TaxTMI 
TaxTMI 
TaxTMI 
2014 (11) TMI 133
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....ection 263 and the ld. CIT erred in law as well as on facts in assuming jurisdiction u/s 263 and setting aside the assessment with a preconceived notion and a prejudiced mind. The order so passed is liable to be cancel led. (3)That the ld. CIT erred in holding that receipt of share capital was not properly investigated and was not justified in imposing her own view of the manner in which enquiry was to be conducted. The directions given by the ld. CIT amount to making a roving & f ishing enquiry, which is outside the scope of the provisions of section 263. (4) That the ld. CIT erred in law in invoking the provisions of section 263 merely on the basis of the so called 'background' wrongly conceived by her which had no application in the facts of the appellant's case. The ld. CIT erred in misconstruing the meaning & purport of the principles decided in the Court decisions relied on by her which had no relevance in the facts of the appellant' s case. 3. None represented on behalf of the assessee and Shri Ajay Kumar Singh, CIT, D.R. represented on behalf of the Revenue. 4. The appeal of the assesse had been filed on 14.05.2013. The assesse had filed Stay Petition in S.P. No. 73/Koo....
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....racted below: - "Today, when this appeal was called for hearing, the ld. Counsel for the assesse, Shri J .M. Third, Advocate stood up and asked for adjournment for the reason that he could not prepare the appeal as he was busy in some family affairs and he was out of station for the same. This is despite the fact that the matter was adjourned on last date with a clear direction that no further adjournment will be given but in the interest of natural justice and keeping the option of fair play open, we grant one more adjournment and for this the ld. CIT(DR) has consented. However, the ld. Counsel for the assessee is directed to give the name and address of Managing Director and Directors of the Company by 8th July, 2014. The Revenue is also directed to bring assessment records as well as the record file of revision proceedings under section 263 of the Act. In terms of the above, the matter is adjourned to 05.08.2014. No further adjournment wi l l be given on that date. Both the parties are informed in the Open Court". 6. On 05.08.2014, when the case was called for hearing, again adjournment was sought vide a letter dated 04.08.2014, which was vehemently opposed by the ld. CIT, D.....
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....osed of exparte qua the assessee. 7. Ld. CIT, D.R. submitted that the order passed under section 263 by the ld. CIT, Kolkata-I I , Kolkata was valid. It was the submission that the assessee is a Company which has issued its shares of Rs. 10/- at a premium of Rs. 90/- per share to an extent of 24,55,000 shares. It was the submission that 100 rupees was including a premium. Ld. CIT, D.R. placed before us the Certificate of Incorporation of the assessee-company to be of 2007-08. It was the submission that when the Company was incorporated, there were two subscribers to the shares being Shri Ganpat Jain and Shri Subodh Tody. I t was the submission that the said Shri Ganpat Jain has not filed his return after the assessment year 2006-07. It was the submission that the last return filed by Shri Ganpat Jain was for the assessment year 2006-07 and there is no return after that . Regarding Shri Subodh Tody, it was the submission that there is no evidence itself of filing of return regarding the said person. It was the further submission that 263 was invoked by the ld. CIT on the ground that unaccounted money was being converted through a masquerade or a channel of investment in the share c....
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....otment of the shares at the premium. On 17.05.2010, the assessee had appeared and had filed certain written compliances. It was the submission that in the said compliance though there was no requisition in respect of the details of the share capital received. The assessee filed certain details wherein the names and addresses and Permanent Account numbers of various companies, who had invested in the shares of the assessee-company at a premium, had been given. It was the submission that notices were issued on 19.05.2010 under section 133(6) to the share applicants who are allotted shares of 80000 and above. It was the submission that even the Vokalatnama of the persons, who had appeared before the Assessing Officer did not contain the signature of the assessee. It was the further submission that 133(6) notices which had been issued to the various share applicants were hand delivered to the assessee. The acknowledgments contained the same signature as the person who has filed the present appeal. It was the submission that though certain details have been filed in response to the 133(6) they were incomplete and the Assessing Officer had also not verified nor discussed the replies. It ....
