ENKAY TRAFFIN (P) LTD.,KOLKATA vs. PR.CIT-4, KOLKATA

The assessee is a private limited company trading in securities and investments. It filed its original return of income for the Assessment Year 2012-13 on 26/09/2012, declaring total income of Rs.73,010/-. The return was duly processed u/s 143(1) of the Act. Thereafter, the case was selected for scrutiny and an assessment order was passed u/s 143(3) of the Act on 04/03/2015 (hereinafter referred to as the “original assessment order”) determining the total income of the company at Rs.7,17,04,500/- interalia making additions u/s 68 of the Act and disallowance u/s 14A of the Act. In the assessment order, the Assessing Officer held as follows:- “In the light of the facts of the case and aforesaid exposition of the legal position, with regard to the identity and creditworthiness of the subscriber companies and the genuineness of the transaction, it can be said that assessee has introduced its own unaccounted fund in the form of share application money to legalize its own black money. Accordingly, the credit of Assessment Year: 2012-13 Enkay Traffin (P) Ltd. Rs.7,15,00,000/- in the books of the assessee is considered as income of the assessee for the in the books of the assessee is considered as income of the assessee for the in the books of the assessee is considered as income of the assessee for the instant previous year and charged to income instant previous year and charged to income-tax. Considering the aforesaid facts and discussion, share application money of Considering the aforesaid facts and discussion, share application money of Considering the aforesaid facts and discussion, share application money of Rs.7,15,00,000/- received by the assess received by the assessee during the year is added to the total income of ee during the year is added to the total income of the assessee as unaccounted cash credit in the books of the assessee as per the provisions the assessee as unaccounted cash credit in the books of the assessee as per the provisions the assessee as unaccounted cash credit in the books of the assessee as per the provisions of section 68 of the I.T. Act.” 2.1. The ld. Pr. CIT, issued a showcause notice to the assessee u/s 263 of the Ac The ld. Pr. CIT, issued a showcause notice to the assessee u/s 263 of the Ac The ld. Pr. CIT, issued a showcause notice to the assessee u/s 263 of the Act on 04/08/2016 proposing to revis 04/08/2016 proposing to revise of the original assessment order dt. 04/03/2015 u/s of the original assessment order dt. 04/03/2015 u/s 263 of the Act. Thereafter, t Thereafter, the ld. Pr. CIT passed an order u/s 263 of the Act on he ld. Pr. CIT passed an order u/s 263 of the Act on 09/09/2016, holding that the original assessment order passed on 04/03/2015 was 09/09/2016, holding that the original assessment order passed on 04/03/2015 was 09/09/2016, holding that the original assessment order passed on 04/03/2015 was erroneous, insofar as, prejudicial to the interest of the revenue ous, insofar as, prejudicial to the interest of the revenue (hereinafter, refer to this (hereinafter, refer to this order as the 1st order u/s 263 of the Act). order u/s 263 of the Act). At para 4(v) of his order, he held as follows: At para 4(v) of his order, he held as follows:- “Considering the above facts and circumstances of the case, the assessment o “Considering the above facts and circumstances of the case, the assessment o “Considering the above facts and circumstances of the case, the assessment order passed on 04.03.2015 is set aside denovo with a direction to AO to carry out proper passed on 04.03.2015 is set aside denovo with a direction to AO to carry out proper passed on 04.03.2015 is set aside denovo with a direction to AO to carry out proper examination of books of accounts and Bank accounts of assessee as well as investors. examination of books of accounts and Bank accounts of assessee as well as investors. examination of books of accounts and Bank accounts of assessee as well as investors. A.O. is also directed to examine the source of share application, identity of inve A.O. is also directed to examine the source of share application, identity of inve A.O. is also directed to examine the source of share application, identity of investor and its genuineness and issue of purchase & sale of shares & its valuation. The and its genuineness and issue of purchase & sale of shares & its valuation. The and its genuineness and issue of purchase & sale of shares & its valuation. The assessment proceedings may be initiated at the earliest and to be completed without assessment proceedings may be initiated at the earliest and to be completed without assessment proceedings may be initiated at the earliest and to be completed without waiting time barring date. The A.O. must provide sufficient opportunity of being waiting time barring date. The A.O. must provide sufficient opportunity of being waiting time barring date. The A.O. must provide sufficient opportunity of being heard to the assessee in order to meet natural justice, equity and fairness.” to the assessee in order to meet natural justice, equity and fairness.” to the assessee in order to meet natural justice, equity and fairness.” Thereafter, the Assessing Officer passed an order u/s 143(3) r.w.s. 263 of the Act Thereafter, the Assessing Officer passed an order u/s 143(3) r.w.s. 263 of the Act Thereafter, the Assessing Officer passed an order u/s 143(3) r.w.s. 263 of the Act on 26/12/2016. In this second assessment order, the Assessing Officer conducted on 26/12/2016. In this second assessment order, the Assessing Officer conducted on 26/12/2016. In this second assessment order, the Assessing Officer conducted enquiries as directed by the ld. Pr. CIT in his order u/s 263 of the Act dt. 09/09/2016 d by the ld. Pr. CIT in his order u/s 263 of the Act dt. 09/09/2016 d by the ld. Pr. CIT in his order u/s 263 of the Act dt. 09/09/2016 and completed the assessment. No addition was made u/s 68 of the Act in this 2 and completed the assessment. No addition was made u/s 68 of the Act in this 2 and completed the assessment. No addition was made u/s 68 of the Act in this 2nd assessment order. 2.2. The ld. Pr. CIT issued a notice u/s 16/01/2019 initiating proceedings u/s 263 of issued a notice u/s 16/01/2019 initiating proceedings u/s 263 of issued a notice u/s 16/01/2019 initiating proceedings u/s 263 of the Act, proposing to revise the second assessment order passed u/s 263 r.w.s. 143(3) Act, proposing to revise the second assessment order passed u/s 263 r.w.s. 143(3) Act, proposing to revise the second assessment order passed u/s 263 r.w.s. 143(3) of the Act on 26/12/2016. Para 3 of this showcause notice reads as follows: of the Act on 26/12/2016. Para 3 of this showcause notice reads as follows: of the Act on 26/12/2016. Para 3 of this showcause notice reads as follows:- “3. Subsequently, the assessment records of the assessee were called for & “3. Subsequently, the assessment records of the assessee were called for & on the basis of the verification of the material available 011 records, it was found that the order of assessment was verification of the material available 011 records, it was found that the order of assessment was verification of the material available 011 records, it was found that the order of assessment was erroneous so far as it is prejudicial to the interest of revenue on the following grounds: erroneous so far as it is prejudicial to the interest of revenue on the following grounds: erroneous so far as it is prejudicial to the interest of revenue on the following grounds:- (i) The A.O passed the order without carrying ou The A.O passed the order without carrying out detailed investigation/verification/ t detailed investigation/verification/ independent enquiry regarding identity, creditworthiness of the shareholders & also independent enquiry regarding identity, creditworthiness of the shareholders & also independent enquiry regarding identity, creditworthiness of the shareholders & also the genuineness of transactions relating to share capital that was intended to be the genuineness of transactions relating to share capital that was intended to be the genuineness of transactions relating to share capital that was intended to be carried out and merely accepted the submission of t carried out and merely accepted the submission of the assessee in this regard. he assessee in this regard. (ii) That A.O has also failed to carryout detailed investigation of the shareholders on the That A.O has also failed to carryout detailed investigation of the shareholders on the That A.O has also failed to carryout detailed investigation of the shareholders on the very issue that how they decided to invest in such a company which was never known very issue that how they decided to invest in such a company which was never known very issue that how they decided to invest in such a company which was never known

Assessment Year: 2012-13 Enkay Traffin (P) Ltd. for its line of business and also they invested at for its line of business and also they invested at huge premium without verifying the huge premium without verifying the financial position. (iii) The A.O further failed to examine the rationale behind raising the said share premium The A.O further failed to examine the rationale behind raising the said share premium The A.O further failed to examine the rationale behind raising the said share premium and also did not verify the method adopted by assessee for determining such and also did not verify the method adopted by assessee for determining such and also did not verify the method adopted by assessee for determining such abnormally huge premium specially keeping in view that prima facie there was no abnormally huge premium specially keeping in view that prima facie there was no abnormally huge premium specially keeping in view that prima facie there was no material in the balance sheet of the assessee warranting/justifying such huge e balance sheet of the assessee warranting/justifying such huge e balance sheet of the assessee warranting/justifying such huge premium. (iv) The A.O failed to collect the relevant evidences in order to reach a logical conclusion The A.O failed to collect the relevant evidences in order to reach a logical conclusion The A.O failed to collect the relevant evidences in order to reach a logical conclusion regarding the genuineness of controlling interest. regarding the genuineness of controlling interest. (v) The A.O. failed to examine all th The A.O. failed to examine all the bank accounts for the entire period in the course of e bank accounts for the entire period in the course of verification to find out the money trail of the share capital. verification to find out the money trail of the share capital. (vi) The A.O. failed to adequately trace out the money trail to ascertain the genuineness of The A.O. failed to adequately trace out the money trail to ascertain the genuineness of The A.O. failed to adequately trace out the money trail to ascertain the genuineness of source of fund invested by share holders in t source of fund invested by share holders in the assessee company. (vii) On the whole the impugned order dated 26 On the whole the impugned order dated 26-12-2016 passed u/s 263/143(3) of the 2016 passed u/s 263/143(3) of the Income Tax Act, 1961 prima facie suffers from lack of independent and adequate Income Tax Act, 1961 prima facie suffers from lack of independent and adequate Income Tax Act, 1961 prima facie suffers from lack of independent and adequate enquiry on the aforesaid issues.” enquiry on the aforesaid issues.”

For that the order dated 14.03.2019 passed u/s 263 by the Ld. Principal CIT is 1. For that the order dated 14.03.2019 passed u/s 263 by the Ld. Principal CIT is 1. For that the order dated 14.03.2019 passed u/s 263 by the Ld. Principal CIT is barred by the law of limitation and liable to be quashed. barred by the law of limitation and liable to be quashed. 2. (a) For that on the facts and in the circumstances of the case, the order For that on the facts and in the circumstances of the case, the order For that on the facts and in the circumstances of the case, the order passed by the Ld. Principal CIT u/s 263 of the Act is bad in law and is liable to passed by the Ld. Principal CIT u/s 263 of the Act is bad in law and is liable to passed by the Ld. Principal CIT u/s 263 of the Act is bad in law and is liable to be quashed. (b) For that on the facts and in the circumstances of the case the Ld. For that on the facts and in the circumstances of the case the Ld. For that on the facts and in the circumstances of the case the Ld. Principal CIT was n Principal CIT was not justified in initiating proceedings u/s 263. ot justified in initiating proceedings u/s 263. 3. (a) For that the Ld. Principal CIT erred in exercising the power of revision for For that the Ld. Principal CIT erred in exercising the power of revision for For that the Ld. Principal CIT erred in exercising the power of revision for the purpose of directing the A.O. to hold another investigation when the A.O. the purpose of directing the A.O. to hold another investigation when the A.O. the purpose of directing the A.O. to hold another investigation when the A.O. had complied with the directions of the pred had complied with the directions of the predecessor Principal CIT, Kolkata ecessor Principal CIT, Kolkata-4 in the preceding order u/s 263 passed on 09.09.2016. in the preceding order u/s 263 passed on 09.09.2016. (b) Without prejudice to the preceding grounds, the issue before the Ld. CIT Without prejudice to the preceding grounds, the issue before the Ld. CIT Without prejudice to the preceding grounds, the issue before the Ld. CIT was debatable, as such, the Ld. Principal CIT did not have the jurisdiction to was debatable, as such, the Ld. Principal CIT did not have the jurisdiction to was debatable, as such, the Ld. Principal CIT did not have the jurisdiction to initiate another proceedings u/s 263. her proceedings u/s 263. 4. For that the Ld. Principal CIT ought to have appreciated that requisite enquiries 4. For that the Ld. Principal CIT ought to have appreciated that requisite enquiries 4. For that the Ld. Principal CIT ought to have appreciated that requisite enquiries were done by the A.O. while passing order u/s 143(3)/263/143(3) dated 26.12.2016, were done by the A.O. while passing order u/s 143(3)/263/143(3) dated 26.12.2016, were done by the A.O. while passing order u/s 143(3)/263/143(3) dated 26.12.2016, were ousting jurisdiction to invoke section 263 once again. were ousting jurisdiction to invoke section 263 once again. 5. For that the Ld. Principal CIT wrongly held that an order passed consequent to For that the Ld. Principal CIT wrongly held that an order passed consequent to For that the Ld. Principal CIT wrongly held that an order passed consequent to order u/s 263 is automatically in favour of the revenue. order u/s 263 is automatically in favour of the revenue. 6. For that the Ld. Principal CIT was not justified in prescribing as to how to conduct 6. For that the Ld. Principal CIT was not justified in prescribing as to how to conduct 6. For that the Ld. Principal CIT was not justified in prescribing as to how to conduct the enquiries to ascertain the the enquiries to ascertain the identity and creditworthiness of shareholders. identity and creditworthiness of shareholders. 7. For that the appellant craves leave to add, alter or delete all or any of the grounds 7. For that the appellant craves leave to add, alter or delete all or any of the grounds 7. For that the appellant craves leave to add, alter or delete all or any of the grounds of appeal.”

