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TMI Blog2023 (3) TMI 406X X X X Extracts X X X X X X X X Extracts X X X X ..... d that in the case of CIT vs. Anil Kumar [ 2010 (2) TMI 75 - DELHI HIGH COURT] has held that where it was discernible from record that the A.O has applied his mind to the issue in question, the ld. CIT cannot invoke section 263 of the Act merely because he has different opinion. In the present case we observe that in the assessment proceedings u/s 143(3) of the Act were carried out in the case of the assessee for AY 2012-13 and ld. AO vide order held the share capital and share premium of Rs. 71.9 Cr as unexplained cash credit. The return of income was originally filed on 19.11.2011 at a loss of Rs. 74,252/-. In the second round of assessment proceedings ld. AO issued a notice u/s 142(1) of the Act dated 11.11.2016 and called for complete details about the share capital and share premium received by the assessee company as well as complete details of the investor companies. Complete details have been filed by the assessee. The finding of ld. AO in itself makes it amply clear that complete details were filed and the directors of the investor companies personally appeared before ld. AO on being called for by issuing summons u/s 131 - Their statements were recorded u/s 131 of t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... l and share premium and which thus, do not call for any addition u/s 68. Pr. CIT grossly erred in assuming the jurisdiction u/s 263 of the Act and also erred in holding the assessment order dated 30.12.2016 as erroneous and prejudicial to the interests of the Revenue - Decided in favour of assessee. - I.T.A. No.: 495/KOL/2022 - - - Dated:- 6-3-2023 - Sri Rajpal Yadav, Vice President And Dr. Manish Borad, Accountant Member For the Assessee : Sh. Siddharth Jhajharia, FCA For the Revenue : Sh. Sudipta Guha, CIT, (D/R) ORDER PER MANISH BORAD, ACCOUNTANT MEMBER: This appeal filed by the assessee pertaining to the Assessment Year (in short AY ) 2012-2013 is directed against the order passed u/s 263 of the Income Tax Act, 1961 (in short the Act ) by ld. Pr. Commissioner of Income-tax-4, Kolkata [in short ld. PCIT ] dated 12.03.2019 which is arising out of the assessment order framed u/s 143(3) of the Act dated 20.03.2015. 2. Registry has informed that the appeal filed by the assessee is time barred by 1209 days. Condonation application has been filed by the assessee dated 31.08.2022 stating as follows: We are in receipt of order u/s 263 dt. 12. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nces the impugned order of Ld. PCIT is liable to be quashed / cancelled / set aside and in view of the facts and in the circumstances it may be held accordingly. 2. Without prejudice to Ground No. 1 above, the impugned order having been passed without proper service of notice, the impugned order is an ex-parte order in nature, hence the impugned order is liable to be quashed/ cancelled/ set aside and in view of the facts and in the circumstances it may be held accordingly. 3. Without prejudice to Grounds No. 1 2 above, the Ld. PCIT in the impugned proceedings and the consequent order u/s 263 has not conducted any enquiry by himself and without even bringing on record as to the allegation towards lack of enquiry by the AO has not satisfied the requirement of proceedings u/s 263 or consequent order u/s 263 and as such the impugned proceedings u/s 263 and the consequent order u/s 263 is bad in law and in view of the facts and in the circumstances it may be held accordingly. 4. Without prejudice to Grounds No. 1, 2 3 above, the Ld. AO in the impugned proceedings u/s 263/ 143(3) (dt. 30.12.2016) had conducted the necessary enquiry so directed by the Ld. PCIT in orde ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s genuineness. The assessment proceedings may be initiated at the earliest and to be completed without waiting time barring date. The A.O must provide Sufficient opportunity of being heard to the assessee in order to meet natural justice, equity and fairness. 6. In compliance to the directions given u/s 263 of the Act ld. AO carried out the assessment proceedings and after examining the complete details of the share capital and share premium totalling to Rs. 79.14 Cr was satisfied that the assessee has duly explained the source of share capital and share premium and there is no scope of invoking the provisions of Section 68 of the Act accordingly vide order dated 30.12.2016 assessed the income at Rs. 1,17,342/-. 7. Again in the second round of revisionary proceedings u/s 263 of the Act were commenced by ld. Pr. CIT calling for the assessment records forming part of the assessment order dated 30.12.2016 and issued show cause notice dated 16.01.2019 raising the following issues: (i) The A.O passed the order without carrying out detailed investigation/ verification/ independent enquiry regarding identity, creditworthiness of the shareholders also the genuineness of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Section 263 of the Income Tax Act, 1961 7.1. The afore stated decisions postulate that when the officer is expected to make an inquiry of a particular item of income and if he does not make an inquiry as expected, that would be a ground for the Commissioner to interfere with the order passed by the Officer since such an order passed by the Officer is erroneous and prejudicial to the interests of the Revenue (K.A. Ramaswamy Chettiar V. CIT, (1996) 220 ITR 657). 