2022 (11) TMI 1432 - HC - Income Tax

Revision u/s 263 - Tribunal setting aside an order passed by the Commissioner u/s 263 which is a second proceedings initiated under the said provision - addition u/s 68 - HELD THAT - After the first order was passed u/s 263 of the Act, AO has conducted a de novo reassessment proceedings, issued summons to the directors and the shareholders as well as the assessee and examined the books of accounts, bank statement and the other documents produced by them to discharge the onus on them about the identity, creditworthiness and genuineness of the transaction and the assessing officer has recorded their statement during the reassessment proceedings where he has questioned an elucidated answer about all these factors. Tribunal has elaborately discussed the factual position and noted as to how the enquiry was conducted by the assessing officer after the first order was passed under Section 263. The learned Tribunal, after noting various decisions of the tribunal, also noted the decisions of this Court in the case of Dataware Pvt. Ltd. 2011 (9) TMI 175 - CALCUTTA HIGH COURT , Roseberry Mercantile (P) Ltd. 2011 (1) TMI 190 - CALCUTTA HIGH COURT , M/s. Nishan Indo Commerce Ltd. 2014 (3) TMI 895 - CALCUTTA HIGH COURT and Leonard Commercial (P) Ltd. 2011 (6) TMI 955 - CALCUTTA HIGH COURT In all those decisions, this Court considered the similar factual issue and decided in favour of the assessee - No substantial question of law.

Summary

Issues:
Appeal against order under Section 260A of the Income Tax Act - Quashing of order under Section 263 - Assessment year 2012-13 - Consideration of substantial question of law.

Analysis:
The High Court of Calcutta heard an appeal filed by the revenue under Section 260A of the Income Tax Act against the order passed by the Income Tax Appellate Tribunal related to the assessment year 2012-13. The substantial question of law raised was whether the Tribunal was justified in quashing the order under Section 263, which was deemed erroneous and prejudicial to the revenue's interest. The court considered arguments from both parties' counsels and examined the Tribunal's order in detail. The appeal arose from the Tribunal setting aside the Commissioner's order under Section 263, which was a second proceeding initiated under the provision. Following the first order under Section 263, the assessing officer conducted reassessment proceedings, summoned directors, shareholders, and the assessee, examined relevant documents, and recorded statements to verify the transaction's genuineness. The Tribunal reviewed the factual position, highlighted the assessing officer's inquiry post the initial Section 263 order, and cited various decisions, including those of the High Court, where similar issues were decided in favor of the assessee.

The High Court concluded that no substantial question of law arose for consideration in the appeal. The court noted the decisions referenced by the Tribunal and found in favor of the assessee. Consequently, the appeal was dismissed, and the connected application for stay was closed.