The ld. Counsel for the assessee submitted that, ld. Pr. CIT’s order u/s 263 The ld. Counsel for the assessee submitted that, ld. Pr. CIT’s order u/s 263 The ld. Counsel for the assessee submitted that, ld. Pr. CIT’s order u/s 263 of the Act, dt. 14/03/2019, is bad law for the following reasons: , is bad law for the following reasons:- a) The Assessing Officer had The Assessing Officer had examined the net worth of the shareholders and the net worth of the shareholders and had given a finding in his assessment order about the source of funds, had given a finding in his assessment order about the source of funds, had given a finding in his assessment order about the source of funds, identity, creditworthiness identity, creditworthiness of the share applicant and the creditworthin of the share applicant and the creditworthiness, of each of the credit of each of the creditors. He filed a paper book wherein, in annexure . He filed a paper book wherein, in annexure-B, details and documentation submitted by and documentation submitted by each of the share applicant each of the share applicant company are enclosed. That the Assessing Officer was not required to company are enclosed. That the Assessing Officer was not required to company are enclosed. That the Assessing Officer was not required to examine the justification of the examine the justification of the share premium charged charged as per the directions of the ld. Pr. CIT, in the first revisionary order passed u/s 263 of directions of the ld. Pr. CIT, in the first revisionary order passed u/s 263 of directions of the ld. Pr. CIT, in the first revisionary order passed u/s 263 of the Act on 09/09/2016. the Act on 09/09/2016. b) That the Assessing Officer had scrupulously followed the direction That the Assessing Officer had scrupulously followed the direction That the Assessing Officer had scrupulously followed the direction of the ld. Pr. CIT, given in the ld. Pr. CIT, given in the first revisionary order passed u/s 263 of the Act on u/s 263 of the Act on 09/09/2016. Even otherwise, 09/09/2016. Even otherwise, each of the shareholder companies had the shareholder companies had robust financials as can be seen from annexure robust financials as can be seen from annexure-B of the submissions. He B of the submissions. He submitted that the Assessing Officer had specifically asked the submitted that the Assessing Officer had specifically asked the submitted that the Assessing Officer had specifically asked the shareholders shareholders for the reasons for investing in the assessee company and r investing in the assessee company and after getting cogent replies, accepted the same. after getting cogent replies, accepted the same. c) That the Assessing Officer had issued notice u/s 131 of the Act to all the That the Assessing Officer had issued notice u/s 131 of the Act to all the That the Assessing Officer had issued notice u/s 131 of the Act to all the shareholders and that the shareholders had appeared before him on shareholders and that the shareholders had appeared before him on shareholders and that the shareholders had appeared before him on 20/12/2016 to 22/12/2016. 20/12/2016 to 22/12/2016. That the Assessing Officer recorded the That the Assessing Officer recorded the deposition of each of these shareholders and that this fact is evident from deposition of each of these shareholders and that this fact is evident from deposition of each of these shareholders and that this fact is evident from the order sheet entries and the deposition on record. the order sheet entries and the deposition on record. d) That the Assessing Officer had taken pro hat the Assessing Officer had taken pro-active steps in making active steps in making independent enquiries, only after which he was satisfied that independent enquiries, only after which he was satisfied that independent enquiries, only after which he was satisfied that all the necessary ingredients of Section 68 of the Act, necessary ingredients of Section 68 of the Act, are existing in these are existing in these transactions. e) That the ld. Pr. CIT has not That the ld. Pr. CIT has not asked the Assessing Officer to ex Assessing Officer to examine the Directors on the issue of genuineness of controlling interest Directors on the issue of genuineness of controlling interest Directors on the issue of genuineness of controlling interest as the same was not relevant. He submitted that the ld. Pr. CIT in the first round has was not relevant. He submitted that the ld. Pr. CIT in the first round has was not relevant. He submitted that the ld. Pr. CIT in the first round has directed the Assessing Officer to directed the Assessing Officer to examine all the bank accounts of the the bank accounts of the Assessment Year: 2012-13 Enkay Traffin (P) Ltd. investors and estors and also to examine the source of share applicant the source of share applicant which investigation was done by the Assessing Officer investigation was done by the Assessing Officer and that there was not and that there was not direction to trace out the money trails direction to trace out the money trails so as to ascertain the source of to ascertain the source of funds. 4.1. He argued that the Assessing Officer He argued that the Assessing Officer was bound by the directions of the ld. Pr. was bound by the directions of the ld. Pr. CIT given in the first round of revisionary proceedings u/s 263 of the Act and that the CIT given in the first round of revisionary proceedings u/s 263 of the Act and that the CIT given in the first round of revisionary proceedings u/s 263 of the Act and that the Assessing Officer has followed each of these directions and after conducting detailed Assessing Officer has followed each of these directions and after conducting detailed Assessing Officer has followed each of these directions and after conducting detailed enquiries and obtaining necessary docu enquiries and obtaining necessary documents has taken a plausible view and it cannot ments has taken a plausible view and it cannot be said that this is a case where there was be said that this is a case where there was lack of enquiry or a case of inadequate lack of enquiry or a case of inadequate enquiry and hence that the ld. Pr. CIT has erred in invoking his powers u/s 263 of the and hence that the ld. Pr. CIT has erred in invoking his powers u/s 263 of the and hence that the ld. Pr. CIT has erred in invoking his powers u/s 263 of the Act. He relied on a number of case . He relied on a number of case-law for each of the propositions cited by him. He for each of the propositions cited by him. He submitted that its case in question is squarely covered in his favour by the decision of in question is squarely covered in his favour by the decision of in question is squarely covered in his favour by the decision of the Kolkata ‘B’ Bench of the Tribunal in the case of the Kolkata ‘B’ Bench of the Tribunal in the case of Amritrashi Infra P Amritrashi Infra Private Ltd. Vs. Principal ipal Commission Commissioner of Income-tax in ITA ITA No. No. 838/Kol/2019; Assessment Year: 2012-13 order dt. order dt. 12.08.2020 and the decision of the Kolkata ‘A’ Bench and the decision of the Kolkata ‘A’ Bench of the Tribunal in the case M M/s Omkar Infracon Private vs ITO,Ward-12(2), Kolkata 12(2), Kolkata in Assessment Year 2012 No. 896/Kol/2019; Assessment Year 2012-13, order dt. 18/03/2020 13, order dt. 18/03/2020, wherein under similar circumstances the order of the ld. Pr. CIT u/s 263 of the Act, was quashed as bad similar circumstances the order of the ld. Pr. CIT u/s 263 of the Act, was quashed as bad similar circumstances the order of the ld. Pr. CIT u/s 263 of the Act, was quashed as bad in law. He further relied on the He further relied on the decision in the case of Kanchan Plywood Produc Kanchan Plywood Products Pvt. Ltd. in ITA No. 2411/Kol/2017; Assessment Year: 2012 Ltd. in ITA No. 2411/Kol/2017; Assessment Year: 2012-13, order dt. 01/05/2019, 13, order dt. 01/05/2019, and other decisions for the proposition that share premium cannot be taxed, even if it other decisions for the proposition that share premium cannot be taxed, even if it other decisions for the proposition that share premium cannot be taxed, even if it exceeds the fair market value, prior to the amendment brought to the Income Tax A exceeds the fair market value, prior to the amendment brought to the Income Tax A exceeds the fair market value, prior to the amendment brought to the Income Tax Act in the Assessment Year 2013-14. We would be considering each of these decisions as and 14. We would be considering each of these decisions as and 14. We would be considering each of these decisions as and when necessary.

The ld. D/R, Shri Imokaba Jamir The ld. D/R, Shri Imokaba Jamir, on the other hand, controverted the arguments , on the other hand, controverted the arguments of the assessee and submitted that the ld. Pr. CIT of the assessee and submitted that the ld. Pr. CIT in the impugned order passed u/s 263 in the impugned order passed u/s 263 of the Act on 14/03/2019 of the Act on 14/03/2019 has dealt with each and every argument made by the y argument made by the assessee. He took this Bench through para 4 to para 5.1. of the impugned order . He took this Bench through para 4 to para 5.1. of the impugned order . He took this Bench through para 4 to para 5.1. of the impugned order passed u/s 263 of the Act and relied on the and relied on the finding of the ld. Pr. CIT. He specifically drew the He specifically drew the attention of the Bench to the judgment of the Hon’ble Supreme Court in the case of attention of the Bench to the judgment of the Hon’ble Supreme Court in the case of attention of the Bench to the judgment of the Hon’ble Supreme Court in the case of Principal Commissioner of Income Principal Commissioner of Income-tax (Central)-1 v. NRA Iron & Steel (P.) Ltd. Iron & Steel (P.) Ltd. reported in Assessment Year: 2012-13 Enkay Traffin (P) Ltd. [2019] 103 taxmann.com 48 (SC) [2019] 103 taxmann.com 48 (SC) and argued that in case of private placement of shares, n case of private placement of shares, there is a higher onus placed on the assessee and the assessee there is a higher onus placed on the assessee and the assessee is under a legal obligation, to justify the receipt of share capital and share premium to the satisfaction of justify the receipt of share capital and share premium to the satisfaction of justify the receipt of share capital and share premium to the satisfaction of the Assessing Officer. He submitted that the He submitted that the order of the Assessing Officer is a non order of the Assessing Officer is a non- speaking order and that a perusal of the same demonstrates that the assessment order speaking order and that a perusal of the same demonstrates that the assessment order speaking order and that a perusal of the same demonstrates that the assessment order is erroneous insofar as it is prejudicial to the interest of the revenue. On a specific query is erroneous insofar as it is prejudicial to the interest of the revenue. On a specific query is erroneous insofar as it is prejudicial to the interest of the revenue. On a specific query from the Bench, though not leaving h from the Bench, though not leaving his ground, the ld. D/R could not distinguish the is ground, the ld. D/R could not distinguish the orders of this Bench of the Tribunal, on facts, orders of this Bench of the Tribunal, on facts, in identical circumstances, in identical circumstances, in the case of Amritrashi Infra Private Ltd. vs. rivate Ltd. vs. Principal Commissioner of Income-tax (supra) tax (supra) and M/s Omkar Infracon Private vs ITO Omkar Infracon Private vs ITO (supra). He prayed that the order of the ld. Pr. CIT passed He prayed that the order of the ld. Pr. CIT passed u/s 263 of the Act to be upheld. u/s 263 of the Act to be upheld. 5.1. In reply, the ld. Counsel for the assessee, submitted that the judgment of the In reply, the ld. Counsel for the assessee, submitted that the judgment of the In reply, the ld. Counsel for the assessee, submitted that the judgment of the Hon’ble Supreme Court in the case of Hon’ble Supreme Court in the case of NRA Iron & Steel (P.) Ltd. (supra), (supra), is not applicable as, in that case, the shareholders were not traceable and whereas in the case of as, in that case, the shareholders were not traceable and whereas in the case of as, in that case, the shareholders were not traceable and whereas in the case of hand each of the shareholder companies’ representatives appeared before the Assessing each of the shareholder companies’ representatives appeared before the Assessing each of the shareholder companies’ representatives appeared before the Assessing Officer in response to summons Officer in response to summons and that the Assessing Officer recorded and that the Assessing Officer recorded statements on oath from them and that they oath from them and that they filed all necessary documents including assessment filed all necessary documents including assessment orders passed in their cases u/s 143(3) of the Act, by the Department orders passed in their cases u/s 143(3) of the Act, by the Department orders passed in their cases u/s 143(3) of the Act, by the Department in their cases, copies of the final accounts, copies of the returns of income filed by them accounts, copies of the returns of income filed by them accounts, copies of the returns of income filed by them, copies of the bank account statements and bank account statements and also evidence of sources of investments etc. He submitted evidence of sources of investments etc. He submitted that when the assessments of the share applicant companies have been completed by that when the assessments of the share applicant companies have been completed by that when the assessments of the share applicant companies have been completed by the Department u/s 143(3) of the Act, and the Department u/s 143(3) of the Act, and when nothing adverse was found nothing adverse was found, no addition u/s 68 of the Act, can be made in the case of the assessee company, which is a recipient u/s 68 of the Act, can be made in the case of the assessee company, which is a recipient u/s 68 of the Act, can be made in the case of the assessee company, which is a recipient of the share application money. For this proposition, he relied on a number of case of the share application money. For this proposition, he relied on a number of case of the share application money. For this proposition, he relied on a number of case-law, which we will be referring to which we will be referring to, as and when required. 5.1.1. He once again relied on the order of the Co nce again relied on the order of the Co-ordinate Bench of the Tribunal in the ordinate Bench of the Tribunal in the case of Amritrashi Infra Private Ltd. vs. rivate Ltd. vs. Principal Commissioner of Income ipal Commissioner of Income-tax (supra) and submitted that the facts of the assessee’s case are identical to the facts in the case submitted that the facts of the assessee’s case are identical to the facts in the case submitted that the facts of the assessee’s case are identical to the facts in the case of Amritrashi Infra Private Ltd. (supra) rivate Ltd. (supra) and under those circumstances, the decision of the and under those circumstances, the decision of the Tribunal in the case of Amritrashi Infra P Amritrashi Infra Private Ltd. (supra), has to be followed , has to be followed, specifically when no contrary decision is brought to the notice of the Tribunal. specifically when no contrary decision is brought to the notice of the Tribunal. specifically when no contrary decision is brought to the notice of the Tribunal.

