KAMAL COKE INDUSTRIES PVT. LTD. (NOW KNOWN AS KAMAL COKE INDUSTRIES LLP),KOLKATA vs. ITO, WARD - 1(1), KOLKATA , KOLKATA

This assessee’s appeal for assessment year 2012-13 arises against the Principal Commissioner of Income Tax (A) - 1, Kolkata dated 22.02.2017 passed in Case No.F.No.Pr.CIT-1/Kol/Revision u/s 263/2016-17/13640-43 involving proceedings u/s 263 of the Income Tax Act, 1961 (in short ‘the Act’). Case called twice. None appears at assessee’s behest. Case file suggests that RPAD notices dated 30.07.2019 and 03.09.2019 stand returned unserved. We therefore proceed ex parte against the assessee/appellant in the main appeal.

It emerges at the outset that this assessee’s appeal suffers from 219 days’ delay in filing. Its condonation petition dated 11.12.2017 pleads that it had not been properly advised by its auditor/counsel regarding maintainable of the instant appeal. All these solemn averments have gone unrebutted from the Revenue side.

Coming to the main appeal, it transpires at the outset that the Assessing Officer had framed regular assessment in issue dated 04.08.2014 assessing the taxpayer’s income of Rs.3,18,614/- after making various disallowances/additions. The CIT’s order under challenge dated 22.02.2017 has revised the same to be erroneous causing prejudice to interest of the Revenue on the ground that the Assessing Officer had not carried out necessary and proper inquiries regarding the assessee’s share capital/premium of Rs.68,52,000/- involving 11,750 equity shares of Rs.10 face value issued at a premium of Rs.1,990/- per unit. The assessee’s relevant averments in its grounds nowhere rebut the said factual position. Its only case is that the PCIT had issued the relevant section 263 show-cause notice dated 18.01.2017 whereas it stood converted to an LLP (Limited Liability Partnership) as Kamal Coke Industries LLP w.e.f. 03.10.2016. There is no material in the case file about the necessary intimation to this effect issued to the departmental authorities. We therefore quote hon’ble apex court’s landmark decision Malabar Industrial Co. Pvt. Ltd. vs. CIT (2000) 243 83(SC), Rampyari Devi Saraogi v. CIT [1968] 67 ITR 84 & Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC) & Gee Vee Enterprise v. Addl. CIT [1975] 99 ITR 375(Delhi) to hold that such a failure on account of the Assessing Officer’s action in carrying out necessary inquiries during the course of scrutiny render an assessment erroneous causing prejudice to interest of Revenue.

It has further been pointed out at the Revenue’s behest that the tribunal’s coordinate bench’s similar order upholding the CIT’s similar exercise of revisional jurisdiction in a case of lack of enquiry/detailed investigation in share capital/premium in issue in a batch of cases Subhlakshmi Vanijya Pvt. Ltd. -Vs- CIT as affirmed by hon’ble jurisdictional high court Rajmandir Estates Private Limited vs. PCIT ITA No.113 of 2016 and in Special

This assessee’s appeal is dismissed.