TaxTMI 
TaxTMI 
2017 (3) TMI 138
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....d based on such disclosure proceedings u/s 147 of the Act were initiated. In such proceedings the AO brought to tax consultancy fees not disclosed of Rs. 24,000/- and also disallowed share issue expenses of Rs. 5,000/- which according to the AO were not in the nature of revenue expenditure. Consequently the AO passed an order u/s.147 of the Act determining the total income of the Assessee at a sum of Rs. 29,790/-. While completing the assessment the AO also made a passing reference to the fact that the assessee has raised share capital during the previous year by issue of shares at a premium and also made a reference to the fact that notice u/s 133(6) of the Act were issued to the fresh share applicants and replies were verified. There is no other discussion in the order of assessment about any other aspect of the receipt of share capital by the assessed during the previous year. The AO passed an order u;/s 143(3) r.w.s. 147 of the Act on 07.08.2012. 4. The CIT in exercise of his powers u/s 263 of the Act was of the view that the aforesaid order of the AO was erroneous and prejudicial to the interest of the revenue in as much as the AO did not make a thorough and proper enquiry ....
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....6,00,000/-.introduced in this case. The A.O. should examine the source of share capital by proper enquiry through which the money has been introduced in this company as share capital and also examine the directors of subscriber companies by issuing summons u/s 131 of the I.T. Act. The A.O. should conduct thorough independent enquiries to verify the documents filed before him in respect or proof of subscription to share-capital/share-premium. The A.O. should pass speaking order after providing reasonable opportunity to the assessee and verifying the source of share capital including the share premium of all the subscribers so as to ascertain the true nature of transactions which will bring to the fore the reality of transactions, and tax accordingly. " 8. Aggrieved by the order of CIT the assessee has preferred the present appeal before the Tribunal. At the time of hearing it was submitted by the ld. DR that the case of the assessee is similar to the case of Subhlakshmi Vanijya Pvt. Ltd. vs. CIT (ITA No.1104/Kol/2014) dated 30.7.2015 for the A.Y. 2009-10 and the various aspects considered and decided by the Tribunal are squarely applicable to the facts of the present case. The fo....
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....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 otherw....
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....been examined was not a requirement contemplated in law and such observations of the CIT in the impugned order passed u/s 263 of the Act are unsustainable. It was also submitted by him that the receipt of share premium is a capital item and not in the nature of income and in this regard he placed reliance on the CBDT Instruction No.2 of 2015 dated 29.01.2015. It was also submitted that the impugned order of the CIT merely states that order of the AO is prejudicial to the interest of the revenue and nowhere it has been mentioned that order of the AO is erroneous. According to him therefore the condition precedent for exercising of powers u/s 263 of the Act does not exist. 11. We have given a very careful consideration to the rival submissions. From a reading of the entire of the CIT it is clear that the main plank of the case of CIT is that mere sending notices u/s 133(6) of the Act to the various share applicants and getting their replies was not sufficient, in the given facts and circumstances of the case, namely the receipt of huge premium by a company which was a newly formed company. It is for this reason of lack of proper inquiry that proceedings u/s 263 of the Act had been....