We have heard rival contentions. On careful consideration of the facts and We have heard rival contentions. On careful consideration of the facts and We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the authorities circumstances of the case, perusal of the papers on record, orders of the authorities circumstances of the case, perusal of the papers on record, orders of the authorities below as well as case law cited, we hold as follows: below as well as case law cited, we hold as follows:-

We find that this Bench of the Tri We find that this Bench of the Tribunal, has under identical circumstances and has under identical circumstances and identical facts, in the case of identical facts, in the case of Amritrashi Infra Private Ltd. (supra) where the ld. Pr. CIT where the ld. Pr. CIT had passed a second order u/s 263 of the Act, had passed a second order u/s 263 of the Act, held as follows:-

We note that the First Ld. Pr. CIT in his first revisional order, found that AO in e note that the First Ld. Pr. CIT in his first revisional order, found that AO in e 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 the first assessment proceedings though has been provided with the aforesaid 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 order t by the AO. The First Ld. Pr. CIT at para (4) of his first revisional order t by the AO. The First Ld. Pr. CIT at para (4) of his first revisional order has clearly made a finding that “ From the above discussion it is evident that the has clearly made a finding that “ From the above discussion it is evident that the has clearly made a finding that “ From the above discussion it is evident that the assessment proceedings in the case of assessee was completed in a very casual manner assessment proceedings in the case of assessee was completed in a very casual manner assessment proceedings in the case of assessee was completed in a very casual manner and hurried manner flouting all established procedures. ied manner flouting all established procedures. The assessee had discharged The assessee had discharged its onus by furnishing/documents before the AO its onus by furnishing/documents before the AO.”Further, the First Ld. Pr. CIT mainly .”Further, the First Ld. Pr. CIT mainly found fault with the AO’s order for non found fault with the AO’s order for non-issuance of notice u/s. 133(6) of the Act to the issuance of notice u/s. 133(6) of the Act to the shareholders. The First Ld. Pr. CIT found fault with the AO’ s order in not discussing the shareholders. The First Ld. Pr. CIT found fault with the AO’ s order in not discussing the shareholders. The First Ld. Pr. CIT found fault with the AO’ s order in not discussing the basis of evidence on which adverse basis of evidence on which adverse inference was drawn against the assessee. inference was drawn against the assessee. Moreover, the First Ld. Pr. CIT found fault with the AO for not bothering to examine the Moreover, the First Ld. Pr. CIT found fault with the AO for not bothering to examine the Moreover, the First Ld. Pr. CIT found fault with the AO for not bothering to examine the contention of the assessee or to bring on record anything against the assessee and thus contention of the assessee or to bring on record anything against the assessee and thus contention of the assessee or to bring on record anything against the assessee and thus according to him, the AO with a pre according to him, the AO with a pre-determined mind has simply jumped to the etermined mind has simply jumped to the conclusion that the share capital collected by assessee as unexplained cash credit u/s. conclusion that the share capital collected by assessee as unexplained cash credit u/s. conclusion that the share capital collected by assessee as unexplained cash credit u/s. 68 of the Act. Therefore, according to the First Ld. Pr. CIT, the first original assessment 68 of the Act. Therefore, according to the First Ld. Pr. CIT, the first original assessment 68 of the Act. Therefore, according to the First Ld. Pr. CIT, the first original assessment order framed u/s. 143(3) of the Act order framed u/s. 143(3) of the Act dated 26-03-2015 was against the principle of 2015 was against the principle of Assessment Year: 2012-13 Enkay Traffin (P) Ltd. natural justice and, therefore, he found it fit to order denovo assessment and gave natural justice and, therefore, he found it fit to order denovo assessment and gave natural justice and, therefore, he found it fit to order denovo assessment and gave specific direction in respect of share capital & premium collected by assessee. specific direction in respect of share capital & premium collected by assessee. specific direction in respect of share capital & premium collected by assessee.

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

So we note that the second AO was specifically directed by the First Ld. Pr. CIT So we note that the second AO was specifically directed by the First Ld. Pr. CIT 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 to carry out the followings actions in addition to de-novo assessment which means the nt which means the second AO is free to assess the income of assessee afresh, however, he has to do the second AO is free to assess the income of assessee afresh, however, he has to do 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 following specific actions as directed in respect of share-applicants who applied for applicants who applied for shares in assessee-company. The specific directions of Ld. Pr CIT company. The specific directions of Ld. Pr CIT to AO are as under: to AO are as under: (i) To carry out proper examination of the books of accounts and bank account of To carry out proper examination of the books of accounts and bank account of 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 of To carry out proper examination of the books of accounts and bank account of 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 a 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.

M/s. AmbalaTrafin Pvt. Ltd. M/s. AmbalaTrafin Pvt. Ltd. U67120WB1995PTCO74397 AACCA1184G AACCA1184G yes 4. M/s. Subhiksha Pvt. Ltd. M/s. Subhiksha Pvt. Ltd. U52190WB2011PTC157073 AAPCS2068E AAPCS2068E yes 5. M/s. Shivarshi Construction M/s. Shivarshi 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 as assessment, the second AO as per the specific direction of the First Ld. Pr. CIT (supra), conducted the reassessment per the specific direction of the First Ld. Pr. CIT (supra), conducted the reassessment 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 AO firstly proceeding. As per the specific direction of Ld. First Pr. CIT, the Second AO firstly 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 him, who duly mmoned the director of the assessee company Shri NavinTahin before him, who duly 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 furnished the relevant appeared and produced the books of account on 01.12.2016 and furnished the relevant 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 of directors, (iv) the details viz., (i) copy of ITR, (ii) audited accounts, (iii) details of directors, (iv) the details viz., (i) copy of ITR, (ii) audited accounts, (iii) details of directors, (iv) the details of the share-applicants, (v) details of business activity, (vi) details of increase in applicants, (v) details of business activity, (vi) details of increase in applicants, (v) details of business activity, (vi) details of increase in share capital, (vii) Form 2, (viii) Form 5, (ix) bank statements evidencing payment share capital, (vii) Form 2, (viii) Form 5, (ix) bank statements evidencing payment share capital, (vii) Form 2, (viii) Form 5, (ix) bank statements evidencing payment through banking transaction, which fact the AO has acknowledged in the reas through banking transaction, which fact the AO has acknowledged in the reas through banking transaction, which fact the AO has acknowledged in the reassessment order. [And here we should keep in mind that the First Ld. Pr. CIT’s finding of fact after order. [And here we should keep in mind that the First Ld. Pr. CIT’s finding of fact after order. [And here we should keep in mind that the First Ld. Pr. CIT’s finding of fact after perusal of original assessment records that assessee in the first round before AO has perusal of original assessment records that assessee in the first round before AO has perusal of original assessment records that assessee in the first round before AO has produced PAN,ROC details, audited financial statements, details and co produced PAN,ROC details, audited financial statements, details and co produced PAN,ROC details, audited financial statements, details and copy of share applicants, bank statements reflecting the transaction, records relating to investors to applicants, bank statements reflecting the transaction, records relating to investors to applicants, bank statements reflecting the transaction, records relating to investors to establish identity, creditworthiness & genuineness. And the finding of First Ld. Pr. CIT establish identity, creditworthiness & genuineness. And the finding of First Ld. Pr. CIT establish identity, creditworthiness & genuineness. And the finding of First Ld. Pr. CIT that assessee had discharged its onus by furnishing/documents befo that assessee had discharged its onus by furnishing/documents befo that assessee had discharged its onus by furnishing/documents before the AO.]Secondly, after examining these documents, we also find that the second AO issued AO.]Secondly, after examining these documents, we also find that the second AO issued AO.]Secondly, after 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 notices u/s. 133(6) of the Act to all the thirteen (13) share applicants and pursuant to notices u/s. 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 the notice, all the shareholders have filed their respective (i) PAN de the notice, all the shareholders have filed their respective (i) PAN details, (ii) CIN detail, (iii) Audited Annual Report for FY 2011 detail, (iii) Audited Annual Report for FY 2011-12 (AY 2012 12 (AY 2012-13), (iv) ITR acknowledgment for AY 2012 acknowledgment for AY 2012-13 which the AO acknowledges that he verified the same 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 and thus we note that the identity of the investors were duly furnished by the and thus we note that the identity of the investors were duly furnished by the assessee’s director; and the AO verified the veracity of the same from all the share ssee’s director; and the AO verified the veracity of the same from all the share ssee’s director; and the AO verified the veracity of the same from all the share applicants by issuing notice u/s 133(6) of the Act and moreover it is common applicants by issuing notice u/s 133(6) of the Act and moreover it is common applicants by issuing 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 knowledge that in this computer/digital era, the AO on a click of the mouse, could have knowledge that in this 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 ified the identity of the share applicant which is available in the website of ified the 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 Ministry of Corporate Affairs and the ITR Acknowledgments filed by them, will enable Ministry of 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 the AO to cross verify and collect details from the AO of the respective share applicants the AO to 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 nd independently from the Revenue’s departmental data base. We note that all the nd 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 show also examined by the AO along with audited accounts from which these details show 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 a of the share applicants which view of AO is a possible view in the light of the documents referred to and we also by applying the possible view in the light of the documents referred to and we also by applying the 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 reg judicial act of the second AO have been regularly performed. Coming to the contention ularly performed. Coming to the contention of Ld. CIT, DR, that order sheet maintained by the Second AO does not reveal that AO of Ld. CIT, DR, that order sheet maintained by the Second AO does not reveal that AO 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 note that the AO in had issued notice u/s. 133(6) of the Act to the share subscribers, we note that the AO in had issued notice u/s. 133(6) of the Act to the share subscribers, we note that the AO in his reassessment/second assessment o his reassessment/second assessment order has clearly asserted that he had issued rder has clearly asserted that he had issued notice u/s. 133(6) of the Act to all the share applicants as directed by the First Ld. Pr. notice u/s. 133(6) of the Act to all the share applicants as directed by the First Ld. Pr. 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 by the share applicants CIT and we note from the perusal of some letters written by the share applicants CIT and we note from the perusal of some letters written by the share applicants clearly referring to the AO’s sec. 133 clearly referring to the AO’s sec. 133(6) notice (refer inter-alia page 32 of PB alia page 32 of PB-I). So, the clear assertion of the Second AO in his order that pursuant to his issue of notice the clear assertion of the Second AO in his order that pursuant to his issue of notice 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 cannot be disbelieved merely because u/s. 133(6), he received the documents called for cannot be disbelieved merely because u/s. 133(6), he received the documents called for cannot be disbelieved merely because he did not mention this event he did not mention this event in the order sheet. Moreover, the assessee or the share in the order sheet. Moreover, the assessee or the share Assessment Year: 2012-13 Enkay Traffin (P) Ltd. applicants does not have any control over the order sheet maintained by the AO and applicants does not have any control over the order sheet maintained by the AO and applicants does not have any control over the order sheet maintained by the AO and the failure of AO to mention this action cannot be a reason to disbelieve the AO’s the failure of AO to mention this action cannot be a reason to disbelieve the AO’s the failure of AO to mention this action cannot be a reason to disbelieve the AO’s assertion that he issued notice assertion that he issued notice u/s. 133(6) of the Act. Moreover, we have to examine u/s. 133(6) of the Act. Moreover, we have to examine the re-assessment/second assessment order of AO and not the order assessment/second assessment order of AO and not the order-sheet maintained sheet maintained by him which has not been negatively commented upon by the Second Ld Pr CIT and it by him which has not been negatively commented upon by the Second Ld Pr CIT and it by him which has not been negatively commented upon by the Second Ld Pr CIT and it is not the fault for which the Ld Pr is not the fault for which the Ld Pr CIT exercised his power u/s 263 of the Act. Thus, we CIT exercised his power u/s 263 of the Act. Thus, we note that second AO issued sec. 133(6) notice and collected documents running more note that second AO issued sec. 133(6) notice and collected documents running more note that second AO issued sec. 133(6) notice and collected documents running more than 352 pages. Moreover, the First Ld. Pr. CIT while setting aside the first AO’s order than 352 pages. Moreover, the First Ld. Pr. CIT while setting aside the first AO’s order than 352 pages. Moreover, the First Ld. Pr. CIT while setting aside the first AO’s order has returned a finding that ass has returned a finding that assessee in the first round itself has filed the relevant essee in the first round itself has filed the relevant documents to prove the identity, creditworthiness and genuineness of the share capital documents to prove the identity, creditworthiness and genuineness of the share capital 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 during and that assessee had discharged its onus by filing the same. So we find that during and that assessee had discharged its onus by filing the same. So we find that during the second round, the AO iss the second round, the AO issued notices to share-holders u/s. 133(6) and after perusing holders u/s. 133(6) and after perusing their replies and supporting documents and thereafter having verified their veracity, their replies and supporting documents and thereafter having verified their veracity, their replies and supporting documents and thereafter having verified their veracity, the second AO was satisfied with the explanation of assessee in respect to the nature the second AO was satisfied with the explanation of assessee in respect to the nature the second AO was satisfied with the explanation of assessee in respect to the nature and source of share capi and source of share capital which view of second AO cannot be faulted. And we also tal which view of second AO cannot be faulted. And we also note that all the share-holders are regular income tax assessee’s. Therefore in the light holders are regular income tax assessee’s. Therefore in the light holders are regular income tax assessee’s. Therefore in the light of the aforesaid documents discussed their of the aforesaid documents discussed their identity cannot be disbelieved and the AO’s cannot be disbelieved and the AO’s satisfaction in respect of identity of the shareholders is a possible view and cannot be ect of identity of the shareholders is a possible view and cannot be ect of identity of the shareholders is a possible view and cannot be termed as unsustainable in law or facts. termed as unsustainable in law or facts.

