Second Pr. CIT that the Second AO has not conducted enquiry is incorrect finding of Second Pr. CIT that the Second AO has not conducted enquiry is incorrect finding of Second Pr. CIT that the Second AO has not conducted enquiry is incorrect and is flowing from suspici and is flowing from suspicion only. And as discussed, the allegation/fault pointed on only. And as discussed, the allegation/fault pointed out by the Second Ld. Pr. CIT that the Second AO failed to collect total facts also out by the Second Ld. Pr. CIT that the Second AO failed to collect total facts also out by the Second Ld. Pr. CIT that the Second AO failed to collect total facts also cannot be accepted for the simple reason that Ld. Pr. CIT has not spelt out in the cannot be accepted for the simple reason that Ld. Pr. CIT has not spelt out in the cannot be accepted for the simple reason that Ld. Pr. CIT has not spelt out in the impugned order what he meant by impugned order what he meant by total facts or in the alternative when the total facts or in the alternative when the assessee has discharged its onus, as required by the law in force in this AY 2012 assessee has discharged its onus, as required by the law in force in this AY 2012 assessee has discharged its onus, as required by the law in force in this AY 2012-13, then the Ld. Pr. CIT ought to have called for which ever additional then the Ld. Pr. CIT ought to have called for which ever additional then the Ld. Pr. CIT ought to have called for which ever additional documents/materials or issued summons or issued notices and documents/materials or issued summons or issued notices and collected those facts collected those facts which according to Second Ld. Pr. CIT, the AO omitted to collect and then which according to Second Ld. Pr. CIT, the AO omitted to collect and then which according to Second Ld. Pr. CIT, the AO omitted to collect and then demonstrated that those actions/documents which he collected in that process demonstrated that those actions/documents which he collected in that process demonstrated that those actions/documents which he collected in that process gave result to a different finding of fact which will turn upside down the claim gave result to a different finding of fact which will turn upside down the claim gave result to a different finding of fact which will turn upside down the claim of the assessee and thus able to show that the actions/omission of AO in conducting the assessee and thus able to show that the actions/omission of AO in conducting the assessee and thus able to show that the actions/omission of AO in conducting the investigation was erroneous, which unfortunately is not the case before us. And investigation was erroneous, which unfortunately is not the case before us. And investigation was erroneous, which unfortunately is not the case before us. And equally bad is the bald allegation/fault that second AO has not collected total facts equally bad is the bald allegation/fault that second AO has not collected total facts equally bad is the bald allegation/fault that second AO has not collected total facts cannot be accepted being vague and based on conjectures and surmises and so cannot be accepted being vague and based on conjectures and surmises and so cannot be accepted being vague and based on conjectures and surmises and so meritless. Since the assessee company has discharged its onus as discussed supra, meritless. Since the assessee company has discharged its onus as discussed supra, meritless. Since the assessee company has discharged its onus as discussed supra, and still if the Second Pr. CIT had to find the order of Second AO erroneous for lack and still if the Second Pr. CIT had to find the order of Second AO erroneous for lack and still if the Second Pr. CIT had to find the order of Second AO erroneous for lack Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited of enquiry or for not collecting the entire facts, then the Second Pr. CIT ought to or for not collecting the entire facts, then the Second Pr. CIT ought to or for not collecting the entire facts, then the Second Pr. CIT ought to have called for the additional facts which he thinks that the Second AO has not have called for the additional facts which he thinks that the Second AO has not have called for the additional facts which he thinks that the Second AO has not collected from the assessee or the shareholders and then explained in his impugned collected from the assessee or the shareholders and then explained in his impugned collected from the assessee or the shareholders and then explained in his impugned order as to what effect those additional documents would have made on the second ect those additional documents would have made on the second ect those additional documents would have made on the second assessment order/reassessment order or in other words the impact on the decision assessment order/reassessment order or in other words the impact on the decision assessment order/reassessment order or in other words the impact on the decision making process of framing the second assessment order due to the failure of second making process of framing the second assessment order due to the failure of second making process of framing the second assessment order due to the failure of second AO’s omission to collect the ad AO’s omission to collect the additional documents. However, we note that the ditional documents. However, we note that the Second Pr. CIT has not carried out any such exercise or even spelled out in his Second Pr. CIT has not carried out any such exercise or even spelled out in his Second Pr. CIT has not carried out any such exercise or even spelled out in his impugned order, which all documents the second AO failed to collect for considering impugned order, which all documents the second AO failed to collect for considering impugned order, which all documents the second AO failed to