TaxTMI 
TaxTMI 
2023 (5) TMI 1298
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....ncome Tax was without jurisdiction and the order passed on the basis of such notice was bad in law hence the same be quashed and or annulled. (3) For that in the facts and circumstances of the case the Learned Commissioner of Income Tax erred in holding that the assessment order passed by the learned assessing officer in the case of the appellant with inadequate inquiry and hence erroneous and prejudicial to the interest of revenue and thereby setting aside the said assessment order u/s 263 of the Income Tax Act 1961. (4) For that in the facts and circumstances of the case the Learned Commissioner of Income Tax erred in holding that the assessment order passed by the learned assessing officer in the case of the appellant was erroneous and prejudicial to the interest of revenue and thereby setting aside the said assessment order u/s 263 of the Income Tax Act 1961. (5) For that in the facts and circumstances of the case the Learned Commissioner of Income Tax failed to appreciate that the assessment order was not erroneous and prejudicial to the interest of revenue and as such the Learned Commissioner of Income Tax had no jurisdiction to interfere with the said assessment ord....
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....ng the year but disallowed the expenses of Rs.1,00,750/- and assessed the income at Rs.1,17,690/-. 4. Subsequently ld. CIT called for the assessment records and noticed that the ld. Assessing Officer has not examined the transactions of share capital and share premium received by the assessee during the year and thus assumed jurisdiction under section 263 of the Act. In the show-cause notice dated 01.02.2023, it was stated that "on examination of records, it was found that 14,69,500 shares were issued by the said company at face value of Rs. 10/- each at a premium of Rs.90/- per share. In other words, the assessee company raised a paid up share capital of Rs.146 lacs with premium of Rs.13.23 crores. Further on perusal of the assessment records it is found that requisite inquiries were not conducted regarding the issue as to what prompted the subscribers to the shares to pay such substantial premium on shares of a little known company having no or insignificant business activities. It is apparent that the order was passed without application of mind". 5. The assessee filed written submission on 27.02.2013 stating that the ld. Assessing Officer has passed the order after applying h....
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.... 425 pages and made twofold arguments. Firstly it is contended that the reopening proceedings carried out by the assessee vide issuance of notice under section 148 of the Act on 07.12.2010 and thereafter proceedings completed on15.02.2011, are bad-in-law and non-est since statutory notice under section 143(2) of the Act was not issued to the assessee and, therefore, since the subject matter of the revisionary proceedings i.e. assessment order dated 15.02.2011 is nullity, bad-in-law and non-est, therefore, revisionary proceedings under section 263 cannot be carried out on the basis of such non-est assessment and the same deserves to be quashed. 9. The second fold of contention is that extensive inquiries and investigations were carried out by the ld. Assessing Officer before drawing one of the possible views and the same is evident from the order-sheet, which is part of the assessment records which indicate that all the relevant documentary evidences regarding the alleged share capital and share premium received were filed including the financials, bank statements, income tax return, confirmation letters and identity proof etc. In most of the cases, ld. Assessing Officer has issued....
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....lkata Bench 69 - 80 13. M/s Charam Vincom Pvt. Ltd. vs. I.T.O.,Ward-3(1), Kolkata 758/Kol/2019 dated 01.01.2020 The Hon'ble ITAT, Kolkata Bench 81 - 85 14. Minimax Commerce (P.) Ltd. vs. ACIT, Raipur (2021) 133 taxmann.com 188 The Hon'ble ITAT, Raipur Bench 86 - 90 15. Parveen Kumar Mittal vs. PCIT (2021) 63 CCH 0256 The Hon'ble ITAT, Chandigarh 91 - 101 16. Supersonic Technologies (P) Ltd. Vs. PCIT (2019) 175 DTR 30 Hon'ble ITAT, Delhi Bench 102 - 121 17. Pioneer Distilleries Limited Vs. PCIT-1, Aurangabad ITA No. 479/PUN/2017 The Hon'ble ITAT, Pune Bench 122 - 129 Argument:- No addition u/s 68 if identity of subscribers has been furnished. 18. CIT vs Lovely Exports (P) Ltd (2008) 216 CTR 195 The Hon'ble Supreme Court 130 Argument:- Jurisdiction u/s 263 cannot be assumed in case of inadequate enquiry: 19. PCIT vs. Singhal Enterprises (P) Ltd. (2022) 6 NYPCTR 973 (Cal) The Hon'ble High Court of Calcutta 131 - 134 20. PCIT Vs. SPML Infra Ltd. (2022) 6 NYPCTR 1314 (Cal) The Hon'ble High Court of Calcutta 135 - 138 Argument:- Issuance of notice u/s 133(6) of the Income Tax Act, 1961 held to be sufficient enquiry 21.....