Coming to the creditworthiness creditworthiness of the shareholders, our attention was drawn of the shareholders, our attention was drawn to the balance sheet of the shareholders (PB to the balance sheet of the shareholders (PB- 2) which was filed before the AO and the efore the AO and the Ld. Pr. CIT and we note that their source of investment and net worth as per balance Ld. Pr. CIT and we note that their source of investment and net worth as per balance Ld. Pr. CIT and we note that their source of investment and net worth as per balance sheet as on 31.03.2012 as well as the sum invested by them in the assessee is sheet as on 31.03.2012 as well as the sum invested by them in the assessee is sheet as on 31.03.2012 as well as the sum invested by them in the assessee is discernible as under: Name Source of investment Capital & Sum invested in Reserves assessee’s business M/s. K. R. Overseas Pvt. Ltd. Page 8 Paper Book-2 Rs.66,77,47,921 Rs.66,77,47,921 Rs.1,30,000/- (page 22 PB-2 2) M/s. Kakrania Trading Pvt. M/s. Kakrania Trading Pvt. Page 45Paper Book-2 Rs.66,52,71,914 Rs.66,52,71,914 Rs.1,39,00,000/- Ltd. (page 62 PB-2 2) M/s. AmbalaTrafinpvt. Ltd. Page 88Paper Book-2 Rs.624,711,003 Rs.624,711,003 Rs.4,40,00,000/- (page 101 PB PB- 2) M/s. Subhiksha Pvt. Ltd. Rs.222,397,317 Rs.222,397,317 Rs.45,00,000/- Page 115Paper Book- (page 128 PB-2 2) 2 M/s. Shivarshi Construction M/s. Shivarshi Construction Page 146Paper Book-2 Rs.53,89,95,046 Rs.53,89,95,046 Rs.4,66,00,000/- Pvt. Ltd. (page 153 PB-2 2) M/s. Shivashiv Pvt. Ltd. Page 170Paper Book-2 Rs.14,29,56,146 Rs.14,29,56,146 Rs.6,55,00,000/- (page 178 PB-2 2) M/s. Flowtop Agency Pvt. Ltd. M/s. Flowtop Agency Pvt. Ltd. Page 193Paper Book-2 Rs.15,38,94,946 Rs.15,38,94,946 Rs.4,49,00,000/- (page 200 PB-2 2) M/s. Sukh Sagar Residency M/s. Sukh Sagar Residency Page 212 Paper Book-2 Rs.56,18,93,960 Rs.56,18,93,960 Rs.2,31,00,000/- Pvt. Ltd. (page 220 PB-2 2) M/s. Kamaldhan Developers M/s. Kamaldhan Developers Page246-247Paper Rs.56,18,94,080 Rs.56,18,94,080 Rs.12,54,00,000/- Pvt. Ltd. Book-2 (page 254 PB-2 2) M/s. Labhdhan Impex Pvt. M/s. Labhdhan Impex Pvt. Page 270PaperBook-2 Rs.56,18,94,080 Rs.56,18,94,080 Rs. 3,80,00,000/- Ltd. (page 277 PB-2 2) M/s. SubhsreeI mpex Pvt. Ltd. M/s. SubhsreeI mpex Pvt. Ltd. Page 290 of paper book Rs.76,60,93,960 Rs.76,60,93,960 Rs. 2,76,00.000/- (page 297 PB-2 2) M/s. M/s. Maharaja Maharaja Merchants Merchants - Rs.1,54,58,399 Rs.1,54,58,399 Rs. 50,00,000/- Pvt. Ltd.

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 assesse have enough net worth to invest in the assessee company and the share subscribing e company and the share subscribing companies pursuant to the AO’s notice u/s. 133(6) of the Act have furnished their companies pursuant to the AO’s notice u/s. 133(6) of the Act have furnished their companies pursuant 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 and respective audited accounts from which the aforesaid facts are clearly discernible and respective audited accounts from which the aforesaid facts are clearly discernible and moreover the share subscribers have also filed be moreover the share subscribers have also filed before the second AO the source from fore the second AO the source from which they subscribed to shares of assessee (though not required as per law in force for which they subscribed to shares of assessee (though not required as per law in force for which they subscribed 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 Maharaja and M/s 13), bank statement, audited balance sheet etc except M/s Maharaja and M/s 13), bank statement, audited balance sheet etc except M/s Maharaja and M/s Sristi Sales. Thus the assessee had discharged th Sristi Sales. Thus the assessee had discharged the onus on it about the creditworthiness e onus on it about the creditworthiness of the share- holders. So we note that the source of the investments has been clearly holders. So we note that the source of the investments has been clearly holders. So we note that the source of the investments has been clearly brought to the notice of the second AO during the assessment/reassessment brought to the notice of the second AO during the assessment/reassessment brought to the notice of the second AO during the assessment/reassessment proceedings. Further, the bank statements of all the s proceedings. Further, the bank statements of all the shareholders as well as that of hareholders as well as that of assessee were filed before the AO, which revealed that the share capital and premium assessee were filed before the AO, which revealed that the share capital and premium assessee were filed before the AO, which revealed that the share capital and premium have been subscribed by them through banking channel (NEFT or cheque) which goes have been subscribed by them through banking channel (NEFT or cheque) which goes have been subscribed by them through banking channel (NEFT or cheque) which goes on to show that the assessee has discharged the onus in res on to show that the assessee has discharged the onus in respect of genuineness genuineness of the transaction. Based on the documents and materials called for by the AO who accepted transaction. Based on the documents and materials called for by the AO who accepted transaction. Based on the documents and materials called for by the AO who accepted the same after verification is an act of enquiry. And we note that revenue has not the same after verification is an act of enquiry. And we note that revenue has not the same after verification is an act of enquiry. And we note that revenue has not brought on record any material to challenge the veracity of the documents referr brought on record any material to challenge the veracity of the documents referr brought on record any material to challenge the veracity of the documents referred to above. Moreover, the second Ld. Pr. CIT in his impugned order has not brought any above. Moreover, the second Ld. Pr. CIT in his impugned order has not brought any above. Moreover, the second Ld. 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 material to rebut the presumption of second AO to justify his intervention u/s. 263 of material to rebut the 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 the Act and which would have upset the decision of the second AO’s factual view the Act and which 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, identity, creditworthiness and genuinity of the share transaction. In such a scenario, identity, creditworthiness 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 the second AO’s view based on the documents referred to by him is a plausible view and the 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 disc in consonance with judicial precedents (supra) which we would like to disc in consonance with judicial precedents (supra) which we would like to discuss/ examine each share subscribers totaling thirteen (13) 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 a Private Limited Company, and which has Permanent Account No. has Permanent Account No. AACCK0101B AACCK0101B and CIN U51109WB1994PTC061965 and its Net and its Net-worth as on 31.03.2012 (in total) 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 assessee (PB page 22) and the investment made in the assessee- company including the share p company including the share premium comes to Rs.1,30,00,000/ remium comes to Rs.1,30,00,000/-. The payment has been made through banking channel and deposit amount of payment has been made through banking channel and deposit amount of payment has been made through banking channel and deposit amount of Rs.1,05,00,000/ Rs.1,05,00,000/- took place as on 01.03.2012 by NEFT and Rs.25,00,000/ took place as on 01.03.2012 by NEFT and Rs.25,00,000/- as on 06.03.2012. The Board Resolution for investment of the Company is as on 06.03.2012. The Board Resolution for investment of the Company is as on 06.03.2012. The Board Resolution for investment of the Company is filed and the share application form, ITR acknowledgment, Bank and the share application form, ITR acknowledgment, Bank and the share application form, ITR acknowledgment, Bank statement, explanation of source of funds as well as financial statements statement, explanation of source of funds as well as financial statements statement, explanation of source of funds as well as financial statements have been filed by the assessee at P. B page 3 have been filed by the assessee at P. B page 3-37and thus we note that the 37and thus we note that the assessee had duly discharged its onus to prove the assessee had duly discharged its onus to prove the identity of the share identity of the share applicants by adducing PAN as well as income applicants by adducing PAN as well as income-tax returns. The financial tax returns. The financial statement shows that the share applicant had enough funds to invest in the statement shows that the share applicant had enough funds to invest in the statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking company and the transaction has happened through banking company and the transaction has happened through banking channel. Further, it channel. Further, it is noted that the share applicant had furnished the is noted that the share applicant had furnished the Assessment Year: 2012-13 Enkay Traffin (P) Ltd. source of investment made in the assessee source of investment made in the assessee-company after getting the company after getting the notice under section 133(6) of the Act. 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 share applicant M/s. Kakrania Trading Pvt. Ltd. It is a Private Limited It is a Private Limited Company which has a PAN 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.1,39,00,000/ assessee company is to the tune of Rs.1,39,00,000/- 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 01.03.20 on 01.03.2012 Rs.30,00,000 through NEFT; and by cheque on 02.03.2012a 12 Rs.30,00,000 through NEFT; and by cheque on 02.03.2012a sum of Rs. 59,00,000/ sum of Rs. 59,00,000/-; and on 7.3.2012 and by cheque on 12.3.2012 Rs. 25 ; and on 7.3.2012 and by cheque on 12.3.2012 Rs. 25 lakh each. There is board resolution for investment in assessee’s company lakh each. There is board resolution for investment in assessee’s company lakh each. There is board resolution for investment in assessee’s company and Share Application Form, Bank statement, ITR and Share Application Form, Bank statement, ITR acknowledgement, and acknowledgement, and explanation of source of fund as well as financial statement available in explanation of source of fund as well as financial statement available in explanation of source of fund as well as financial statement available in the PB-page 39 to 77. This share applicant regularly filed Income Tax page 39 to 77. This share applicant regularly filed Income Tax page 39 to 77. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has Return (ITR) and it has filed its Bank statement. This company has Return (ITR) and it has filed its Bank statement. This company has furnished the details of furnished the details of source of Funds and has duly filed financial source of Funds and has duly filed financial statements and thus we note that the assessee had duly discharged its onus statements and thus we note that the assessee had duly discharged its onus statements and thus we note that the assessee had duly discharged its onus to prove the identity of the share applicant by adducing PAN as well as to prove the identity of the share applicant by adducing PAN as well as to prove the identity of the share applicant by adducing PAN as well as income-tax returns. The financial statement shows that the shar tax returns. The financial statement shows that the shar tax returns. The financial statement shows that the share applicants had enough funds to invest in the assessee applicants 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 applicant had furnished the source of investment made in that the share applicant had furnished the source of investment made in that the share applicant had furnished the source of investment made in the assessee the assessee-company after getting the notice under section 133(6) of the tice under section 133(6) of the Act.

