TaxTMI 
TaxTMI 
TaxTMI 
2023 (1) TMI 706
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....n for the purpose of directing the A.O. to hold another investigation when the A.O. had complied with the directions of the predecessor Principal CIT, Kolkata- 4 in the preceding order u/s 264 passed on 11.03.2016. 3. For that the appellant craves leave to add, alter or delete all or any of the grounds of appeal." 2. The assessee in this appeal has assailed the revision order passed by the ld. Pr. CIT u/s 263 of the Act on the ground that the ld. Pr. CIT has wrongly and illegally exercised his revision jurisdiction for the second time, whereby, he has given the directions to the AO (in short the 'AO') to re-examine the same issue which was already subjected to examination and verification during the earlier revision proceedings carried out u/s 264 of the Act vide order dated 11/03/2016 of the then ld. Pr. CIT and whereby, the then ld. Pr. CIT had directed the AO to pass the assessment order afresh, culminating to the impugned assessment order. 3. The ld. A/R submitted that pursuant to the directions given by the ld. Pr. CIT vide order dated 11/03/2016 passed u/s 264 of the Act, the AO re-examined the issue and verified the details and evidence on record and thereafter passed ....
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....ereafter, the ld. Pr. CIT vide impugned order dated 08/03/2019 exercising his revision jurisdiction u/s 263 of the Act, set aside the assessment order dated 29/04/2016 holding that the above stated issue relating to share application money and share premium received, needs further verifications and that the assessment order passed by the AO was erroneous and prejudicial to the interest of the revenue on the ground of lack of adequate enquiries by the AO. He directed the AO to frame the assessment afresh after making due enquiries and verifications and after giving the assessee a reasonable opportunity to produce documentary evidence which it may choose to rely on for substantiating its own claim. 7. At the outset, the ld. Counsel for the assessee invited our attention to the various details furnished by the assessee, not only during the original assessment proceedings but also, during the subsequent assessment proceedings. The ld. Counsel for the assessee has further submitted that even all the share subscribers had duly responded to the notice issued u/s 133(6) of the act and acknowledged the investment and further they have furnished the details including board resolution along ....
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....tity, creditworthiness of the subscribers and the genuineness of the transactions were well established and that the source of the share application money was duly explained. The AO also verified the issue relation to disallowance u/s 40(a)(ia) of the Act. 9. We have also gone through the impugned revision order passed u/s 263 of the Act and found that the entire order of the ld. Pr. CIT is a general order and the ld. Pr. CIT has not pointed out specifically as to why he was not satisfied and to which of the details, furnished by the assessee. The ld. Pr. CIT has neither mentioned the name and details of the share subscribers nor has he mentioned why he did not believe the identity or creditworthiness of a particular share subscriber, for directing the AO to make further enquiries. 9.1. At this stage, it will be relevant to discuss the relevant provisions of Section 263 of the Act. "Section 263(1) of the Income- Tax Act reads as under: (1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the 2 Assessing] Officer is erroneous in so far as it is prejudicial to the interests of the revenue....
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....AO was erroneous so far as it was prejudicial to the interest of Revenue. We further note that the Ld. Pr. CIT did not raise any query as to what enquiries were made by the AO before proceeding to pass the assessment order in question. In our view, once the Ld. Pr. CIT had proceeded to make an enquiry regarding the genuineness of the claim of the assessee, he was supposed to make a prima-facie opinion which may not be a concluding opinion to hold that the order of the AO in his view was erroneous so far as it was prejudicial to the interest of Revenue. The opinion of the Commissioner that the AO had not made proper enquiries or verifications should be based on his objective satisfaction and not a subjective satisfaction from the assessment order. Merely because, the assessment order in question is not a detailed order that itself, does not mean that the AO had not made enquiries in this respect. Admittedly, the AO asked the assessee to furnish the necessary details from time to time which were duly furnished by the assessee and after considering the same the AO passed the assessment order. 11. It is pertinent to mention here that a deeming fiction has been created in section 263 o....
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....ld not be any finality to the assessment. The Explanation 2(c) to Section 263(1) of the Act does not give unbridled powers to the ld. Pr. CIT to simply set aside the assessment order by saying that the AO was required to make further enquiries without pointing out as to what was lacking in the enquiries made by the AO and why the ld. Pr. CIT was not satisfied with the reply and evidence furnished by the assessee. 12. We further note that the issue is squarely covered in favour of the assessee by the decision of the Co-ordinate Bench of ITAT Kolkata in the case of Amritrashi Infra (P) Ltd. vs PCIT in ITA No. 838/Kol/2019; Assessment Year 2012-13; order dt. 12/08/2020, wherein the Tribunal in almost identical circumstances, while relying upon the various decisions of the Higher Courts had concluded as follows:- "56. To sum up, we find from the above said facts that the Second AO has conducted enquiry as directed by the First Ld. Pr. CIT on the specific subject matter i.e. share capital and premium collected by the assessee-company. Therefore, the finding of Second Pr. CIT that the Second AO has not conducted enquiry is incorrect and is flowing from suspicion only. And as discussed....
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.... office has discharged his dual role as an investigator as well as an adjudicator. Looking from another angle of doctrine of merger canvassed before us, we note from the facts of this case that the second Ld. Pr. CIT - 4 by passing the second revisional order dated 14.03.2019 has substituted the First Pr. CIT's order passed u/s. 263 of the Act dated 23.08.2016 with his own order which he cannot do since the second assessment order/re-assessment of the Second AO dated 07.12.2016 was pursuant to the first revisional order of the First Ld. Pr. CIT and on the very same subject matter on which specific directions/instructions were given by the First Ld. Pr.CIT, which direction since having been complied by the AO, brings into operation the doctrine of merger the subject matter i.e. share capital & premium collected by assessee company. Resultantly the second Ld. Pr.CIT, again cannot rake-up the same subject matter without the second Ld. Pr.CIT in the second revisional order spells out where the error happened to second AO as an investigator or adjudicator, which exercise the Second Ld. Pr.CIT has not done, so the second Ld. Pr. CIT cannot be permitted to again ask the AO to start th....