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.... the identity, genuineness or the existence of the share applicants. It was also the submission that whether the shares have been allotted to the share applicants have also not been shown. It was the submission that the consequential order having been passed giving effect to the order under sect ion 263, in view of the decision of the Hon'ble Jurisdictional High Court in the case of Kai lash Prasad Jain in ITA 232/Kol/2006 dated 12.11.2010, the appeal f i led by the assessee against the order passed under section 263 was liable to be dismissed as infructuous. Ld. D.R. also placed reliance upon the decision of the Coordinate Bench of this Tribunal in the case of Jet Age Securities Pvt. Ltd. in ITA No. 637/Kol/2013 dated 18.07.2014 for the assessment year 2008-09, wherein on account of the consequential assessment order having been passed, the appeal filed by the assessee against the order passed under section 263 has been held to be infructuous. It was also the submission that the Hon'ble jurisdictional High Court in the case of Zigma Commodities Pvt. Ltd. in W.P. No. 281 of 2014 vide an order dated 08.05.2014 has held as an obiter dicta that the Commissioner had received the record....
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....ee has shown purchases of unquoted shares of various other companies. The list of the companies whose shares have been purchased shows that the assessee is holding the shares of the companies from whom the assessee has received share application money. The P&L A/c. of the assessee shows no sales at all . Balance-sheet of the assessee shows no debtors but the cash and Bank balances. The cash in hand being at Rs. 5,18,633/- . It also shows TDS receivable of about Rs. 50 lakhs and share application money Rs. 84,44,684/- . This being the first year of business of the assessee, TDS receivable of Rs. 50 lakhs should itself drawn the attention of the Assessing Officer when there is no sales, no contracts, nothing whatsoever other than the investment in shares of various companies. The total expenditure as recorded in the Profit & Loss A/c. is barely Rs. 5 lakhs, then how the TDS receivable of Rs. 50 lakhs came into play. Surprisingly this has not drawn the at tention of the Assessing Officer. Further facts in the present case shows that most of the debits into the assessee's Bank account is by cash cheque. Coming to the assessment order originally passed shows that in the course of origin....
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....ther fact that in the subsequent proceedings giving effect to the order of the ld. CIT passed under sect ion 263, no reply whatsoever has been received in response to the not ices under section 133(6) which has been sent by post clearly shows that the order passed under section 143(3) read with sect ion 147 by the Assessing Officer on 07.07.2010 was clearly erroneous and prejudicial to the interest of revenue and the ld. CIT, Kolkata- II , Kolkata has rightly invoked revisionary powers under sect ion 263. This view of ours also find support from the decision of the Hon'ble Full Bench of the Guwahati High Court in the case of Jawahar Bhattacharjee reported in 341 ITR 434 (Gao.)(FB), wherein the Hon'ble Full Bench has categorically held "not holding such enquiry as is normal and not applying mind to the relevant material in making an assessment would certainly be erroneous assessment warranting exercise of revisional jurisdiction". 10. Further the above facts clearly show that the requisite and proper inquiries were not done in respect of the share application money received by the assessee in the course of original assessment order passed on 07.07.2010 nor has the Assessing Officer....
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....peal has been signed and verified only on 31.07.2014. Thus clearly even before the Tribunal the assessee is at tempting evasive method and no facts are being placed. However, we are not deciding this issue as we have already on the issue of jurisdiction under section 263 upheld the order of the ld. CIT. 11. Coming to the alternative argument of the ld. D.R. that the consequential assessment order having been passed, the appeal filed by the assesse has become infructuous and must be dismissed as such. We may mention here that the decision of the Coordinate Bench of this Tribunal in the case of Jet Age Securities Pvt. Ltd. referred to supra was the order passed by the same coram and that the order was passed only on the ground that the ld. AR in that case had agreed to let the appeal be dismissed as infructuous as he was sure of gett ing rel ief on meri ts. Coming to the decision of the Hon'ble jurisdictional High Court of Calcutta in the case of Kailash Prasad Jain, it is not iced that the Hon'ble jurisdictional High Court has categorically held that the appeal factually had become infructuous but not legal y in the said case. Hon'ble jurisdictional High Court had held that conside....