M/S SAPPHIRE VANIJYA PVT. LTD.,KOLKATA vs. CIT, KOLKATA-1, KOLKATA

We find as has also been admitted by the ld. DR and the AR that facts and circumstances of the cases under consideration are mutatis mutandis similar to those decided earlier. In our aforesaid order in Subhlakshmi Vanijya Pvt. Ltd., vs. CIT (ITA No. 1104/Kol/2014 A.Y. 2009-10), we have drawn the following conclusions: - A. Contention of the assessee that since the AO of the assessee-company was not empowered to examine or make any addition on account of receipt of share capital with or without premium before amendment to section 68 by the Finance Act, 2012 w.e.f. A.Y. 2013-14 and hence the CIT by means of impugned order u/s 263 could not have directed the AO to do so, is unsustainable. B. Failure of the AO to give a logical conclusion to the enquiry conducted by him gives power to the CIT to revise such assessment order, by holding that :- i) the enquiry conducted by the AO in such cases can’t be construed as a proper enquiry; ii) CIT u/s 263 can set aside the assessment order and direct the AO to conduct a thorough enquiry, notwithstanding the jurisdiction of the AO in making enquiries on the issues or matters as he considers fit in terms of section 142(1) and 143(2) of the Act, which is relevant only up to the completion of assessment ; iii) Inadequate inquiry conducted by the AO in the given circumstances is as good as no enquiry and as such, the CIT was empowered to revise the assessment order ; iv) The order of the CIT is not based on irrelevant considerations and further in the present circumstances, he was not obliged to positively indicate the deficiencies in the assessment order on merits on the question of issue of share capital at a huge premium ; and M/s. Sapphire Vanijya Pvt. Ltd. A.Y.2008-09 3

v) the AO in the given circumstances can’t be said to have taken a possible view as the revision is sought to be done on the premise that the AO did not make enquiry thereby rendering the assessment order erroneous and prejudicial to the interest of the revenue on that score itself. C. In the given facts and circumstances of all such cases, the notices u/s 263 were properly served through affixture or otherwise. Further the law does not require the service of notice u/s 263 strictly as per the terms of section 282 of the Act. The only requirement enshrined in the provision is to give an opportunity of hearing to the assessee, which has been complied with in all such cases. D. Limitation period for passing order is to be counted from the date of passing the order u/s 147 read with sec. 143(3) and not the date of Intimation issued u/s 143(1) of the Act, which is not an order for the purposes of section 263. In all the cases, the orders have been passed within the time limit. E. The CIT having jurisdiction over the AO who passed order u/s 147 read with section 143(3), has the territorial jurisdiction to pass the order u/s 263 and not other CIT. F. Addition in the hands of a company can be made u/s 68 in its first year of incorporation. G. After amalgamation, no order can be passed u/s 263 in the name of the amalgamating company. But, where the intention of the assessee is to defraud the Revenue by either filing returns, after amalgamation, in the old name or otherwise, then the order passed in the old name is valid. H. Order passed u/s 263 on a non-working day does not become invalid, when the proceedings involving the participation of the assessee were completed on an earlier working day. I. Order u/s 263 cannot be declared as a nullity for the notice having not been signed by the CIT, when opportunity of hearing was otherwise given by the CIT. J. Refusal by the Revenue to accept the written submissions of the assessee sent after the conclusion of hearing cannot render the order void ab initio. At any rate, it is an irregularity. K. Search proceedings do not debar the CIT from revising order u/s passed u/s 147 of the Act.

M/s. Sapphire Vanijya Pvt. Ltd. A.Y.2008-09 4

raised by the assessee will have to be dismissed as devoid of merit. It may also be relevant to point out that the decision of the Tribunal in the case of Subhlakshmi Vanijya Pvt. Ltd vs CIT (supra) was the subject matter of the appeal by the assessee before the Hon’ble Calcutta High Court. The Hon’ble Calcutta High Court in the case of Raj Mandir Estates (P)Ltd. Vs Pr.CIT 386 ITR 162 (Cal) was pleased to uphold the order of the tribunal. At the time of hearing of the appeal it was also brought to our notice that as against the decision of the Hon’ble Calcutta High Court aforesaid some of the assessees preferred a petition for Special Leave to appeal before the Hon’ble Supreme Court and the Hon’ble Supreme Court by its order dated 29.11.2017 in SLP(C) No.27799/2017 and other connected SLPs dismissed all the SLPs. In view of the above we do not find any merits in this appeal by the assessee and accordingly the same is dismissed.

8. In the result the appeal by the assessee is dismissed. Order pronounced in the Court on 08.12.2017. Sd/- Sd/- [Dr.A.L.Saini] [ N.V.Vasudevan ] Accountant Member Judicial Member Dated : 08.12.2017. [RG Sr.PS] Copy of the order forwarded to:

2. C.I.T.-Kol-1, Kolkata. 3. CIT(DR), Kolkata Benches, Kolkata.