So, from the aforesaid facts revealed during the second round, we note that AO So, from the aforesaid facts revealed during the second round, we note that AO So, 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 the has discharged his duty as an Investigator and enquired as per the direction of the 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 further we First Ld. Pr. CIT dated 23.08.2016 u/s. 263 of the Act (First 263 order) and further we 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 while exercising e that the Second Ld. Pr. CIT while issuing the Show Cause Notice while exercising e that the Second Ld. Pr. CIT while issuing the Show Cause Notice while exercising his revisional jurisdiction for second time has not made even a single allegation about his revisional jurisdiction for second time has not made even a single allegation about his revisional jurisdiction for second time has not made even a single allegation about the non-compliance/failure on the part of Second AO in respect of the specific dire compliance/failure on the part of Second AO in respect of the specific dire compliance/failure on the part of Second AO in respect of the specific direction given by the First Ld. Pr. CIT dated 23.08.2016 while setting aside the original given by the First Ld. Pr. CIT dated 23.08.2016 while setting aside the original 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 other words, in the impugned assessment order passed by the AO dated 26.03.2016. In other words, in the impugned 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 the action of the second AO in order the second Ld. Pr. CIT has not found fault with the action of the second AO in order the second Ld. Pr. CIT has not found fault with the action of the second AO in giving effect to the specific directions given by him while passing the first revisional giving effect to the specific directions given by him while passing the first revisional giving effect to the specific directions given by him while passing the first revisional order on 23.08.2016. Thus, we note that when the second AO while framing the order on 23.08.2016. Thus, we note that when the second AO while framing the order on 23.08.2016. Thus, we note that when the second AO while framing the reassessment order pursuant to the specific direction of the First Ld. Pr. CIT’s order reassessment order pursuant to the specific direction of the First Ld. Pr. CIT’s order reassessment order pursuant to the specific direction of the First Ld. Pr. CIT’s order dated 23.08.2016 (first revisional order) has complied with the specific directions of ated 23.08.2016 (first revisional order) has complied with the specific directions of ated 23.08.2016 (first revisional order) has complied with the specific directions of the First Ld. Pr. CIT and based on the inquiry conducted and after perusal of the the First Ld. Pr. CIT and based on the inquiry conducted and after perusal of the the First Ld. Pr. CIT and based on the inquiry conducted and after perusal of the documents running more than 352 pages which reveals the identity, creditworthiness documents running more than 352 pages which reveals the identity, creditworthiness documents running more than 352 pages which reveals the identity, creditworthiness and genuineness of the share capital and premium collected by the assessee from the enuineness of the share capital and premium collected by the assessee from the enuineness of the share capital and premium collected by the assessee from the share subscribers, the satisfaction of AO as envisaged in sec. 68 of the Act is a plausible share subscribers, the satisfaction of AO as envisaged in sec. 68 of the Act is a plausible share subscribers, the satisfaction of AO 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 view and the fact that the share subscribers responded to sec. 133(6) notice and view and the fact that the share subscribers responded to sec. 133(6) notice and produced all documents along with the audited financial statements and other duced all documents along with the audited financial statements and other duced all documents along with the audited financial statements and other documents referred supra, the assessee had discharged the onus upon it about the documents referred supra, the assessee had discharged the onus upon it about the documents referred supra, the assessee had discharged the onus upon it about the identity creditworthiness and genuineness of the share capital and premium collected identity creditworthiness and genuineness of the share capital and premium collected identity creditworthiness and genuineness of the share capital and premium collected by the assessee from the respective share subscribers. Since the aforesaid exercise was from the respective share subscribers. Since the aforesaid exercise was from the respective share subscribers. Since the aforesaid exercise was carried out by the second AO in the reassessment proceedings and the documents carried out by the second AO in the reassessment proceedings and the documents carried out by the 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 referred to above are in the assessment folder, the Second Ld. Pr. CIT erred in holding referred to above 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 order of the AO in respect of share capital and premium collected by order 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 view light of the aforesaid discussions and on perusal of the documents, we are of the view 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 share view to accept the identity, creditworthiness and genuineness of the share view to accept the identity, creditworthiness and genuineness of the share Assessment Year: 2012-13 Enkay Traffin (P) Ltd. capital and premium collected from the share subscribers was a plausible view and at capital and premium collected from the share subscribers was a plausible view and at 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 any rate can be termed as an unsustainable view on law or facts

Further, we also take note Further, we also take note that while he proposed to interfere u/s. 263 of the that while he proposed to interfere u/s. 263 of the Act, he had opined that there was no detailed or independent enquiry but finally Act, he had opined that there was no detailed or independent enquiry but finally 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 there concluded that there was lack of enquiry. So, the Ld. Second Pr. CIT accepts that there concluded that there was lack of enquiry. So, the Ld. Second Pr. CIT accepts that there was enquiry made by the second AO, was enquiry made by the second AO, however, he concludes that there was lack of however, he concludes that there was lack of enquiry. So when there was an enquiry conducted by AO then the AO has discharged enquiry. So when there was an enquiry conducted by AO then the AO has discharged enquiry. So when there was an enquiry conducted by AO then the AO has discharged the duty of an investigator. the duty of an investigator. And we note that all the documents referred to above are And we note that all the documents referred to above are available is the assessment folder before th available is the assessment folder before the Second Ld. Pr. CIT and e Second Ld. Pr. CIT and he could have easily examined the veracity of these documents from the department’s data base by easily examined the veracity of these documents from the department’s data base by 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 anything wrong click of a mouse and could have recorded his finding of fact if he found anything wrong click of a mouse and could have recorded his finding of fact if he found anything wrong with these share subscribers and could have po with these share subscribers and could have pointed out the adverse fact, if any, which inted out the adverse fact, if any, which the Second Ld. Pr. CIT has not made in the impugned order. So the inference that can the Second Ld. Pr. CIT has not made in the impugned order. So the inference that can 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 of the documents running more be drawn is that the veracity of the factual contents of the documents running more be drawn is that the veracity of the factual contents of the documents running more than 352 pages (PB-2) could not be factually 2) could not be factually controverted by the Second Ld. Pr. CIT. controverted by the Second Ld. Pr. CIT. And still if the Ld. Pr. CIT is not satisfied and wanted to interfere invoking jurisdiction And still if the Ld. Pr. CIT is not satisfied and wanted to interfere invoking jurisdiction 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 that the enquiry conducted by AO was flawed or the u/s. 263 of the Act, he has to show that the enquiry conducted by AO was flawed or the 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 on a w enquiry conducted by AO was on a wrong direction or on wrong assumption of rong direction or on wrong assumption of fact/law or that the AO misdirected himself in factual investigation or applied the law fact/law or that the AO misdirected himself in factual investigation or applied the law fact/law or that the AO 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 erroneously in respect of the facts collected by him. For doing so, in the facts discussed erroneously in respect of the facts collected by him. For doing so, in the facts discussed supra, he second (Ld. Pr. CIT) shoul supra, he second (Ld. Pr. CIT) should himself had conducted an enquiry or at least d himself had conducted an enquiry or at least conducted a preliminary enquiry and was able to bring some evidence/material on conducted a preliminary enquiry and was able to bring some evidence/material on conducted 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 record to upset the AO’s satisfaction in respect of identity, creditworthiness or record to upset the AO’s satisfaction in respect of identity, creditworthiness or genuineness of the share subscribers and thus r genuineness of the share subscribers and thus recorded a finding of fact that the ecorded a finding of fact that the decision of AO’s enquiry was faulted or wrong and in that process tried to show that it decision of AO’s enquiry was faulted or wrong and in that process tried to show that it decision of AO’s 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 has resulted in a view which is “unsustainable in law” which would have justified his has resulted in a view which is “unsustainable in law” which would have justified his action of passing the impugned order u/s. 263 action of passing the impugned order u/s. 263 of the Act, which unfortunately is not of the Act, which unfortunately is not the case. Since the AO’s view on the facts collected and discussed is definitely a possible the case. Since the AO’s view on the facts collected and discussed is definitely a possible the case. 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 view, so in the factual background discussed in detail, we are of the considered opinion view, so in the factual background discussed in detail, we are of the considered opinion that Ld. second Pr. CIT ought not t that Ld. second Pr. CIT ought not to have interfered with the AO’s reassessment order o have interfered with the AO’s reassessment order which in any case can be classified as ‘unsustainable in law’ since it is in line with which in any case can be classified as ‘unsustainable in law’ since it is in line with which in any case can be classified as ‘unsustainable in law’ since it is in line with plethora of judicial decisions of the subject. plethora of judicial decisions of the subject.