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....ia 328 - 332 36. Bedi & Co. Pvt. Ltd. vs. CIT (1983) 144 ITR 0352 The Hon'ble High Court of Karnataka 333 - 336 37. Baba Bhoothnath Trade & Commerce Ltd. vs. ITO ITA No. 1494 /Kol./2017 The Hon'ble ITAT, Kolkata 337 - 362 38. CIT vs. Roseberry Mercantile (P) Ltd. GA No.3296 of 2010 ITA No. 241 of 2010 The Hon'ble High Court of Kolkata 363 - 365 Argument:- Jurisdiction u/s 263 cannot be assumed for making roving or fishing inquiry 39. Jagu Dnyanu (2022) Deokate vs. ITO 36 NYPTTJ 1504 (Pune) "A The Hon'ble ITAT,PUNE 366 BENCH 371 Argument:- If AO adopts plausible view then usurpation of jurisdiction u/s 263 is bad in law 40. Malabar Industrial Co. Ltd. Vs. CIT (2000) 243 ITR 83 (SC) The Hon'ble Supreme Court of India 372 - 377 41. CIT vs. J.L. Morrison (India) Limited (2014) 366 ITR 593 (Cal) The Hon'ble High Court of Calcutta 378 - 405 42. Commissioner of Income Tax Vs. Max India Ltd. (2007) 213 CTR 0266 (SC) The Hon'ble Supreme Court of India 406 - 407 43. Commissioner of Income Tax Vs. Nirav Modi (2017) 390 ITR 0292 The Hon'ble High Court of Bombay 408 - 414 44. Hill Queen Investm....
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....body of the assessment order, it is stated by the ld. Assessing Officer that notices under section 143(2) and 142(1) of the Act were issued and duly served upon the assessee. However, our attention is drawn to the RTI application dated 31.12.2020 filed by the assessee for providing the certified copies of replies and documents submitted by the assessee during the assessment on both the occasions and also notices/show-cause notices issued during the assessment proceedings under section 143(3) as well as 144 read with respect to section 263 of the Act. However, when the document were supplied to the assessee, the copy of notice under section 143(2) of the Act, if any, issued/served upon the assessee, was not supplied. Further, the assessee specifically requested to provide the copy of notice u/s 143(2) and proof of service, inviting attention to following documents:- (a) Letter filed on 05.09.2014 before the Learned DR for providing the certified copy of documents on assessment record, copy of said letter is placed on Page No. 1 of Supplementary Paper Book filed on 27.09.2022. (b) Letter dated 06.01.'20 filed before the Learned A.O - copy placed on Page No.23 of the PB filed on 2....
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.... Hon'ble High Court of Delhi 34-40 2. PCIT-08 Vs. Shri Jai Shiv Shankar Traders Pvt. Ltd. ITA No.519/2015 Hon'ble High Court of Delhi 41-49 15. Further the assessee placed reliance on following judicial pronouncements wherein it has been held that if the assessment order passed by the Learned A.O. is bad-in- law and non est then the Learned CIT cannot assume jurisdiction over such assessment order, which does not exist in the eyes of law:- S.No. TITLE CITATION AUTHORITY Following Page No. of LPB 1 Keshab Narayan Banerjee vs. CIT (1998)66 CCH 0874 Hon'ble High Court of Calcutta 50-57 2 Concord Infra Projects Pvt. Ltd. vs. PCIT (2021)63 CCH 0117 Hon'ble ITAT, Kolkata Bench 58-68 3 Classic Flour and Food Processing vs. ITO, Wd- 11(4), Kolkata, 764 to 766/Kol/2014 dated 05.04.2017. Hon'ble ITAT, Kolkata Bench 69-80 4 M/sCharam Vincom Pvt. Ltd. vs....
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....ssioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was....
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....of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263. 19. Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC)has laid down following ratio with regard to provisions of section 263 of the Act: "There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue' has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are p....
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....Pvt. Ltd. 1,05,00,000 /- 89 12 PavitraTrexim Pvt. Ltd. 1,25,00,000/- 90 13 Sakar Sales Pvt. Ltd. 91,50,000/- 91 Subtotal - A 11,67,50,000/- Other Shareholders:- SI. No. Name of the Shareholder Amount of Investment in share capital of assessee 1 Ankit Dealers Pvt. Ltd. 35,00,000/- 2 Gouri Merchandise Pvt. Ltd. 10,00,000/- 3 HaraparbatiTracom Pvt. Ltd. 20,00,000/- 4 Luminant Traders Pvt Ltd 30,00,000/- 5 Pacific InfiwarePvt Ltd 30,00,000/- 6 RashinoVyapaarPvt Ltd 32,00,000/- 7 Response Vincom Pvt. Ltd.. 36,00,000/- 8 S.K.Fintex Pvt. Ltd. 45,00,000/- 9 Starshine Towers Pvt. Ltd. 24,00,000/- 10 Tanya Enclave Pvt. Ltd. 40,00,000/- Subtotal - B 3,02,00,000/- Grand Total - (A+B) 14,69,50,000 /- 22. It is quite apparent that the Ld. AO had carried out extensive inquiries and investigation in respect of as many as 13 shareholders from whom the aggregate amount of share capital raised was Rs.l1,67,50,000/-, thus, virtually the entire share capital was thoroughly examined by the Ld. AO and since the results of ....
