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Income Tax Appellate Tribunal, KOLKATA BENCHES :D : KOLKATA
Before: SHRI R.S. SYAL, AM & SHRI N.V. VASUDEVAN, JM
ORDER Per Bench
Through this appeal, the assessee assails the correctness of the order dt. 4.3.2013 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 assessment year 2008-09.
Briefly stated the facts of the case are that the return was filed by the assessee company with income of Rs.452; intimation was issued u/s 143(1); thereafter notices u/s 148 was issued on the ground that Preliminary expenses to the tune of Rs.1,620 were not allowable; assessment order was passed u/s 143(3) read with section 147 after making addition of Rs.1,620 and the AO, during the course of such assessment proceedings, made some formal enquiries about shares issued by the assessee company at huge premium by issuing notices u/s 133(6) to some of the shareholders and getting satisfied without any further investigation. The jurisdictional CIT has passed orders u/s 263, which has been assailed before the Tribunal.
The ld. AR has filed application for admission of the following additional grounds, which read as under:-
(i) That the order passed by the CIT u/s 263 of the Income-tax Act, 1961 dated 11.03.2013 is barred by limitation in as much as the order u/s 143(3)/147 dated 29.4.2010 was re- 2 opened and completed in relation to Preliminary expenses, which were duly brought to tax and not for the Share Capital raised during the year. (ii) That the issue relating to raising of Share capital being not the subject matter of reason recorded and the assessment order passed on 29.04.2010, the CIT, Kol-I erred in having exercised his/her power u/s 263, although the time limit for passing of order u/s 263(1) is within two years from the date of the original order. (iii) That in any case, the original order having been processed u/s 143(1) within 31.3.2010, the time limit prescribed u/s 263(2) having already expired, the ld. CIT erred in assuming jurisdiction on 31.12.2012 and passing the order u/s 263 dated 11.3.2013. (iv) That admittedly, the original order having been passed u/s 143(1), the condition precedent for assuming jurisdiction u/s 263 in terms of Calcutta High Court’s order in the case of Hilltop Holdings India Ltd. vs. CIT, reported in 278 ITR 501 being absent , no order u/s 263 can be passed against 143(1) order.
The ld. AR argued that these grounds were omitted to be taken in the Memorandum of appeal. He stated that since these grounds involve substantial questions of law, the same be admitted. The ld. DR did not raise any serious objection to the admission of the above additional grounds.
After considering the submissions from both the sides, we are satisfied that the above grounds deal only with the questions of law
arising from the facts on record. Following the judgment of the Hon’ble Supreme Court in National Thermal Power Company Limited vs. CIT (1998) 229 ITR 383 (SC), we admit the above grounds for disposal on merits.
Insofar as the merits of the above additional grounds are concerned, the ld. AR was fair enough to concede that similar grounds have been decided by the tribunal against the assessee in its lead order
passed in Subhlakshmi Vanijya Pvt. Ltd. & Ors. (infra). In fact, no separate arguments were advanced in support of such grounds by contending that the facts are similar to those already considered and decided by the tribunal in the above referred case and he was raising these grounds for keeping the matter alive before the Hon’ble High
Court. In view of the above submissions, we dismiss these additional grounds of appeal on merits.
7. Qua the grounds taken up in the memorandum of the appeal, we
have heard the rival submissions and 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.
Both the sides have fairly admitted that facts and circumstances of the case 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 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.
It is noticed that some of the above conclusions are applicable to the instant appeal. In view of the foregoing discussion and following the view taken in Subhlakshmi Vanijya Pvt. Ltd. (supra), we uphold the impugned order.
In the result, the appeal is dismissed.