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

On similar facts, when the revisionary jurisdiction u/s 263 of the Act, was On similar facts, when the revisionary jurisdiction u/s 263 of the Act, was On similar facts, when the revisionary jurisdiction u/s 263 of the Act, was exercised second time by the ld. Pr. CIT, exercised second time by the ld. Pr. CIT, this Bench of the Tribunal in the case this Bench of the Tribunal in the case M/s Omkar Infracon Private (supra) (supra) held as under:- “13. Further, we note that even though 13. Further, we note that even though the re-assessment order dated 5.11.2016 was set assessment order dated 5.11.2016 was set aside again by the impugned order of Pr. CIT, we note that one of the faults pointed out by aside again by the impugned order of Pr. CIT, we note that one of the faults pointed out by aside again by the impugned order of Pr. CIT, we note that one of the faults pointed out by the Ld. Pr. CIT to invoke his revisionary jurisdiction were the Ld. Pr. CIT to invoke his revisionary jurisdiction were – Assessment Year: 2012-13 Enkay Traffin (P) Ltd. “(a) Detailed investigation /verification in the nat “(a) Detailed investigation /verification in the nature of independent enquiry regarding ure of independent enquiry regarding identify, credit worthiness, and genuineness of transaction that was intended to be carried identify, credit worthiness, and genuineness of transaction that was intended to be carried identify, credit worthiness, and genuineness of transaction that was intended to be carried but not done and merely accepted the submissions of the but not done and merely accepted the submissions of the assessee” However, we are unable to agree with this allegation of Ld. However, we are unable to agree with this allegation of Ld. Pr. CIT. We note that AO in this Pr. CIT. We note that AO in this case had issued during the first and second round of assessment notice u/s. 142(1) of the case had issued during the first and second round of assessment notice u/s. 142(1) of the case had issued during the first and second round of assessment notice u/s. 142(1) of the Act, pursuant to which the assessee had filed all details and the AO examined the same, and Act, pursuant to which the assessee had filed all details and the AO examined the same, and Act, pursuant to which the assessee had filed all details and the AO examined the same, and thereafter had issued notice u/s 133(6) thereafter had issued notice u/s 133(6) of the Act and verified the details, and issued of the Act and verified the details, and issued summon u/s 131 to the directors of the assessee company as well as to all the shareholders. summon u/s 131 to the directors of the assessee company as well as to all the shareholders. summon u/s 131 to the directors of the assessee company as well as to all the shareholders. And we note that all of them responded and duly appeared before the AO and their And we note that all of them responded and duly appeared before the AO and their And we note that all of them responded and duly appeared before the AO and their statements were recorded and only o statements were recorded and only one shareholder an individual was new and all the ne shareholder an individual was new and all the shareholder's companies were group companies and the new individual share subscriber shareholder's companies were group companies and the new individual share subscriber shareholder's companies were group companies and the new individual share subscriber was father of a director. was father of a director. (b). We note that next fault pointed out by the Ld. Pr. CIT was “the AO failed to carryout (b). We note that next fault pointed out by the Ld. Pr. CIT was “the AO failed to carryout (b). We note that next fault pointed out by the Ld. Pr. CIT was “the AO failed to carryout detailed investigation as to how they decided to invest in a company at premium which iled investigation as to how they decided to invest in a company at premium which iled investigation as to how they decided to invest in a company at premium which was never a known company”. was never a known company”. According to us, the Ld Pr. CIT did not appreciate the facts in the proper perspective and According to us, the Ld Pr. CIT did not appreciate the facts in the proper perspective and According to us, the Ld Pr. CIT did not appreciate the facts in the proper perspective and did not had taken notice of the important fact that th did not had taken notice of the important fact that these were the promoters who started ese were the promoters who started the company in the year 2010 for the business of making ash the company in the year 2010 for the business of making ash-fly bricks and the only new fly bricks and the only new shareholder individual was father of an existing director; and the assessee company in this shareholder individual was father of an existing director; and the assessee company in this shareholder individual was father of an existing director; and the assessee company in this assessment year had started expansion act assessment year had started expansion activities of the business of making/manufacturing ivities of the business of making/manufacturing fly ash bricks. We note that the share capital infused into the company has yielded result. fly ash bricks. We note that the share capital infused into the company has yielded result. fly ash bricks. We note that the share capital infused into the company has yielded result. And moreover the investor companies were group companies and shares allotted this year And moreover the investor companies were group companies and shares allotted this year And moreover the investor companies were group companies and shares allotted this year was to existing shareholders was to existing shareholders and only new shareholders was the father of a director. As and only new shareholders was the father of a director. As stated earlier, the promoter and group companies found potential of growth in the stated earlier, the promoter and group companies found potential of growth in the stated earlier, the promoter and group companies found potential of growth in the business and had made the investment and premium which was agreed upon mutually by business and had made the investment and premium which was agreed upon mutually by business and had made the investment and premium which was agreed upon mutually by all the existing shareholders ta all the existing shareholders taking into consideration the expansion and future return king into consideration the expansion and future return expected of it. After appreciating these facts and taking into consideration the financial expected of it. After appreciating these facts and taking into consideration the financial expected of it. After appreciating these facts and taking into consideration the financial results of the assessee company as on the date of reassessment order, the AO had accepted results of the assessee company as on the date of reassessment order, the AO had accepted results of the assessee company as on the date of reassessment order, the AO had accepted the genuinity of the transaction, so nothing turns around in respect of this fault raised by e transaction, so nothing turns around in respect of this fault raised by e transaction, so nothing turns around in respect of this fault raised by the Ld. Pr. CIT. (c) The next fault found by the Ld. Pr. CIT is that the AO failed to examine the rationale (c) The next fault found by the Ld. Pr. CIT is that the AO failed to examine the rationale (c) The next fault found by the Ld. Pr. CIT is that the AO failed to examine the rationale behind the premium. From the aforesaid reasons (supra) (b), the AO has behind the premium. From the aforesaid reasons (supra) (b), the AO has behind the premium. From the aforesaid reasons (supra) (b), the AO has accepted the transaction which on the factual background is a probable view. transaction which on the factual background is a probable view. (d) The other fault noted by Ld. Pr. CIT is that the AO failed to collect relevant evidences in (d) The other fault noted by Ld. Pr. CIT is that the AO failed to collect relevant evidences in (d) The other fault noted by Ld. Pr. CIT is that the AO failed to collect relevant evidences in order to reach a logical conclusion. order to reach a logical conclusion. We do not countenance this fault pointed out We do not countenance this fault pointed out by ld. Pr. CIT for the simple reason that it is by ld. Pr. CIT for the simple reason that it is first of all a vague allegation without spelling out what relevant evidences were not first of all a vague allegation without spelling out what relevant evidences were not first of all a vague allegation without spelling out what relevant evidences were not collected by the AO. We note that assessee had filed documents before AO, copies of which collected by the AO. We note that assessee had filed documents before AO, copies of which collected by the AO. We note that assessee had filed documents before AO, copies of which are produced before us, which i are produced before us, which is running to three (3) volumes. [ Volume I s running to three (3) volumes. [ Volume I-201 pages, volume II 231 pages, volume III volume II 231 pages, volume III-362 pages;] and the AO after personally summoning the 362 pages;] and the AO after personally summoning the individual share holders and directors of corporate shareholders and after recording their individual share holders and directors of corporate shareholders and after recording their individual share holders and directors of corporate shareholders and after recording their statements, and after ver statements, and after verifying the documents produced before him, has accepted the share ifying the documents produced before him, has accepted the share capital/premium infused into the assessee company which action of AO cannot be called a capital/premium infused into the assessee company which action of AO cannot be called a capital/premium infused into the assessee company which action of AO cannot be called a perverse order and according to us, the AO from the actions discussed above has perverse order and according to us, the AO from the actions discussed above has perverse order and according to us, the AO from the actions discussed above has discharged his duty as discharged his duty as an investigator and adjudicator and taken a plausible view which an investigator and adjudicator and taken a plausible view which cannot be called an un-sustainable view on facts or law. sustainable view on facts or law.

Thus, we find that during the Thus, we find that during the reassessment proceeding pursuant to the first reassessment proceeding pursuant to the first revisional order under section 263 of the Act dated 10.06.2016 and pursuant to the specific revisional order under section 263 of the Act dated 10.06.2016 and pursuant to the specific revisional order under section 263 of the Act dated 10.06.2016 and pursuant to the specific directions of the Ld. Pr. CIT, the AO in the second round had summoned the directors of directions of the Ld. Pr. CIT, the AO in the second round had summoned the directors of directions of the Ld. Pr. CIT, the AO in the second round had summoned the directors of Group companies as well as tha Group companies as well as that of assessee and examined the books and the bank t of assessee and examined the books and the bank statement and other documents furnished by them to discharge the onus on them about statement and other documents furnished by them to discharge the onus on them about statement and other documents furnished by them to discharge the onus on them about the identity, creditworthiness and genuineness of the transactions and the AO has the identity, creditworthiness and genuineness of the transactions and the AO has the identity, creditworthiness and genuineness of the transactions and the AO has recorded their statement during reasses recorded their statement during reassessment proceedings wherein he has questioned and sment proceedings wherein he has questioned and elicited answers about the identity, creditworthiness and genuineness of the transaction as elicited answers about the identity, creditworthiness and genuineness of the transaction as elicited answers about the identity, creditworthiness and genuineness of the transaction as well as the source of the investment etc. So, from the aforesaid actions carried out by the well as the source of the investment etc. So, from the aforesaid actions carried out by the well as the source of the investment etc. So, from the aforesaid actions carried out by the AO during the reassessment proceeding cannot be found fault with for lack of enquiry and ment proceeding cannot be found fault with for lack of enquiry and ment proceeding cannot be found fault with for lack of enquiry and thus, we note that AO has discharged his duty as an Investigator as per the direction of Ld. thus, we note that AO has discharged his duty as an Investigator as per the direction of Ld. thus, we note that AO has discharged his duty as an Investigator as per the direction of Ld. Pr. CIT dated 10.06.2016 u/s. 263 of the Act (First 263 order) and further we note that the Pr. CIT dated 10.06.2016 u/s. 263 of the Act (First 263 order) and further we note that the Pr. CIT dated 10.06.2016 u/s. 263 of the Act (First 263 order) and further we note that the Ld. Pr. CIT while issuing the Show Cause Notice while exercising his revisional jurisdiction Pr. CIT while issuing the Show Cause Notice while exercising his revisional jurisdiction Pr. CIT while issuing the Show Cause Notice while exercising his revisional jurisdiction for second time has not made even a whisper about the non for second time has not made even a whisper about the non-compliance/failure on the compliance/failure on the part of AO in respect of the specific direction given by the Ld. Pr. CIT dated 1 part of AO in respect of the specific direction given by the Ld. Pr. CIT dated 1 part of AO in respect of the specific direction given by the Ld. Pr. CIT dated 10.06.2016 Assessment Year: 2012-13 Enkay Traffin (P) Ltd. while setting aside the original assessment order passed by the AO dated 20.03.2015. And while setting aside the original assessment order passed by the AO dated 20.03.2015. And while setting aside the original assessment order passed by the AO dated 20.03.2015. And in the impugned order the Ld. Pr. CIT has not found fault with the action of the AO in giving in the impugned order the Ld. Pr. CIT has not found fault with the action of the AO in giving in the impugned order the Ld. Pr. CIT has not found fault with the action of the AO in giving effect to the specific directions given by him while passing t effect to the specific directions given by him while passing the first revisional order on he first revisional order on 10.06.2016. Thus, we note that when the AO while framing the reassessment order 10.06.2016. Thus, we note that when the AO while framing the reassessment order 10.06.2016. Thus, we note that when the AO while framing the reassessment order pursuant to the specific direction of the Ld. Pr. CIT’s order dated 10.06.2016 (first pursuant to the specific direction of the Ld. Pr. CIT’s order dated 10.06.2016 (first pursuant to the specific direction of the Ld. Pr. CIT’s order dated 10.06.2016 (first revisional order) has complied with the specific directions revisional order) has complied with the specific directions of Ld. Pr. CIT and based on the of Ld. Pr. CIT and based on the inquiry conducted and after perusal of the documents running more than 794 pages which inquiry conducted and after perusal of the documents running more than 794 pages which inquiry conducted and after perusal of the documents running more than 794 pages which reveals the identity, creditworthiness and genuineness of the share capital and premium reveals the identity, creditworthiness and genuineness of the share capital and premium reveals the identity, creditworthiness and genuineness of the share capital and premium collected by the assessee from the share subscrib collected by the assessee from the share subscribers, the satisfaction of AO as envisaged in ers, the satisfaction of AO as envisaged in sec. 68 of the Act is a plausible view and the share subscribers/directors participating in sec. 68 of the Act is a plausible view and the share subscribers/directors participating in sec. 68 of the Act is a plausible view and the share subscribers/directors participating in the reassessment proceedings along with the audited financial statements and other the reassessment proceedings along with the audited financial statements and other the reassessment proceedings along with the audited financial statements and other documents referred supra, the assess documents referred supra, the assessee had discharged the onus on it about the identity, ee had discharged the onus on it about the identity, creditworthiness and genuineness of the share capital and premium collected by the creditworthiness and genuineness of the share capital and premium collected by the creditworthiness and genuineness of the share capital and premium collected by the assessee from the respective share subscribers. Since the aforesaid exercise was carried assessee from the respective share subscribers. Since the aforesaid exercise was carried assessee from the respective share subscribers. Since the aforesaid exercise was carried out by the AO in the original out by the AO in the original as well as reassessment proceedings and the documents are in as well as reassessment proceedings and the documents are in the assessment folder and the statements have been recorded of the individual share the assessment folder and the statements have been recorded of the individual share the assessment folder and the statements have been recorded of the individual share subscribers and directors of the Group company share subscribers, the Ld. Pr. CIT erred in subscribers and directors of the Group company share subscribers, the Ld. Pr. CIT erred in subscribers and directors of the Group company share subscribers, the Ld. Pr. CIT erred in holding the reassessment order of the AO in respect of share capital and premium collected ment order of the AO in respect of share capital and premium collected ment order 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 unless the by the assessee as erroneous as well as prejudicial to the interest of the revenue unless the by the assessee as erroneous as well as prejudicial to the interest of the revenue unless the Ld. Pr. CIT based on an enquiry conducted by himself in the second round atleast is able to Ld. Pr. CIT based on an enquiry conducted by himself in the second round atleast is able to Ld. Pr. CIT based on an enquiry conducted by himself in the second round atleast is able to upset the AO’s satisfaction in respect of identity, creditworthiness and genuineness of the upset the AO’s satisfaction in respect of identity, creditworthiness and genuineness of the upset the AO’s satisfaction in respect of identity, creditworthiness and genuineness of the share subscribers and his decision not to make any addition under section 68 of the Act. In share subscribers and his decision not to make any addition under section 68 of the Act. In share subscribers and his decision not to make any addition under section 68 of the Act. In the light of the aforesaid discussions and on perusal of the documents the light of the aforesaid discussions and on perusal of the documents 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 share capital that AO’s view to accept the identity, creditworthiness and genuineness of the share capital that AO’s view to accept the identity, creditworthiness and genuineness of the share capital and premium collected from the share subscribers as a plausible view and at any rate can and premium collected from the share subscribers as a plausible view and at any rate can and premium collected from the share subscribers as a plausible view and at any rate can be termed as an unsustainable view on law or facts. be termed as an unsustainable view on law or facts.

