M/S, PAWAN PUTRA NIRMAN PVT. LTD.,KOLKATA vs. THE PR. CIT, KOLKATA -1, KOLKATA

The facts and circumstances under which order u/s 263 of the Act was passed by the CIT are a follows :- The Assessee is a company engaged in the business of trading in shares and making investments. For A.Y. 2008-09, the Assessee filed return of income on 03.05.2008 declaring total income of Rs.1,364/-. The same was processed u/s 143(1) of the Act. Thereafter proceeding u/s 147 of the Act was initiated on the ground that the Assessee’s claim for deduction of a sum of Rs.40,000/- which was paid to Registrar of Companies for increase in Authorised capital was capital expenditure and ought to have been allowed as deduction while computing total income of the Assessee and to that extent income has escaped assessment which had to be brought to tax. The Assessee accepted the proposal to disallow the proportionate expenditure of Rs.8000/- claimed as M/s. Pawan Putra Nirman Pvt. Ltd. A.Yr.2008-09 deduction in the relevant previous year. The AO passed an order u/s 143(3) r.w.sec. 147 of the Act dated 29.04.2010 determining total income of the Assessee at Rs.15,764/-.

The CIT in exercise of his powers u/s 263 of the Act passed the impugned order directing the AO to make thorough enquiries with regard to receipt of share capital and huge share premium by the Assessee during the relevant previous year in the light of the provisions of section 68 of the Act. According to CIT the order of the AO was erroneous and prejudicial to the interest of the revenue because the AO failed to make proper enquiries on receipt of share capital by the Assessee which, given the facts and circumstances of the case called for a thorough and detailed examination. Aggrieved by the order of the CIT , the Assessee has preferred the present appeal before the Tribunal.

We have heard the rival submissions. It is seen from the impugned order that the notice to the Assessee in Sec.263 proceedings were served by affixure at the old address viz. No.11A, Maharishi Debendra Road, 4th Floor, Kolkata-700007. The new address of the Assessee is at 32-A, Ramakrishna Samadhi Road, Kolkata-700054. It is also claimed by the Assessee that the issued and subscribed share capital was 148500 equity shares of Rs.10/- each at a premium of Rs.177.20 ps. Per share making it in all a sum of Rs.2,78,00,000/- whereas the CIT in the impugned order has stated that the receipt of share capital and share premium by the Assessee during the previous year was Rs.5,45,50,000/-.

We are of the view that it would be in the interest of justice, considering the facts and circumstances of the case to set aside the impugned order and direct the CIT to pass a fresh order after affording assessee opportunity of being heard. We order accordingly and allow the appeal for statistical purpose.