M/S PRIME DEALCOMM PVT. LTD.,KOLKATA vs. CIT, KOLKATA-II, KOLKATA

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ITA 353/KOL/2015Status: DisposedITAT Kolkata18 May 2018AY 2008-20093 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found merit in the assessee's contention that the amended Section 68 was not applicable to the assessment year under appeal. Considering the lack of representation before the CIT and for natural justice, the matter was remanded.

What were the facts?

The assessee's appeal was filed with a delay, which was condoned. The assessee raised additional grounds arguing that amended provisions of Section 68, effective from April 1, 2013, could not be applied to the assessment year 2008-09. The CIT had invoked these amended provisions under Section 263.

What were the issues?

The primary issue was whether the amended provisions of Section 68 of the Income Tax Act, introduced by the Finance Act, 2012, could be retrospectively applied to an assessment year prior to its effective date. The applicability of Section 56 was also raised in conjunction.

Which sections of the Income-tax Act were involved?

Section 68,Section 263,Section 56

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, : ‘A’ BENCH, KOLKATA

Before: Shri J. Sudhakar Reddy & Shri S.S.Viswanethra Ravi

For Appellant: Shri Sujoy Sen, Shri S. Jhajharia, FCA, ld.ARs
For Respondent: Shri Arup Chatterjee, Addl. CIT, ld. Sr.DR

This appeal by the Assessee is against the order dt. 25-03- 2014 of the CIT, Kolkata, II, Kolkata for the A.Y 2008-09.

2.

At the outset, it is noticed that the above appeal was filed by the assessee with a delay of three (03) days. After hearing both the parties and perusing the petition to condone the delay, we find the reasons therein are bona fide and the delay is condoned.

3.

Before us the ld.AR submits that the assessee has filed additional grounds of appeal and prayed to admit the same and to adjudicate the same as preliminary issue. The additional grounds read as under:-

1. For that on the facts and on the circumstances of the case the CIT had grossly erred in not understanding that the amended provisions to section 68, which was inserted in the statute, by the Finance Act, 2012, was operative on and from 1.4.2013 and accordingly, the amended provisions of such section 68 could not be invoked assessment year under appeal that is assessment year 2008-09, in order to tax the amount of share capital and share premium issued / allotted during the relevant previous year, in the hands of the Appellant Company.

2. For that on the facts and on the circumstances of the case the CIT had grossly erred in not understanding that when the amended provisions to section 56 and 68, which were inserted in the statute, by the Finance Act, 2012, was operative on and from 2 M/s.Prime Dealcomm P.Ltd

1.4.2013 and had prospective operations, the exercise rendered by the CIT in the order under appeal becomes redundant and hence it is prayed the order passed under section 68 of the Act may kindly be quashed / cancelled.”

4.

The ld.AR further submits that the CIT u/s. 263 of the Act directed the AO to examine the genuineness of source of capital, change of directorship and source of realization from liquidation of assets shown in the balance sheet in terms of amended provisions U/Sec. 68 of the Act and to pass a speaking order by providing sufficient opportunity to assessee. He submits that the amended provisions of section 68 of the Act cannot be made applicable to the A.Y under consideration as the amendments of said section came into force by the Finance Act, 2012, w.e.f 1-4-2012 and prayed to remand the matter to the file of CIT in terms of additional grounds of appeal as raised by the assessee before us.

5.

The ld. DR submits that there was no representative on behalf of assessee before the CIT to prosecute its case under 263 proceedings. He did not object to such proposition of the ld.AR in remanding the matter to the file of CIT for his fresh adjudication.

6.

Heard both the parties, perused the record and the material as available before on us. We find force in the submissions of the ld.AR that the amendment to provision of section 68 of the Act in question was inserted through the Finance Act, 2012, which came into force w.e.f. 1-4-2012. Admittedly, the impugned order of the CIT was passed u/s. 263 of the Act relating to A.Y 2008-09. We find that the CIT under 263 proceedings by invoking the amended provisions of section 68 of the Act directed the AO to examine the genuineness of source of capital, change of directorship and source of realization from liquidation of assets as shown in the balance sheet and to pass a speaking order by providing sufficient opportunity to assessee. The contention of ld. AR before us is that the amended provisions of section 68 of the Act cannot be made applicable to the A.Y under consideration as the amendments of said section came into force by 3 M/s.Prime Dealcomm P.Ltd the Finance Act, 2012, w.e.f 1-4-2012. We further find that there was no representation on behalf of assessee before the CIT under 263 proceedings. Therefore, taking into consideration the facts and circumstances of the case, issues involved in the appeal, submissions of the ld. AR and in the interest of natural justice, we deem it fit and proper to remand the matter to the file of CIT to consider the same and to pass a fresh order as per law, after giving the assessee adequate opportunity of hearing to assessee. Grounds raised by the assessee are allowed for statistical purpose.

7.

In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 18-05-2018

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