Therefore, in the light of the discussion on fact as well as on law, we are of the Therefore, in the light of the discussion on fact as well as on law, we are of the Therefore, in the light of the discussion on fact as well as on law, we are of the considered opinion that AO’s action (reassessment) pursuant to the first revisional order of considered opinion that AO’s action (reassessment) pursuant to the first revisional order of considered opinion that AO’s action (reassessment) pursuant to the first revisional order of Ld. Pr. CIT dated 10.06.2016, to accept the share capital and premium as a possi Ld. Pr. CIT dated 10.06.2016, to accept the share capital and premium as a possi Ld. Pr. CIT dated 10.06.2016, to accept the share capital and premium as a possible view in facts and law as per the ratio laid by the Hon’ble Supreme Court in Malabar Industrial Co. facts and law as per the ratio laid by the Hon’ble Supreme Court in Malabar Industrial Co. facts and law as per the ratio laid by the Hon’ble Supreme Court in Malabar Industrial Co. Ltd. Vs. CIT 243 ITR 83 (SC) the AO’s action/reassessment order cannot be termed as Ltd. Vs. CIT 243 ITR 83 (SC) the AO’s action/reassessment order cannot be termed as Ltd. Vs. CIT 243 ITR 83 (SC) the AO’s action/reassessment order cannot be termed as erroneous and prejudicial to the interest of the Revenue. Therefore, erroneous and prejudicial to the interest of the Revenue. Therefore, erroneous and prejudicial to the interest of the Revenue. Therefore, the condition precedent for usurping revisional jurisdiction u/s. 263 of the Act is absent and, therefore, precedent for usurping revisional jurisdiction u/s. 263 of the Act is absent and, therefore, precedent for usurping revisional jurisdiction u/s. 263 of the Act is absent and, therefore, the Ld. Pr. CIT lacked jurisdiction to assume second time revisional jurisdiction u/s. 263 of the Ld. Pr. CIT lacked jurisdiction to assume second time revisional jurisdiction u/s. 263 of the Ld. Pr. CIT lacked jurisdiction to assume second time revisional jurisdiction u/s. 263 of the Act. Therefore, the assessee succeeds on the lega the Act. Therefore, the assessee succeeds on the legal issue raised and, therefore, on the l issue raised and, therefore, on the facts and circumstances discussed (supra), we are inclined to quash the impugned order of facts and circumstances discussed (supra), we are inclined to quash the impugned order of facts and circumstances discussed (supra), we are inclined to quash the impugned order of Ld. Pr. CIT dated 12.03.2019. Ld. Pr. CIT dated 12.03.2019.

In the case on hand, we find that that Section 143(3) orders have been passed by In the case on hand, we find that that Section 143(3) orders have been passed by In the case on hand, we find that that Section 143(3) orders have been passed by the revenue in the case of following share applicant companies: in the case of following share applicant companies:-

The Hone’ble Andhra Pradesh High Court in the case of The Hone’ble Andhra Pradesh High Court in the case of Spectra Shares and Scrips Spectra Shares and Scrips Pvt. Ltd. V CIT (AP) 354 ITR 35 Pvt. Ltd. V CIT (AP) 354 ITR 35 had considered a number of judgments on this issue of had considered a number of judgments on this issue of exercise of jurisdiction u/s 263 of the Act by the Principal Commissioner of Income Tax exercise of jurisdiction u/s 263 of the Act by the Principal Commissioner of Income Tax exercise of jurisdiction u/s 263 of the Act by the Principal Commissioner of Income Tax and culled out various principles laid down in principles laid down in different judgments by the Courts by the Courts as below :

In Max India Ltd. Max India Ltd. (3 Supra), reiterated the view in Malabar Industrial Malabar Industrial Co.Ltd. (2 Supra) and observed that every loss of Revenue as a consequence of an (2 Supra) and observed that every loss of Revenue as a consequence of an (2 Supra) and observed that every loss of Revenue as a consequence of an order of the Assessing Officer cannot b order of the Assessing Officer cannot be treated as prejudicial to the interests of e treated as prejudicial to the interests of the Revenue. For example, when an Income Tax Officer adopted one of the courses the Revenue. For example, when an Income Tax Officer adopted one of the courses the Revenue. For example, when an Income Tax Officer adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are permissible in law and it has resulted in loss of revenue; or where two views are permissible in law and it has resulted in loss of revenue; or where two views are possible and the Income Tax Officer has taken one possible and the Income Tax Officer has taken one view with which the view with which the Commissioner does not agree, it cannot be treated as an erroneous order Commissioner does not agree, it cannot be treated as an erroneous order Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income prejudicial to the interests of the Revenue, unless the view taken by the Income prejudicial to the interests of the Revenue, unless the view taken by the Income Tax Officer is unsustainable in law. On the facts of that case, Sec.80HHC(3) as it Tax Officer is unsustainable in law. On the facts of that case, Sec.80HHC(3) as it Tax Officer is unsustainable in law. On the facts of that case, Sec.80HHC(3) as it then stood was interpreted by the Assessing Officer but the Revenue contended then stood was interpreted by the Assessing Officer but the Revenue contended then stood was interpreted by the Assessing Officer but the Revenue contended that in view of the 2005 Amendment which is clarificatory and retrospective in that in view of the 2005 Amendment which is clarificatory and retrospective in that in view of the 2005 Amendment which is clarificatory and retrospective in nature, the view of the Assessing Officer was unsustainable in law and the nature, the view of the Assessing Officer was unsustainable in law and the nature, the view of the Assessing Officer was unsustainable in law and the Commissioner was correc Commissioner was correct in invoking Sec.263. But the Supreme Court rejected t in invoking Sec.263. But the Supreme Court rejected the said contention and held that when the Commissioner passed his order the said contention and held that when the Commissioner passed his order the said contention and held that when the Commissioner passed his order disagreeing with the view of the Assessing Officer, there were two views on the disagreeing with the view of the Assessing Officer, there were two views on the disagreeing with the view of the Assessing Officer, there were two views on the word "profits" in that section; that the said sec word "profits" in that section; that the said section was amended eleven times; tion was amended eleven times; that different views existed on the day when the Commissioner passed his order; that different views existed on the day when the Commissioner passed his order; that different views existed on the day when the Commissioner passed his order; that the mechanics of the section had become so complicated over the years that that the mechanics of the section had become so complicated over the years that that the mechanics of the section had become so complicated over the years that Assessment Year: 2012-13 Enkay Traffin (P) Ltd. two views were inherently possible; and therefore, the subsequent two views were inherently possible; and therefore, the subsequent amendment in amendment in 2005 even though retrospective will not attract the provision of Sec.263. 2005 even though retrospective will not attract the provision of Sec.263. 2005 even though retrospective will not attract the provision of Sec.263.

In Sunbeam Auto Ltd. Sunbeam Auto Ltd.( 5 Supra), the Delhi High Court held that the Assessing ( 5 Supra), the Delhi High Court held that the Assessing Officer in the assessment order is not required to give a detailed reason in respect Officer in the assessment order is not required to give a detailed reason in respect Officer in the assessment order is not required to give a detailed reason in respect of each and every item of deduct of each and every item of deduction, etc.; that whether there was application of ion, etc.; that whether there was application of mind before allowing the expenditure in question has to be seen; that if there was mind before allowing the expenditure in question has to be seen; that if there was mind before allowing the expenditure in question has to be seen; that if there was an inquiry, even inadequate that would not by itself give occasion to the an inquiry, even inadequate that would not by itself give occasion to the an inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under Sec.263 merely b Commissioner to pass orders under Sec.263 merely because he has a different ecause he has a different opinion in the matter; that it is only in cases of lack of inquiry that such a course opinion in the matter; that it is only in cases of lack of inquiry that such a course opinion in the matter; that it is only in cases of lack of inquiry that such a course of action would be open; that an assessment order made by the Income Tax of action would be open; that an assessment order made by the Income Tax of action would be open; that an assessment order made by the Income Tax Officer cannot be branded as erroneous by the Commissioner simply becau Officer cannot be branded as erroneous by the Commissioner simply becau Officer cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been written more elaborately; there according to him, the order should have been written more elaborately; there according to him, the order should have been written more elaborately; there must be some prima facie material on record to show that the tax which was must be some prima facie material on record to show that the tax which was must be some prima facie material on record to show that the tax which was lawfully exigible has not been imposed or that by the application of the relevant lawfully exigible has not been imposed or that by the application of the relevant lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation, a lesser tax than what was rrect or incomplete interpretation, a lesser tax than what was rrect or incomplete interpretation, a lesser tax than what was just, has been imposed. In that case, the Delhi High Court held that the just, has been imposed. In that case, the Delhi High Court held that the just, has been imposed. In that case, the Delhi High Court held that the Commissioner in the exercise of revisional power could not have objected to the Commissioner in the exercise of revisional power could not have objected to the Commissioner in the exercise of revisional power could not have objected to the finding of the Assessing Officer that ex finding of the Assessing Officer that expenditure on tools and dies by the assessee, penditure on tools and dies by the assessee, a manufacturer of Car parts, is revenue expenditure where the said claim was a manufacturer of Car parts, is revenue expenditure where the said claim was a manufacturer of Car parts, is revenue expenditure where the said claim was allowed by the latter on being satisfied with the explanation of the assessee and allowed by the latter on being satisfied with the explanation of the assessee and allowed by the latter on being satisfied with the explanation of the assessee and where the same accounting practice followed by the a where the same accounting practice followed by the assessee for number of years ssessee for number of years with the approval of the Income Tax Authorities. It held that the Assessing Officer with the approval of the Income Tax Authorities. It held that the Assessing Officer with the approval of the Income Tax Authorities. It held that the Assessing Officer had called for explanation on the very item from the assessee and the assessee had called for explanation on the very item from the assessee and the assessee had called for explanation on the very item from the assessee and the assessee had furnished its explanation. Merely because the Assessing Offic had furnished its explanation. Merely because the Assessing Officer in his order er in his order Assessment Year: 2012-13 Enkay Traffin (P) Ltd. did not make an elaborate discussion in that regard, his order cannot be termed did not make an elaborate discussion in that regard, his order cannot be termed did not make an elaborate discussion in that regard, his order cannot be termed as erroneous. The opinion of the Assessing Officer is one of the possible views and as erroneous. The opinion of the Assessing Officer is one of the possible views and as erroneous. The opinion of the Assessing Officer is one of the possible views and there was no material before the Commissioner to vary that opinion and ask f there was no material before the Commissioner to vary that opinion and ask f there was no material before the Commissioner to vary that opinion and ask for fresh inquiry.

In Gabriel India Ltd. Gabriel India Ltd. (6 Supra), the Bombay High Court held that a (6 Supra), the Bombay High Court held that a consideration of the Commissioner as to whether an order is erroneous in so far consideration of the Commissioner as to whether an order is erroneous in so far consideration of the Commissioner as to whether an order is erroneous in so far as it is prejudicial to the interests of the Revenue, must be based on materials on as it is prejudicial to the interests of the Revenue, must be based on materials on as it is prejudicial to the interests of the Revenue, must be based on materials on the record of the proceedings called for by him the record of the proceedings called for by him. If there are no materials on . If there are no materials on record on the basis of which it can be said that the Commissioner acting in a record on the basis of which it can be said that the Commissioner acting in a record on the basis of which it can be said that the Commissioner acting in a reasonable manner could have come to such a conclusion, the very initiation of reasonable manner could have come to such a conclusion, the very initiation of reasonable manner could have come to such a conclusion, the very initiation of proceedings by him will be illegal and without jurisdiction. It held proceedings by him will be illegal and without jurisdiction. It held proceedings by him will be illegal and without jurisdiction. It held that the Commissioner cannot initiate proceedings with a view to start fishing and roving Commissioner cannot initiate proceedings with a view to start fishing and roving Commissioner cannot initiate proceedings with a view to start fishing and roving inquiries in matters or orders which are already concluded; that the department inquiries in matters or orders which are already concluded; that the department inquiries in matters or orders which are already concluded; that the department cannot be permitted to begin fresh litigation because of new views they entertain cannot be permitted to begin fresh litigation because of new views they entertain cannot be permitted to begin fresh litigation because of new views they entertain on facts or new versions which they present as to what should be the inference or facts or new versions which they present as to what should be the inference or facts or new versions which they present as to what should be the inference or proper inference either of the facts disclosed or the weight of the circumstance; proper inference either of the facts disclosed or the weight of the circumstance; proper inference either of the facts disclosed or the weight of the circumstance; that if this is permitted, litigation would have no end except when legal ingenuity that if this is permitted, litigation would have no end except when legal ingenuity that if this is permitted, litigation would have no end except when legal ingenuity is exhausted; that to do so is to divide one argument into two and multiply the d; that to do so is to divide one argument into two and multiply the d; that to do so is to divide one argument into two and multiply the litigation. It held that cases may be visualized where the Income Tax Officer while litigation. It held that cases may be visualized where the Income Tax Officer while litigation. It held that cases may be visualized where the Income Tax Officer while making an assessment examines the accounts, makes inquiries, applies his mind making an assessment examines the accounts, makes inquiries, applies his mind making an assessment examines the accounts, makes inquiries, applies his mind to the facts and circumst to the facts and circumstances of the case and determines the income either by ances of the case and determines the income either by accepting the account or by making some estimate himself; that the accepting the account or by making some estimate himself; that the accepting the account or by making some estimate himself; that the Commissioner, on perusal of the record, may be of the opinion that the estimate Commissioner, on perusal of the record, may be of the opinion that the estimate Commissioner, on perusal of the record, may be of the opinion that the estimate made by the Officer concerned was on the lower side and made by the Officer concerned was on the lower side and left to the Commissioner left to the Commissioner he would have estimated the income at a figure higher than the one determined he would have estimated the income at a figure higher than the one determined he would have estimated the income at a figure higher than the one determined by the Income Tax Officer; but that would not vest the Commissioner with power by the Income Tax Officer; but that would not vest the Commissioner with power by the Income Tax Officer; but that would not vest the Commissioner with power to reexamine the accounts and determine the income himself at a higher fi to reexamine the accounts and determine the income himself at a higher fi to reexamine the accounts and determine the income himself at a higher figure; there must be material available on the record called for by the Commissioner to there must be material available on the record called for by the Commissioner to there must be material available on the record called for by the Commissioner to satisfy him prima facie that the order is both erroneous and prejudicial to the satisfy him prima facie that the order is both erroneous and prejudicial to the satisfy him prima facie that the order is both erroneous and prejudicial to the interests of the Revenue. Otherwise, it would amount to giving unbridled and interests of the Revenue. Otherwise, it would amount to giving unbridled and interests of the Revenue. Otherwise, it would amount to giving unbridled and arbitrary power to the revising authority to initiate proceedings for revision in wer to the revising authority to initiate proceedings for revision in wer to the revising authority to initiate proceedings for revision in every case and start re every case and start re-examination and fresh inquiry in matters which have examination and fresh inquiry in matters which have already been concluded under law. already been concluded under law.