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....r Pvt. Ltd. U29253WB2007PTC119721 AADCG2325G 65,00,000/- 4 Greenfield Vinimay Pvt. Ltd. U51109WB2007PTC118709 AADCG0183A 90,00,000/- 5 Idea Vinimay Pvt. Ltd. U51109WB2008PTC126214 AABC19051P 65,00,000/- 6 Kasturi Barter Pvt. Ltd. U51109WB2008PTC121667 AADCK2518H 90,00,000/- 7 PavitraTrexim Pvt. Ltd. U51109WB1993PTC060167 AABCP5170C 1,25,00,000/- 8 Pearl Distribution Pvt. Ltd. U51109 MH2007PTC283633 AAECP3592M 72,00,000/- 9 Rasraj Dealer Pvt. Ltd. . U51909GJ2007PTC071066 AADCR7489N 95,00,000/- 10 Reliable Heights Pvt. Ltd. . U70101WB2007PTC117588 AADCR8214M 1,05,00,000/- 11 Sakar Sales Pvt. Ltd. U45400GJ2007PTC068034 AALCS2545L 91,50,000/- 1....
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....an Inspector to examine the claim of the assessee about the identity and creditworthiness of the share subscribers and genuineness of the transactions to which a assessee favoring report was filed by the Inspector dated 10.02.2011 and the same is reproduced below:- 27. Further we notice the following details of the share subscriber companies were filed before the ld. Assessing Officer for necessary examination:- 28. The creditworthiness of the subscribe companies was self evident from the fact that the payments were received on account of share capital through proper banking channel from all the subscriber companies. As far as genuineness of the transaction is concerned, it is self evident from the fact that all the subscriber companies to whom the notices were issued u/s 133(6) had duly confirmed the factum of investment having been made in the shares of the assessee company that too through proper banking channel. We find support from the following judicial pronouncements: 1 PCIT Vs. M/s Chain House International Pvt. Ltd., (2018) 408 ITR 561 (MP) The Hon'ble High Court of Madhya Pradesh 434 - 460 2 PCIT Vs. M/s Chain House International Pvt. Ltd., (2019) 2 SLPCTO 6....
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....licable in the year under consideration which is pertaining to assessment year 2009-10 i.e. prior to A.Y 2013-14 and in this regard, reliance is placed on the decision of this Tribunal in the case of Starpoint Construction (P) Ltd. vs. PCIT reported in(2022) 94 ITR TRIB (Trib) 299 (Kol), and in the case of PCIT Vs. M/s Chain House International Pvt. Ltd., ITA Nos. 112, 111 and 110/2018, dated 07.08.2018 (2018) 408 ITR 561 (MP), against which the SLP filed by the Revenue has been dismissed by the Hon'ble Supreme Court. 31. Further we find that issuance of notice under section 133(6) of the Act tantamounts to be a sufficient enquiry as held by the Hon'ble Jurisdictional High Court vide the recent order dated 31.10.2022 in the case of PCIT vs. BMR Commercial Private Limited reported in (2022) 6 NYPCTR 1229 (Cal), wherein Hon'ble Court upheld the order of this Tribunal, wherein this Tribunal had found that enquiry was conducted by the Learned A.O by issuance of notice u/s 133(6) of the Income Tax Act, 1961 and held it to be sufficient inquiry and formation of plausible view by the Learned A.O based on the results of inquiry conducted by issuing notices u/s 133(6). The Hon'ble Calcutta....
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....e to notorious practice:- S.No. TITLE CITATION AUTHORITY Following Page No. of LPB 1 Lalchand Bhagat Ambica Ram vs. CIT (1959) 37 ITR 288 Hon'ble Supreme Court of India 303-318 2 CIT vs. Discovery Estates P. Ltd TS-63-HC- 2013 (Del) Hon'ble High Court of Delhi 319-327 iii) No addition merely by referring to the surrounding circumstances. S.No. TITLE CITATION AUTHORITY Following Page No. of LPB 1 CIT vs. Bedi & Co. Pvt. Ltd. (1998) 230 ITR 0580 Hon'ble Supreme Court 328-332 2 Bedi& Co. Pvt. Ltd. vs. CIT (1983) 144 ITR 0352 Hon'ble High Court of Karnataka 333-336 3 Baba Bhoothnath Trade & Commerce Ltd. vs. ITO ITA No. 1494/Kol./2017 The Hon'ble ITAT, Kolkata 337 - 362 4 CIT vs. Roseberry Mercantile (P) Ltd. GA No.3296 of 2010 ITA No. 241 of 2010 The Hon'ble High Court of Kolkata 363 - 365 Jurisdiction u/s 263 cannot be assumed for making roving or fishing inquiry; S.No. TITLE CITATION AUTHORITY Following Page No. of LPB 1 Shringar Marketing (P) Ltd. vs. PCIT (2021) 190 ITD 16 ....