collect for considering the total facts; and even if we presume he has the total facts; and even if we presume he has conducted such an exercise, then he conducted such an exercise, then he has not been able to bring out any adverse factual finding to upset the view of has not been able to bring out any adverse factual finding to upset the view of has not been able to bring out any adverse factual finding to upset the view of Second AO. So we find no merit in the vague allegation of second Pr. CIT that the Second AO. So we find no merit in the vague allegation of second Pr. CIT that the Second AO. So we find no merit in the vague allegation of second Pr. CIT that the second AO has not collected the full facts necessary to d second AO has not collected the full facts necessary to decide the issue of share ecide the issue of share capital & premium.So we note that the Second AO, the assessing authority who is a capital & premium.So we note that the Second AO, the assessing authority who is a capital & premium.So we note that the Second AO, the assessing authority who is a quasi- judicial office has discharged his dual role as an investigator as well as an judicial office has discharged his dual role as an investigator as well as an judicial office has discharged his dual role as an investigator as well as an adjudicator. Looking from another angle of doctrine of merger ca adjudicator. Looking from another angle of doctrine of merger canvassed before us, nvassed before us, we note from the facts of this case that the we note from the facts of this case that the second Ld. Pr. CIT – 4 by passing the 4 by passing the second revisional order dated 14.03.2019 has substituted the First Pr. CIT’s order second revisional order dated 14.03.2019 has substituted the First Pr. CIT’s order second revisional order dated 14.03.2019 has substituted the First Pr. CIT’s order passed u/s. 263 of the Act dated 23.08.2016 with his own order which he passed u/s. 263 of the Act dated 23.08.2016 with his own order which he passed u/s. 263 of the Act dated 23.08.2016 with his own order which he cannot do since the second assessment order/re since the second assessment order/re-assessment of the Second AO dated assessment of the Second AO dated 07.12.2016 was pursuant to the first revisional order of the First Ld. Pr. CIT and on 07.12.2016 was pursuant to the first revisional order of the First Ld. Pr. CIT and on 07.12.2016 was pursuant to the first revisional order of the First Ld. Pr. CIT and on the very same subject matter on which specific directions/instructions were given the very same subject matter on which specific directions/instructions were given the very same subject matter on which specific directions/instructions were given by the First Ld. Pr.CIT, which direction since having been complied by the AO, brings e First Ld. Pr.CIT, which direction since having been complied by the AO, brings e First Ld. Pr.CIT, which direction since having been complied by the AO, brings into operation the doctrine of merger the subject matter i.e. share capital & into operation the doctrine of merger the subject matter i.e. share capital & into operation the doctrine of merger the subject matter i.e. share capital & premium collected by assessee company. Resultantly the second Ld. Pr.CIT, again premium collected by assessee company. Resultantly the second Ld. Pr.CIT, again premium collected by assessee company. Resultantly the second Ld. Pr.CIT, again cannot rake-up the same subject matter without the second Ld. Pr.CIT in the second e same subject matter without the second Ld. Pr.CIT in the second e same subject matter without the second Ld. Pr.CIT in the second revisional order spells out where the error happened to second AO as an revisional order spells out where the error happened to second AO as an revisional order spells out where the error happened to second AO as an investigator or adjudicator, which exercise the Second Ld. Pr.CIT has not done, so investigator or adjudicator, which exercise the Second Ld. Pr.CIT has not done, so investigator or adjudicator, which exercise the Second Ld. Pr.CIT has not done, so the second Ld. Pr. CIT cannot be the second Ld. Pr. CIT cannot be permitted to again ask the AO to start the permitted to again ask the AO to start the investigation in the way he thinks it proper on the very same subject on which investigation in the way he thinks it proper on the very same subject on which investigation in the way he thinks it proper on the very same subject on which merger has taken place by virtue of the order of First Ld. Pr. CIT. And if this practice merger has taken place by virtue of the order of First Ld. Pr. CIT. And if this practice merger has taken place by virtue of the order of First Ld. Pr. CIT. And if this practice is allowed, then there will be no end to the is allowed, then there will be no end to the assessment proceedings meaning no assessment proceedings meaning no finality to assessment proceedings and that is exactly why the Parliament in its finality to assessment proceedings and that is exactly why the Parliament in its finality to assessment proceedings and that is exactly why the Parliament in its wisdom has brought in safe wisdom has brought in safe-guards, restrictions & conditions precedent to be guards, restrictions & conditions precedent to be satisfied strictly before assumption of revisional jurisdiction satisfied strictly before assumption of revisional jurisdiction. Be that as it may be, as . Be that as it may be, as discussed above, we find that the Second Ld. Pr. CIT without satisfying the condition discussed above, we find that the Second Ld. Pr. CIT without satisfying the condition discussed above, we find that the Second Ld. Pr. CIT without satisfying the condition precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), so all his actions are ab initio void.” so all his actions are ab initio void.”

