M/S JAGADAMBA FINANCIAL MANAGEMENT PVT LTD,KOLKATA vs. C.I.T KOLKATA - III, KOLKATA

ITA No.1491/K0l/2013 & 1631/K0l/2013 IN THE INCOME TAX APPELLATE TRIBUNAL KOLKATA BENCHES D : KOLKATA ITA No.1631/Kol/2014 Duispoled Assessment Year:2008-09 M/s. Sreedeb Suppliers & Traders Pvt Ltd. Golf Tower, 9, Prince Gulam Mohammad Saha Road, Kolkata-700095 _ Vs_ Commissioner of Incomc Tax, Kolkata-L, AayakarBhawan, P-7 , Chowringhee Square, Kolkata 700 069_ PAN AALCS 1079 D ITA No.1491/K0l/2013 Assessment Year:2008-09 M/s. Jagadamba Financial Vs. Management PvtLtd. C/O.Salarpuria Jajodia & Co , 7,C.RAvenue, Kolkata- 700072_ Commissioner 0f Income TTax, Kolkata-L, AayakarBhawan, P-7, Chowringhee Square, Kolkata 700 069_ PAN AABCJ 9320 J (Appellants) (Respondents) Assessce By S.K Tulsiyan, Advocate in ITA No.1631/Kol/13 & Sujay Sen, Advocate in ITA No.1491/K0l/2013 Department By Shri.S.Srivastava,CIT, DR Date 0f Hearing 30.10.2015 Date of Pronouncement 30.10.2015 MINISTRY OF LAW & JUSTICE 077x 2 AppellATE. Tribunal ITA No.1491/K0l/2013 & 1631/K0l/2013 2 ORDER Per_Bench Through these appeals, two different assessccs assail the correctness of separate orders passed by the Commissioners of Income- tax (CIT) u/s 263 of the Income-tax Act; 1961 (hereinafier also called 'the Act' ) in relation to the captioned assessment ycars. Since thesc 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 these two cases are similar inasmuch as relurns were filed by such companies with meagre income; intimations were issued u/s 143(1); thereafter notices uls 148 werc issucd cithcr at the instance of such companies divulging a paltry escapement of income or otherwise 5 assessment orders were passed u/s 143(3) read with section 147 alier making nominal additions and the AOs, during the course of such assessment proceedings, made some formal enquiries about shares issucd by such companies at huge premium by issuing 7aiyi Jlv nJadv O Di Xvien ITA No.1491/Kol/2013 & 1631/K0l/2013 3 notices u/s 133(6) to some of the shareholders and getting satisfied without any further investigation. The jurisdictional CITs have passed orders uls 263 in all such cases, which have been assailed before the Tribunal. 3 We have hcard the rival submissions and perused the relevant material on record. It is relevant to mention that we have disposed of more than 400 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 thc A.Y. 2009-10. 4 Both the sides have fairly admitted that facts and circumstances of the cases under consideration are mutatis mutandis similar t0 those decided earlier. In our aforesaid order in Subhlakshmi Vanijya Pvt. Ltd VS . CIT (ITA No. 1104/Kol/2014 A.Y 2009-10)- we havc drawn the following conclusions: MiniSTRY Of LAW & Jusike T < 57a Koi Appellate Iribunal' ITA No.1491/Kol/2013 & 1631/K0l/2013 As 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 O without premium before amendment to section 68 by the Finance Act, 2012 W.c.f. A.Y. 2013-14 and hence the CIT by means of impugned order uls 263 could not have directed the AO to do S0, is unsustainable. B Failure of the AO to give a logical conclusion t0 the enquiry conducted by him gives power to the CIT to revisc such assessment order; by holding that 1) the enquiry conducted by the AO in such cascs can 1 be construed as a proper enquiry; ii) CIT u/s 263 can set aside the assessment order and direct the AO t0 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 defliciencies in the assessment order on merits on the question of issuc of share capital at a huge premium ; and the AO in the given circumstances can t be said to havc taken a possible view as the revision is sought to be done on the premise that the AO did not make cnquiry thereby rendering the assessment order erroneous and prcjudicial to the interest of the revenue on that score itself: NESTY Of LAW 4 JuSIICE 1 AppELLATE vaa KoLk? TRHBUNEL' ITA No.1491/K0l/2013 & 1631/K0l/2013 5 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 0f 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 opportunily 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 uls 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 t0 pass the order u/s 263 andnot other CIT. F. Addition in the hands of a company can be made uls 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 thc assessee is to defraud the Revenue by either filing rcturns, afier amalgamation, in the old name Or otherwise, then the order passed in the old name is valid. H. Order passed uls 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 . L Order us 263 cannot be declared as a nullity for the notice having not been signed by the CIT, when opportunily 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 mNiS] order void ab initio. At any rate, it is an irregularity. TRY UF LAW 4 1 1 TRIDUNAL Ko ITA No.1491/K0l/2013 & 1631/K0l/2013 6 K Search proceedings do not debar the CIT from revising order u/s passed u/s 147 of the Act: 5_ It is noticed that all or some of the above conclusions are applicable to the appeals in this batch_ In view of the foregoing discussion and following the view taken in Subhlakshmi Vanijya Pvt. Ltd. (supra) we uphold both the impugned orders: 6. In the result, both the appeals are dismissed. The order pronounced in the open court on 30.10.2015_ - [RS. SYAL] [N.V. VASUDEVAN] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated, 30" th October; 2015. RG TaX 345 ] UTi AppeLLATE JRIBUNA 0& "ustice ITA No.1491/K0l/2013 & 1631/K0l/2013 Copy forwarded t0: Appellant Respondent CIT CIT (A) DR, ITAT 2262 AR, ITAT; KOLKATA_ MNStRy Of LAW 8 Gustice Geell-e Ini: