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TMI Blog2014 (11) TMI 133X X X X Extracts X X X X X X X X Extracts X X X X ..... led a fresh appeal memo and Form 36 dated 31.07.2014 signed by Shri Human Mall Saratoga - It is not shown as to how Shri Human Mall Saratoga was a Director as on 14.05.2013 when the appeal was filed by the assesse - These facts are being brought out because if Shri Arihant Jain is the Director then the appeal filed by the assessee on 14.05.2013 is within time – thus, the order passed by the CIT u/s 263 is upheld – Decided against assessee. - ITA. No. 1244/KOL./2013 - - - Dated:- 14-8-2014 - Shri Shamim Yahya and Shri George Mathan, JJ. For the Respondent : Shri Ajay Kumar Singh, CIT, D.R. ORDER Per George Mathan: This is an appeal f i led by the assessee against the order passed under sect ion 263 by the ld. Commissioner of Income Tax, Kolkata- I I, Kolkata in F. No. CIT- I I/DC(Hq) -2/Kol/263/2012-13/10339-41 dated 26/28.03.2013 for the assessment year 2008-09. 2. In the assessee s appeal , assessee has raised the following grounds: - (1) That on the facts and in the circumstances of the case the initiation of proceedings u/s 263 and the order passed there under by the ld. CIT is wrong, unjustified, bad in law and barred by limitation. The conditions pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... On 27.06.2014 again the assesses ld. Counsel sought an adjournment , on which date it was specifically noted that no further adjournment was to be given and the appeal posted to 02.07.2014. The order-sheet recording on 27.06.2014 is extracted below:- This appeal is a priori ty appeal because the order under challenge is the revision order passed by the CIT- I, Kolkata under section 263 of the Income Tax Act, 1961. The assesse has requested for stay of proceedings initiated by the AO in pursuance to direct ion given by the CIT under section 263 of the Act and for this, the stay petit ion was filed vide S.P. No. 73/Kool/2013, which was rejected vide order dated 26.03.2014 fixing the appeal for hearing on out-of - turn basis for 27.06.2014. The assesse has requested for adjournment of appeal as the Counsel is going out of station and in the interest of natural justice, this appeal is adjourned to 02.07.2014. But at the time of adjournment, it was made clear to the ld. Counsel for the assesse that no further adjournment will be given on 02.07.2014 as this is a priori ty appeal and the assesse even asked for staying the proceedings before the AO, as noted above. In terms of the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns, it was made clear that no further adjournment will be given. Now, the ld. CIT, DR, Shri Ajoy Singh has vehemently opposed granting of adjournment and stated that the as sessee now wants to avoid hearing on the one pretext or the other. The ld. CIT,DR stated that the issue is now covered by the decision of the Jurisdictional High Court in the case of K.P. Jain vs. - CIT in ITA No. 232 of 2006 dated 12.11.2010 and al so by the decision in the case of Zigma Commodities Private Ltd. Anr. vs. - ITO in W.P. No. 281 of 2014 dated 08.05.2014. He also stated that the issue is covered by the decision of the ITAT in the case of M/s. Jet Age Securities Pvt. Ltd. vs.- ACIT in ITA No. 637/Kol/2013 dated 18.07.14. In terms of the above, the ld. CIT,DR stated that in case the Bench is inclined to grant adjournment, very short adjournment be given. After hearing the ld. CIT,DR and in absence of the assessee, we adjourn the matter to 12.08.2014 and make i t clear in the Open Court that no further adjournment will be given to the asses see. In terms of the above, the matter is adjourned to 12.08.2014. Date is informed in the Open Court . Today i .e. on 12.08.2014, when the matter came ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... um in the assessment order, attempt has been made to subvert the possibility of another 148 reopening or 263. It was then the submission of the ld. CIT, D.R. that in the present case, the assesse-company came into existence during the financial year 2007-08 relevant to the assessment year 2008-09 with two subscribers. Then further shares have been allotted at a premium. It was the submission that for the assessment year 2008-09, the assesse had filed its return through On- line Electronic Filing on 18.09.2008. The said return was processed under sect ion 143(1) on 21.10.2009. Subsequently a letter was received from the assessee on 03.05.2010 intimating that no intimation has been received. On this letter, the Assessing Officer had issued notice under sect ion 148 on 05.05.2010, wherein i t has been recorded that the assessee has debited a sum of ₹ 46,840/- in its Prof i t Loss A/c. and this amount was not al lowable in view of the provisions of sect ion 35D of the Act . On 10.05.2010, the assessee requested for the communication of the reasons recorded for the purpose of reopening. Interestingly the said reasons have not been provided to the assesse. On 10.05.2010, the Asse ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and grounds of appeal was verified on 31.07.2014. It was the submission that along with Form 36 and grounds of appeal were verified on 31.07.2007. The assesse has filed the GRS-7 received for the Form 18 of the Companies Act for the change of address wherefrom it is noticed that the receipt was issued on 16.01.2014 and the address of the Registered Office of the assessee-company has been changed w.e. f . 