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Income Tax Appellate Tribunal, KOLKATA BENCHES :D : KOLKATA
Before: SHRI P.M.JAGTAP, AM & SHRI N.V. VASUDEVAN, JM
ORDER Per N.V.Vasudevan, JM Through these batch of appeals, different assesses assail the correctness of separate orders passed by the Commissioners of Income-tax (CIT) u/s 263 of the Income- tax Act, 1961 (hereinafter also called ‘the Act’) in relation to the captioned assessment years. Since all these appeals are based on largely similar facts and common grounds of appeal, we are proceeding to dispose them off by this consolidated order for the sake of convenience.
2. Briefly stated the facts of all the appeals 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 1111/Kol/2013 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.
We have heard the ld. DR and the learned counsels for the Assessee perused the relevant material on record.
It is relevant to mention that more than 400 cases involving same issue were fixed before us, which have been heard. All the ld. ARs were given opportunity to argue their matters to full extent. Some of the ld. ARs argued the matter on merits and all other ARs admitted that facts and circumstances of all the cases were mutatis mutandis similar to those argued. Thereafter, the remaining case specific issues were argued by all the ld. ARs, pertaining to their respective cases. We have passed a separate lead order in the case of M/s SubhlakshmiVanijyaPvt. Ltd., vs. CIT (ITA No. 1104/Kol/2014 A.Y. 2009- 10) also covering other eighteen cases dealing with all the issues raised before us in more than 400 appeals, including the instant batch, for which we are passing separate orders. Following conclusions have been drawn in the lead order : - 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 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) & 1111/Kol/2013 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.
It is noticed that all or some of the above conclusions drawn are applicable to the appeals in this batch. Mr.S.M.Surana, learned counsel for the Assessee in Assessee and therefore the order passed u/s.263 of the Act should be set aside and the matter remanded to CIT for 1111/Kol/2013 fresh disposal after affording opportunity of being heard. He relied on a decision of the Hon’ble Calcutta High Court in the case of M/S/Ratnagiri Commercial Pvt. Ltd. and another Vs. ITO wherein the Hon’ble Calcutta High Court had laid down that in case of non service of notice u/s.263 of the Act, the order u/s.263 has to be set aside for fresh disposal to decide after affording opportunity of being heard. However in the present case, we find that the CIT had served notice on the Assessee by affixture as stated in the impugned order. Therefore the decision referred to by the learned counsel for the Assessee is not applicable to the facts of the present case.
The learned counsel for one of the Assessee Mr.Sujoy Sen, had raised issues by way of additional grounds to the effect that the CIT who passed the impugned order in his case did not have the requisite jurisdiction and that there was no proper service of notice u/s.263 and that there was lack of proper opportunity of being heard afforded to the Assessee. All these issues have already been dealt with in the lead order and are applicable to the facts of the Assessee’s case as well. Following the view taken in the lead orders, we uphold all the impugned orders.
In the result all the appeals are dismissed.
The order pronounced in the open court on 01.06.2016.