In M.S. Raju(15 Supra), this Court has held that the power of the (15 Supra), this Court has held that the power of the (15 Supra), this Court has held that the power of the Commissioner under Sec.263 (1) is not limited only to the material which was ssioner under Sec.263 (1) is not limited only to the material which was ssioner under Sec.263 (1) is not limited only to the material which was available before the Assessing Officer and, in order to protect the interests of the available before the Assessing Officer and, in order to protect the interests of the available before the Assessing Officer and, in order to protect the interests of the Revenue, the Commissioner is entitled to examine any other records which are Revenue, the Commissioner is entitled to examine any other records which are Revenue, the Commissioner is entitled to examine any other records which are available at the time available at the time of examination by him and to take into consideration even of examination by him and to take into consideration even those events which arose subsequent to the order of assessment. those events which arose subsequent to the order of assessment.

In Rampyari Devi Saraogi Rampyari Devi Saraogi(21 Supra), the Commissioner in exercise of (21 Supra), the Commissioner in exercise of revisional powers cancelled assessee’s assessment for the yea revisional powers cancelled assessee’s assessment for the years 1952 rs 1952-1953 to 1960-61 because he found that the income tax officer was not justified in 61 because he found that the income tax officer was not justified in 61 because he found that the income tax officer was not justified in accepting the initial capital, the gift received and sale of jewellery, the income accepting the initial capital, the gift received and sale of jewellery, the income accepting the initial capital, the gift received and sale of jewellery, the income from business etc., without any enquiry or evidence whatsoever . He directed the from business etc., without any enquiry or evidence whatsoever . He directed the from business etc., without any enquiry or evidence whatsoever . He directed the income tax officer to do fresh assessment after making proper enquiry and come tax officer to do fresh assessment after making proper enquiry and come tax officer to do fresh assessment after making proper enquiry and investigation in regard to the jurisdiction. The assessee complained before the investigation in regard to the jurisdiction. The assessee complained before the investigation in regard to the jurisdiction. The assessee complained before the Supreme Court that no fair or reasonable opportunity was given to her. The Supreme Court that no fair or reasonable opportunity was given to her. The Supreme Court that no fair or reasonable opportunity was given to her. The Supreme Court held that there Supreme Court held that there was ample material to show that the income tax was ample material to show that the income tax officer made the assessments in undue hurry; that he had passed a short stereo officer made the assessments in undue hurry; that he had passed a short stereo officer made the assessments in undue hurry; that he had passed a short stereo Assessment Year: 2012-13 Enkay Traffin (P) Ltd. typed assessment order for each assessment year; that on the face of the record, typed assessment order for each assessment year; that on the face of the record, typed assessment order for each assessment year; that on the face of the record, the orders were pre- -judicial to the interest of the Revenue; and no prejudice was the Revenue; and no prejudice was caused to the assessee on account of failure of the Commissioner to indicate the caused to the assessee on account of failure of the Commissioner to indicate the caused to the assessee on account of failure of the Commissioner to indicate the results of the enquiry made by him, as she would have a full opportunity for results of the enquiry made by him, as she would have a full opportunity for results of the enquiry made by him, as she would have a full opportunity for showing to the income tax officer whether he had jurisdiction or showing to the income tax officer whether he had jurisdiction or not and whether not and whether the income tax assessed in the assessment years which were originally passed the income tax assessed in the assessment years which were originally passed the income tax assessed in the assessment years which were originally passed were correct or not" were correct or not"

From the above decisions, the following principles as to exercise of jurisdiction 31. From the above decisions, the following principles as to exercise of jurisdiction 31. From the above decisions, the following principles as to exercise of jurisdiction by the Commissioner u/s.263 of the Act can be culled ou by the Commissioner u/s.263 of the Act can be culled out: a) The Commissioner has to be satisfied of twin conditions, namely, (i) the order a) The Commissioner has to be satisfied of twin conditions, namely, (i) the order a) The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If erroneous but is not prejudicial to the Revenue to the interests of the Revenue. If erroneous but is not prejudicial to the Revenue to the interests of the Revenue. If erroneous but is not prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue or if it is not erroneous but it is prejudicial to the Revenue – recourse cannot be recourse cannot be had to Sec.263 (1) of the Act. had to Sec.263 (1) of the Act. b) Every loss of revenue as a consequence of an order of the Assessing Officer b) Every loss of revenue as a consequence of an order of the Assessing Officer b) Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the Reven cannot be treated as prejudicial to the interests of the Revenue. For example, ue. For example, when an Income-tax Officer adopted one of the courses permissible in law and it tax Officer adopted one of the courses permissible in law and it tax Officer adopted one of the courses permissible in law and it has resulted in loss of Revenue: or where two views are possible and the Income has resulted in loss of Revenue: or where two views are possible and the Income has resulted in loss of Revenue: or where two views are possible and the Income- tax Officer has taken one view with which the Commissioner does not agree, it tax Officer has taken one view with which the Commissioner does not agree, it tax Officer has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the annot be treated as an erroneous order prejudicial to the interests of the annot be treated as an erroneous order prejudicial to the interests of the Revenue, unless the view taken by the Income Revenue, unless the view taken by the Income-tax Officer is unsustainable in law. tax Officer is unsustainable in law. c) To invoke suomotu revisional powers to reopen a concluded assessment under c) To invoke suomotu revisional powers to reopen a concluded assessment under c) To invoke suomotu revisional powers to reopen a concluded assessment under Sec.263, the Commissi Sec.263, the Commissioner must give reasons; that a bare reiteration by him that oner must give reasons; that a bare reiteration by him that the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the the order of the Income Tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue, will not suffice; that the reasons must be such as to show interests of the Revenue, will not suffice; that the reasons must be such as to show interests of the Revenue, will not suffice; that the reasons must be such as to show that the and must irresi that the and must irresistibly lead to the conclusion that the order of the Income stibly lead to the conclusion that the order of the Income Tax Officer was not only erroneous but was prejudicial to the interests of the Tax Officer was not only erroneous but was prejudicial to the interests of the Tax Officer was not only erroneous but was prejudicial to the interests of the Revenue. Thus, while the Income Tax Officer is not called upon to write an Revenue. Thus, while the Income Tax Officer is not called upon to write an Revenue. Thus, while the Income Tax Officer is not called upon to write an elaborate judgment giving detailed reasons elaborate judgment giving detailed reasons in respect of each and every in respect of each and every disallowance, deduction, etc., it is incumbent upon the Commissioner not to disallowance, deduction, etc., it is incumbent upon the Commissioner not to disallowance, deduction, etc., it is incumbent upon the Commissioner not to exercise his suomotu revisional powers unless supported by adequate reasons for exercise his suomotu revisional powers unless supported by adequate reasons for exercise his suomotu revisional powers unless supported by adequate reasons for doing so; that if a query is raised during the course of the scrutiny b doing so; that if a query is raised during the course of the scrutiny b doing so; that if a query is raised during the course of the scrutiny by the Assessing Officer, which was answered to the satisfaction of the Assessing Officer, Assessing Officer, which was answered to the satisfaction of the Assessing Officer, Assessing Officer, which was answered to the satisfaction of the Assessing Officer, but neither the query nor the answer were reflected in the assessment order, this but neither the query nor the answer were reflected in the assessment order, this but neither the query nor the answer were reflected in the assessment order, this would not by itself lead to the conclusion that the order of the Assessing Officer would not by itself lead to the conclusion that the order of the Assessing Officer would not by itself lead to the conclusion that the order of the Assessing Officer called for interference and revision. alled for interference and revision. e) The Commissioner cannot initiate proceedings with a view to start fishing and e) The Commissioner cannot initiate proceedings with a view to start fishing and e) The Commissioner cannot initiate proceedings with a view to start fishing and roving inquiries in matters or orders which are already concluded; that the roving inquiries in matters or orders which are already concluded; that the roving inquiries in matters or orders which are already concluded; that the department cannot be permitted to begin fresh litigation becau department cannot be permitted to begin fresh litigation because of new views se of new views they entertain on facts or new circumstance; that if this is permitted, litigation they entertain on facts or new circumstance; that if this is permitted, litigation they entertain on facts or new circumstance; that if this is permitted, litigation would have no end except when legal ingenuity is exhausted would have no end except when legal ingenuity is exhausted f) Whether there was application of mind before allowing the expenditure in f) Whether there was application of mind before allowing the expenditure in f) Whether there was application of mind before allowing the expenditure in question has to be see question has to be seen; that if there was an inquiry, even inadequate that would n; that if there was an inquiry, even inadequate that would not by itself give occasion to the Commissioner to pass orders under Sec.263 not by itself give occasion to the Commissioner to pass orders under Sec.263 not by itself give occasion to the Commissioner to pass orders under Sec.263 merely because he has a different opinion in the matter; that it is only in cases of merely because he has a different opinion in the matter; that it is only in cases of merely because he has a different opinion in the matter; that it is only in cases of lack of inquiry that such a course lack of inquiry that such a course of action would be open; that an assessment of action would be open; that an assessment order made by the Income Tax Officer cannot be branded as erroneous by the order made by the Income Tax Officer cannot be branded as erroneous by the order made by the Income Tax Officer cannot be branded as erroneous by the Commissioner simply because, according to him, the order should have been Commissioner simply because, according to him, the order should have been Commissioner simply because, according to him, the order should have been written more elaborately; there must be some prima facie mater written more elaborately; there must be some prima facie material on record to ial on record to show that the tax which was lawfully exigible has not been imposed or that by the show that the tax which was lawfully exigible has not been imposed or that by the show that the tax which was lawfully exigible has not been imposed or that by the application of the relevant statute on an incorrect or incomplete interpretation, a application of the relevant statute on an incorrect or incomplete interpretation, a application of the relevant statute on an incorrect or incomplete interpretation, a lesser tax than what was just, has been imposed. lesser tax than what was just, has been imposed.

In view of the above discussion and applying the proposition of law laid In view of the above discussion and applying the proposition of law laid In view of the above discussion and applying the proposition of law laid down in the above case law and specifically applying the above case law and specifically applying the decision of the Tribunal in the case of the decision of the Tribunal in the case of M/s. Amritrashi Infra Private Ltd. rivate Ltd. (supra) and in the case of M/s. Omkar Infrastructur M/s. Omkar Infrastructure Pvt. Ltd. (supra) to the facts of the case on hand, we have to necessarily hold that the to the facts of the case on hand, we have to necessarily hold that the to the facts of the case on hand, we have to necessarily hold that the exercise of revisionary power by the ld. Pr. CIT, u/s 263 of the Act, exercise of revisionary power by the ld. Pr. CIT, u/s 263 of the Act, exercise of revisionary power by the ld. Pr. CIT, u/s 263 of the Act, vide order dt. 14/03/2019, is bad in law. Hence we quash the same and allow the appeal of the in law. Hence we quash the same and allow the appeal of the in law. Hence we quash the same and allow the appeal of the assessee. In the result, appeal of the assessee is allowed.

In the result, appeal of the assessee is allowed.