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TMI Blog2022 (11) TMI 1242X X X X Extracts X X X X X X X X Extracts X X X X ..... : Shri Biswanath Das, Addl. CIT ORDER PER MANISH BORAD, ACCOUNTANT MEMBER: This appeal has been preferred by the assessee against the order dated 27-02-2018 of the Ld. Commissioner of Income-tax, Appeals-3, Kolkata [hereinafter referred to as CIT(A) ], passed u/s. 250 of the Income-tax Act, 1961 hereinafter referred to as the Act for the AY 2012-13. 2. The assessee has raised the following grounds of appeal before this Tribunal: 1. That the order passed by the Ld. CIT(a) is bad in law as well as in facts of the case. 2. That the Ld. CIT(A) erred in law as well as in facts of the case by confirming the additions made by Ld. AO who treated the share application money including premium of Rs.5,91,00,000/- as bogus and added back the same to the total income of the appellant u/s. 68 of the Income Tax Act, 1961. 3. that the appellant craves leave to add/or amend any ground of this appeal. 3. Assessee has also raised the following additional ground of appeal: 1. For that the assessing officer issuing the notice u/s 143(2) of the IT Act 1961 did not have jurisdiction over the case of the assessee hence the notice is bad in law and t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... now in appeal before this Tribunal raising in the ground of appeal challenging the addition of Rs.5,91,00,000/- made u/s. 68 of the Act and also raising additional ground raising legal issue. 7. As regards the additional ground, it is submitted that as per the CBDT Instruction No. 1/2011(F. No. 187/12/2010-IT(A-1), dated 31.01.2011 in case of the corporate assessee in metro cities where the returned income is above Rs.30 lakh the jurisdiction over such assessee would lie with Dy. Commissioner of Income-tax/Assistant Commissioner of Income-tax and below such limit the jurisdiction will lie with Income Tax officer. It is further submitted that the jurisdiction in the case of the assessee was with the Dy. Commissioner of Incometax/ Assistant Commissioner of Income but the notice u/s. 143(2) of the Act was issued by ITO, Ward-9(4), Kolkata which had no jurisdiction. Since valid notice u/s. 143(2) has not been issued the assessment proceedings carried out thereafter are bad in law and to support this proposition reliance was placed on the decision of this Tribunal in the case of Bhagyalaxmi Conclave Pvt. Ltd. Ors. Vs. DCIT, ITA No. 2517 to 2520/Kol/2019 dated 03.02.2021 and Shivam ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al issue raised is not for the for the first time before this Tribunal. Even otherwise in view of the ratio laid down by the Hon ble Supreme Court in the case of NTPC vs.CIT 229 ITR 383 (SC) if legal issue goes to the root of the matter and where no new facts are required to be investigated or placed on record for adjudication then such legal ground can be raised at any stage and Hon ble court held that we do not see any reason to restrict the power of the Tribunal u/s. 254 of the Act to decide the grounds which arise from the order of the Commissioner of Income-Tax (Appeals) . Both the assessee as well as the department has the right to file an appeal/cross objection before the Tribunal. We fail to see why the Tribunal should be prevented from considering question of law arisen in assessment proceedings although not raised earlier. Therefore, the legal ground stands to be admitted and the same relates to invalid notice issued u/s. 143(2) of the Act. It is a settled position of law that for carrying out the assessment proceedings u/s. 143(3) of the Act, the statutory requirement of serving of valid notice u/s. 143(2) of the Act is must and in absence thereof the subsequent proceed ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat the assessing officer should issue notice to the assessee so as to ensure that the assessee has not understated income or has not computed excessive loss or has not under paid the tax in any manner. It was further held that when the assessing officer considers it necessary and expedient to ensure that tax is paid in accordance with law, he should call upon the assessee to produce evidence before him to ensure that the tax is paid in accordance with law. The section makes it clear that service of notice under section 143(2) of the Act within the time limit prescribed is mandatory and it is not a mere procedural requirement. At this juncture, it would be relevant to take note of the definition of assessing officer as defined in section 2(7A) of the Act. The said provision defines 'assessing officer' to mean the Assistant Commissioner or Deputy Commissioner or Assistant Director or Deputy Director or the Income-tax Officer, who is vested with the relevant jurisdiction by virtue of directions or orders issued under sub-section (1) or sub-section (2) of section 120 or any other provision of the Act, and the Additional Commissioner or Additional Director or Joint Commissioner ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat where an assessee has appeared in any proceedings or co-operated in any inquiry relating to an assessment or reassessment, it shall be deemed that any notice under any of the provision of the Act, which is required to be served upon him, has been duly served upon him in time in accordance with the provisions of the Act and such assessee shall be precluded from taking any objection in any proceeding or inquiry under the Act that the notice was not served upon him or not served upon him in time or served upon him in an improper manner. This amendment to the Act was introduced with effect from 1-4-2008 and the assessment year under consideration is AY 2007-08. In any event, the Tribunal examined as to whether at all the revenue can rely upon section 292BB of the Act and noted that the assessee has filed an objection vide letter dated 16-11-2009 objecting to the issuance of notice under section 142(1) of the Act without valid service of notice under section 143(2) of the Act. Taking note of the said letter the Tribunal, in our view, rightly held that the proviso to section 292BB would not stand attracted and the said section cannot be made applicable to the assessee's case. The ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... vide order dated 29.03.2015. 12. So far as the merits of the case are concerned though we have quashed the assessment proceedings, dealing with the issue on merits will be merely academic in nature but still we decide to do this academic exercise. We find that the assessee company has declared income of Rs.48,47,180/- in the e-return. The turnover of the company is approximately Rs. 35 Cr., shareholder fund as on 31.03.2012 is Rs.7.27 Cr. , earning per share is Rs.16.13. As per the details filed at page 52 of the paper book the earning per share of the company before issue of shares was Rs.97/- per share and in subsequent years also the earning per share is Rs. 39/- and Rs.43/- for FY 2012-13 and 2013-14. These details indicate that the financial of the assessee company are fair enough to justify the share premium charged on each share. Now coming to the details of investor company i.e. M/s. Kaushal Holdings Private Limited, which has invested in the equity share of the assessee company towards share application and share premium of Rs. 5,91,00,000/- which has been treated as unexplained cash credit u/s. 68 of the Act by both the lower authorities. We observe that M/s. KHPL is ..... X X X X Extracts X X X X X X X X Extracts X X X X
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