In the case on hand, the Assessing Officer has at page 5, considered the specific hand, the Assessing Officer has at page 5, considered the specific hand, the Assessing Officer has at page 5, considered the specific directions given by the ld. CIT(A) in his order u/s 263 of the Act dt. 23/08/2016 and directions given by the ld. CIT(A) in his order u/s 263 of the Act dt. 23/08/2016 and directions given by the ld. CIT(A) in his order u/s 263 of the Act dt. 23/08/2016 and based on the same had issued questionnaires to the assessee company which is in based on the same had issued questionnaires to the assessee company which is in based on the same had issued questionnaires to the assessee company which is in Annexure-A of the assessment order. Summons were issued u/s 131 of the Act to the ssment order. Summons were issued u/s 131 of the Act to the ssment order. Summons were issued u/s 131 of the Act to the directors of the share holding company directors of the share holding company M/s. Lakshmi Dealmark Private Limited. The M/s. Lakshmi Dealmark Private Limited. The actions taken in compliance with the directions given by the ld. Pr. CIT are given at actions taken in compliance with the directions given by the ld. Pr. CIT are given at actions taken in compliance with the directions given by the ld. Pr. CIT are given at page 5 to 7 of the assessmen page 5 to 7 of the assessment order. A perusal of the same demonstrates that the t order. A perusal of the same demonstrates that the directions were carried out. directions were carried out. This is not a case of non-applicability of mind or non applicability of mind or non- Assessment Year: 2013 Assessment Year: 2013-14 M/s. Bhagwati Vintrade Private Limited M/s. Bhagwati Vintrade Private Limited verification. The Assessing Officer has taken a possible view. When the Assessing verification. The Assessing Officer has taken a possible view. When the Assessing verification. The Assessing Officer has taken a possible view. When the Assessing Officer follows the direction of the Officer follows the direction of the ld. Pr. CIT, in his order passed u/s 263 of the Act, ld. Pr. CIT, in his order passed u/s 263 of the Act, no revision can be done u/s 263 of the Act on the ground that the Assessing Officer no revision can be done u/s 263 of the Act on the ground that the Assessing Officer no revision can be done u/s 263 of the Act on the ground that the Assessing Officer has not travelled beyond these directions. has not travelled beyond these directions.

The Hon’ble Delhi High Court in the case of The Hon’ble Delhi High Court in the case of CIT vs. K.L. Ahuja (supra) CIT vs. K.L. Ahuja (supra), has approved the following observations of the Tribunal: approved the following observations of the Tribunal:- “When the Income-tax Officer passes an order in his own discretion and that order is found to tax Officer passes an order in his own discretion and that order is found to tax Officer passes an order in his own discretion and that order is found to be erroneous or prejudicial to the interests of the Revenue under be erroneous or prejudicial to the interests of the Revenue under Section 263 is the power to the is the power to the Commissioner of Income-tax to rectify it but when an Income tax to rectify it but when an Income-tax Officer passes an order not in tax Officer passes an order not in his own discretion or wisdom but following the directions of the Commissioner o his own discretion or wisdom but following the directions of the Commissioner o his own discretion or wisdom but following the directions of the Commissioner of Income-tax who follows in turn the direction of the Central Board of Direct Taxes, to whom both' of them who follows in turn the direction of the Central Board of Direct Taxes, to whom both' of them who follows in turn the direction of the Central Board of Direct Taxes, to whom both' of them are subordinate, the Commissioner of Income are subordinate, the Commissioner of Income-tax who succeeds the Commissioner of Income tax who succeeds the Commissioner of Income- tax who had issued the impugned instructions in a circular le tax who had issued the impugned instructions in a circular letter to the Inspecting Assistant tter to the Inspecting Assistant Commissioner cannot treat the order of the Income Commissioner cannot treat the order of the Income-tax Officer as erroneous or prejudicial to tax Officer as erroneous or prejudicial to the interests of the Revenue because it would in fact amount to reviewing his predecessor's the interests of the Revenue because it would in fact amount to reviewing his predecessor's the interests of the Revenue because it would in fact amount to reviewing his predecessor's order which is not permissible under order which is not permissible under Section 263. We accordingly hold that the impugned order . We accordingly hold that the impugned order passed by the learned Commissioner of Income passed by the learned Commissioner of Income-tax was without jurisdiction. Under the tax was without jurisdiction. Under the circumstances, we cancel the said order.” circumstances, we cancel the said order.”

Applying the propositions of law laid down in the case ositions of law laid down in the case-law referred above law referred above to the facts of the case, we have to necessarily hold that the exercise of the revisionary , we have to necessarily hold that the exercise of the revisionary , we have to necessarily hold that the exercise of the revisionary powers by the ld. Pr. CIT u/s 263 of the Act vide order dt. 21/02/2020, is bad in law. powers by the ld. Pr. CIT u/s 263 of the Act vide order dt. 21/02/2020, is bad in law. powers by the ld. Pr. CIT u/s 263 of the Act vide order dt. 21/02/2020, is bad in law. Hence, we quash the same.

In the result appeal of the assessee is allowed. In the result appeal of the assessee is allowed.