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Income Tax Appellate Tribunal, “D” BENCH : KOLKATA
Before: Hon’ble Sri N.V.Vasudevan, JM & Shri M.Balaganesh, AM ]
This is an appeal by the Assessee against the order dated 26.03.2013 of C.I.T.- Kolkata-II, Kolkata passed u/s 263 of the Act.
Briefly stated the facts of all the cases in this batch are similar inasmuch as returns were filed by such companies with meagre income; intimations were issued u/s 143(1); thereafter notices u/s 148 were issued either at the instance of such companies divulging a paltry escapement of income or otherwise ; assessment orders were passed u/s 143(3) read with section 147 after making nominal additions and the AOs, during the course of such assessment proceedings, made some formal enquiries about shares issued by such companies at huge premium by issuing notices u/s 133(6) to some of the shareholders and getting satisfied without any further investigation. The jurisdictional CITs have passed orders u/s 263 in all such cases, which have been assailed before the Tribunal.
2 Skipper Plastics Ltd.(formerly known as Ram Consultancy Co.(1993)P.Ltd.). A.Yr.2008-09 We also find that the issue raised in this appeal is squarely covered against the assessee by several orders passed by this bench including Subhlakshmi Vanijya Pvt. Ltd. vs. CIT (infra).
We have perused the relevant material on record. It is relevant to mention that we have disposed of more than 500 cases involving same issue through certain orders with the main order having been passed in a group of cases led by Subhlakshmi Vanijya Pvt. Ltd. vs. CIT (ITA No.1104/Kol/2014) dated 30.7.2015 for the A.Y. 2009-10.
We find as has also been admitted by the ld. DR 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 2
3 Skipper Plastics Ltd.(formerly known as Ram Consultancy Co.(1993)P.Ltd.). A.Yr.2008-09 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 andnot 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.
4 Skipper Plastics Ltd.(formerly known as Ram Consultancy Co.(1993)P.Ltd.). A.Yr.2008-09 5. It is noticed that all or some of the above conclusions are applicable to the appeals in this batch. The ld. Counsel for the assessee however submitted before us that there was no service of show-cause notice u/s 263 of the Act and the impugned order u/s 263 of the Act was an exparte order. He brought to our notice that the show cause notice u/s 263 of the Act was served by an affixure at the last known address of the assessee. It was also submitted that even the impugned order of the CIT u/s 263 of the Act was not received by the assessee and therefore the assessee moved an application before the AO for furnishing a copy of the order u/s 263 of the Act passed by CIT-II, Kolkata dated 26.03.2013. It was submitted by him that the assessee made an application to the AO for furnishing a copy of the impugned order u/s 263 of the Act on 14.02.2014 and received the same on 04.03.2014 and thereafter filed the present appeal before the Tribunal.
The main contention was that the order passed u/s 263 of the Act is null and void because the show cause notice u/s 263 of the Act was not served on the assessee and therefore the Assessee did not have opportunity of being heard before the impugned order was passed by the CIT. In this regard the ld. Counsel for the assessee relied on the following judicial pronouncements in support of its contention that order passed u/s 263 of the Act without valid service of the notice u/s 263 of the Act is invalid. a) CIT vs Ramendra Nath Ghosh 82 ITR 888 (SC) b) Tin Box Co. vs CIT 249 ITR 216 (SC) c) Decision of Hon’ble Calcutta High Court in WP 62 of 2015 M/s. Remahay Stores Pvt. Ltd. Vs ITO dated 04.10.2016. It was submitted by him that the address of the assessee has at all material time been No.4, Ballav Das Street, Kolkata-7 and continues to be the same address till date.
We have given a very careful consideration to the submissions of the ld. Counsel for the assessee and are of the view that the stand taken on behalf of the assessee cannot be sustained. We have while deciding an identical issue in the case of Subhlakshmi 4
5 Skipper Plastics Ltd.(formerly known as Ram Consultancy Co.(1993)P.Ltd.). A.Yr.2008-09 Vanijya Pvt. Ltd. vs. CIT (ITA No.1104/Kol/2014) dated 30.7.2015 for the A.Y. 2009- 10 also dealt with an identical issue. We find that in the impugned order it has been mentioned that service by affixture was made as the assessee was not available at the address given in the return of income. The assessee has not brought on record any material to show that service of notice by affixure was not in accordance with law. In these circumstances we are of the view that the decision relied upon by the ld. Counsel for the assessee will not of any assistance to the plea put forth before us. We therefore are of the view that the objection raised by the assessee in this appeal is without any merit. Consequently the appeal is dismissed.
In the result, the appeal of the assessee is dismissed.
Order pronounced in the Court on 03.02.2017.