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Income Tax Appellate Tribunal, KOLKATA BENCHES : D : KOLKATA
Before: SHRI R.S. SYAL, AM & SHRI N.V. VASUDEVAN, JM
ORDER Through this batch of appeals, different assessees 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 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.
Both the sides have fairly admitted that facts and circumstances of the cases under consideration are mutatis mutandis similar to those decided earlier except for the arguments taken separately in some of the cases under consideration, which we will advert to a little later. 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.
Now we espouse the separate points raised by the ld. AR. The first argument was that some of the orders are unsigned, unstamped and unendorsed. The ld. DR contended that the assessee has simply filed copies of the orders of the ld. CIT. It was submitted that all the orders were otherwise properly signed, stamped and endorsed. He offered to produce the impugned orders in original, for which the ld. AR did not show any serious interest. In such circumstances, we accept that the orders were properly signed.
The ld. AR then argued that no notice was ever served upon the assessee and notice was served at old address through affixation. We do not find any substance in this argument as this point has also been thoroughly discussed in the lead order in Subhlakshmi Vanijya Pvt. Ltd. (supra), and the ld. AR has not drawn our attention towards any distinguishing factor prevailing in the instant cases. No material has been brought on record to demonstrate that the new address was duly communicated to the Revenue. Further the ld. AR has accepted in his broader points separately urged before us that the order sent by the speed post was duly served at the old address. Once it is accepted that the order has been served to the assessee at the old address, it shows that the assessee was present at the old address but willingly avoiding the service of notice made by the ld. CIT. In such circumstances, the ld. CIT was left with no option but to serve the notice by affixture at the said address.
The next argument was that the allotment was made against purchase of investments and it was not a case of cash credit. In our considered opinion, this factor does not change the character of the transaction of issue of bogus shares at hefty premium in a clandestine manner.
The next argument was that notices u/s133(6) sent to all the shareholders were complied with. Again, we are unable to comprehend that how this point is going to change the complexion of the case. It is not the case of the Revenue that the notices were not complied with by the alleged shareholders. Rather, the position is that these were paper transactions.
As regards the last point of merger, we find that this issue has also been discussed in the lead order.
The ld. AR admitted that but for the above, all other issues are covered by the lead order. In view of the foregoing discussion and following the view taken in Subhlakshmi Vanijya Pvt. Ltd. (supra), we uphold all the impugned orders.
In the result, all the appeals are dismissed.
The order pronounced in the open court on 30.10.2015.