2020 (1) TMI 1565 - AT - Income Tax

Rectification of mistake - Revision u/s 263 - revision proceedings on issue of inadequate enquiries w.r.t share capital raised by the assessee company - Pursuant to search proceedings and centralization of records the assessee company was subjected to detailed scrutiny for the relevant assessment year by jurisdictional Assessing Officer (Central Circle) who after making detailed enquiries and verification passed order u/s 153A and this relevant fact was not considered by the Hon ble Bench hence this Misc. Application filed - HELD THAT - Tribunal has restored an ex-parte order passed by the ld. Commissioner of Income Tax Kolkata-III Kolkata u/s 263 of the Income Tax Act 1961 dated 28.03.2013 on the grounds of violation of principles of natural justice to the file of the ld. CIT Kolkata-III for fresh adjudication in accordance with law. The pleading of the ld. Counsel for the assessee that such a restoration of the proceedings to the file of the Commissioner of Income Tax Kolkata-III Kolkata would not be proper and legal for the reason that the proceedings had got barred by limitation was rejected by the Tribunal. In this Miscellaneous Application the assessee submits that adequate enquiries with regard to rising of share capital were conducted subsequently by the assessing authorities in a post search assessment proceedings which culminated into assessment order u/s 153A r.w.s. 143(3) of the Act for the very same assessment year was passed on 23.03.2015 and hence the order passed u/s 263 of the Act by the Commissioner of Income Tax Kolkata-III Kolkata is bad in law has to be rejected for the reason that there is no mistake apparent on record in the impugned order of the Tribunal dated 01.10.2019. Whether adequate enquiries were conducted in the subsequent proceedings u/s 153A r.w.s. 143(3) of the Act or not was not a subject matter before us. The Commissioner of Income Tax Kolkata-III Kolkata may consider these arguments before passing the order u/s 263 dated 28.03.2013. Hence this Miscellaneous Application is rejected as devoid of merit.

Summary

Issues:
1. Rectification of mistake apparent on record in the order of the Tribunal dated 01.10.2019 in ITA No. 1518/Kol/2015 for AY 2009-10.
2. Restoration of an ex-parte order passed by the ld. Commissioner of Income Tax, Kolkata-III, Kolkata u/s 263 of the Income Tax Act, 1961.
3. Adequacy of enquiries conducted with regard to rising of share capital in post search assessment proceedings culminating in an assessment order u/s 153A r.w.s. 143(3) of the Act for the same assessment year.

Analysis:

1. The Appellate Tribunal received a Miscellaneous Application from the assessee, claiming a mistake apparent on record in the Tribunal's order dated 01.10.2019 for AY 2009-10. The application highlighted that subsequent to a notice under section 263, a search action was conducted against the assessee, leading to centralization of assessment records and the completion of the order u/s 153A/143(3) for the relevant assessment year. The Tribunal acknowledged the restoration of an ex-parte order by the Commissioner of Income Tax, Kolkata-III, Kolkata, under section 263, citing a violation of natural justice. The Tribunal decided to send the matter back to the Commissioner for fresh adjudication, rejecting the argument that the proceedings were time-barred.

2. The assessee contended in the Miscellaneous Application that sufficient enquiries regarding the share capital were carried out in subsequent post search assessment proceedings, resulting in the assessment order u/s 153A r.w.s. 143(3) of the Act on 23.03.2015. The assessee argued that the order passed by the Commissioner of Income Tax, Kolkata-III, Kolkata under section 263 was legally flawed as there was no apparent mistake on record in the Tribunal's order dated 01.10.2019. The Tribunal clarified that the adequacy of enquiries conducted in the post search proceedings was not under its consideration, advising the Commissioner to review these arguments before issuing the order u/s 263 dated 28.03.2013. Consequently, the Miscellaneous Application was dismissed for lacking merit.

3. Ultimately, the Tribunal dismissed the Miscellaneous Application on 22nd January 2020, emphasizing that the Commissioner of Income Tax, Kolkata-III, Kolkata should consider the arguments regarding the adequacy of enquiries in the subsequent proceedings before finalizing the order under section 263.