10.01.2014. It was thus the submission that the appeal having been originally fi led on 14.05.2013. The Form 36 and the grounds of appeal filed itself were invalid. I t was the submission that nothing has been produced on record to show when the said Human Mall Saratoga became the Director of the assessee-company. It was the further submission that thus when the original assessment was done, no investigation had been done by the Assessing Officer in respect of the share applicants, much less an enquiry as is normal . I t was the submission that further as a consequence to the order passed under sect ion 263, the consequential assessment order had been passed on 30.03.2014, wherein notice under sect ion 131 had been issued to the shareholders and none had appeared nor responded and ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Many of these companies are under investigation by the Ministry of Corporate Affairs as well as CBI, Enforcement Directorate and SIT. In case of politically exposed person, the investigations are at a critical level and therefore, the names of the entry operators cannot be divulged at this juncture . It was the submission that the order passed under sect ion 263 may be upheld. 9. We have considered the submissions. De hors the fact that many of the companies are under investigation by various authorities. De hors the fact that there is substantial allegation against many of the share applicants and de hors the fact that al legations have been raised with regard to these companies, we are bound by the facts as are available on the records. The undisputed facts in the present case clearly are that the assessee is a Company which came into existence during the assessment year 2008-09. The assessee-company was incorporated on 07.05.2007. The assessee has issued shares at the premium. The assessee has filed its return of income for the relevant assessment year declaring an income of a loss of ₹ 1,840/- . The assessee has shown a prof i t as per 115 JB at ₹ ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . A perusal of the assessment records in the present case shows that in the course of original assessment the PAN detai ls of both the then Directors being Subodh Kumar Tody and Ganpat Jain was produced. However, no attention was drawn on the person who has not filed his return after the assessment year 2006-07, has found the source for starting a company during the assessment year 2008-09 and how a company which has got no business could sell its shares on private placement at a premium and that too to companies who do not respond to notice under sect ion 133(6). Obviously this needed detailed investigation. A perusal of the order sheet recording in the present case as made by the Assessing Officer shows no specific investigation having been done on the share application, nor of the receipt of the replies to the 133(6) not ices. . However, it is also pertinent to note that the replies to the 133(6) then issued are seen to have the rubber seal of various dates of filing and are conspicuous by the fact that they are all in a separate folder and not in the assessment folder. The assessment order passed under section 143(3) on 07.07.2010 does not speak of any investigation having been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ly on 31.07.2014, a letter has been filed intimating a change of address by one Mr. Jhumar Mall Saraogi . This letter was fi led on 04.08.2014. On 05.08.2014 ld. A.R. of the assesse has fi led a letter intimating that the Directors of the assesseeI company are Shri Jhumar Mal l Saraogi and Shri Anand Kumar Jain. There is no intimation as to when the original Directors of the assessee company Shri Ganpat Jain and Shri Subodh Tody were replaced or when Shri Arihant Jain became a Director. There is no information to show when Shri Arian Jain, Shri Subbed Toddy and Shri Ganapati Jain were replaced by the Directors Shri Human Mall Saratoga and Shri Annand Kumar Jain. Though the assesse has filed a fresh appeal memo and Form 36 dated 31.07.2014 signed by Shri Human Mall Saratoga. It is not shown as to how Shri Human Mall Saratoga was a Director as on 14.05.2013 when the appeal was filed by the assesse. These facts are being brought out because if Shri Arihant Jain is the Director then the appeal fi led by the assessee on 14.05.2013 is within time. However, if f Shri Arihant Jain was not the Director then the appeal primarily filed itself would be defective and would be liable for being d ..... X X X X Extracts X X X X X X X X Extracts X X X X
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