7.2. In my considered opinion, this is a case of lack of enquiry on the part of the AO. The decision on this issue could be taken only after examining and verifying the facts / submission of the AR on this score. Not collecting the full facts and not taking enquiry to logical end which could enable AO to take decision based on the totality of facts makes this order erroneous in so far as prejudicial to the interest of revenue After having considered the position of law and facts and circumstances of the instant case, I am of the considered opinion that the assessment order passed by the A.O is erroneous in so far as it is prejudicial to the interest of revenue in accordance with the Explanation 2(c) below section 26 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 19. Letter of Pioneer Saree Merchants Pvt Ltd addressed to the. 20. Letter dated 3.11.2014 of Mangal Kalash Marketing Pvt Ltd. 21. Letter dated 31.10.2014 of Nazi Dealers Pvt Ltd. 22. Letter of Omsai Vinimay Pvt Ltd. 23. Letter of Vishwakanna Construction Advisory Pvt Ltd. 24. Letter dated 28.10.2014 of Virat Creation Traders Pvt Ltd. 25. Letter of Ujjwal Cloth Marketing Pvt Ltd. 26. Letter dated 26.9.2014 of Everlasting Commercial Pvt Ltd. 27. Letter dated 31.10.2014 of Hitech Saree Trading Pvt Ltd. 28. Letter dated 12.11.2014 of Leoline Dealtrade Pvt Ltd. 29. Letter dated 25.9.2014 of Trinket Suppliers Pvt Ltd. 30. Letter dated 24.9.2014 of Rcalsunrisc Logitrans India Pvt Ltd. 31. Letter dated 24.9.2014 of Waltaz Exports Pvt Ltd. 32. Letter dated 24.9.2014 of Wellington Distributors Pvt Ltd. 33. Letter dated 27.10.2014 of Xavier Textrade Pvt Ltd. 34. Letter dated 15.10.2014 of Yathartha Consultancy Pvt Ltd. 35. Letter dated 18.11.2014 of Amazing Saree Merchants Pvt Ltd. 36. Letter dated 14.10.2014 of Advance Suppliers Pvt Ltd. 37. Letter dated 25.9.2014 of Arham Packaging Goods Private Li ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es. Through this appeal the assessee has raised various grounds of appeal but the sole grievance is that ld. Pr. CIT was wholly unjustified in setting aside the order of ld. AO u/s 143(3) r.w.s. 263 of the Act dated 30.12.2016 holding the said order to be erroneous and prejudicial to the interests of the Revenue. 13.1. With the assistance of ld. representative, we have gone through the record. Section 263 has a direct bearing on the controversy, therefore, it is pertinent to take note of this section. It reads as under: 263(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interest of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation- For the removal of doubts, it is hereby declared that, for the purposes of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion, the learned Commissioner was not required to show any reason. It is a part of his administrative control to call for the records and examine them. The second feature would come when he will judge an order passed by an Assessing Officer on culmination of any proceedings or during the pendency of those proceedings. On an analysis of the record and of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Commissioner would issue a show cause notice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... conjunction with the expression erroneous order passed by the AO. Every loss of revenue as a consequence of an order of the AO cannot be treated as prejudicial to the interest of the Revenue. For example, when the ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the CIT does not agree, it cannot be treated as an erroneous order prejudicial to the interest of the Revenue, unless the view taken by the ITO is unsustainable in law. 13.5. Hon'ble Madhya Pradesh High court in the case of CIT vs. Associated Food Products (P) Ltd as reported in 280 ITR 0377 has held that: 10. In view of the aforesaid pronouncement of law and taking into consideration the language employed under s. 263 of the Act, it is clear as crystal that before exercise of powers two requisites are imperative to be present. In the absence of such foundation exercise of a suomoto power is impermissible. It should not be presumed that initiation of power under suomoto revision is merely an administrative act. It is an act of a quasi-judicial authority and based on formation of an opinion with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Court of Bombay in the case of CIT vs. Nirav Modi, [2016] 71 taxmann.com 272 (Bombay). 13.7. This view is further supported by the decision of the Hon'ble Gujarat High Court in the case of Shri Prakash Bhagchand Khatri in Tax Appeal No. 177 with Tax Appeal No.178 of 2016, wherein the Hon'ble Gujarat High Court was seized with the following substantial question of law: Whether the Tribunal is right in law and on facts in upholding the order passed by the CIT under section 263 of the Act on merits and still storing the issue of allowability of deduction under section 54 of the Act to the file of Assessing Officer even though the working of allowability of deduction under section 54F is available in the order under section 263 which is not disputed by the assessee before ITAT. 13.8. We find that the Hon'ble Delhi High Court in the case of CIT vs. Anil Kumar reported in 335 ITR 83 has held that where it was discernible from record that the A.O has applied his mind to the issue in question, the ld. CIT cannot invoke section 263 of the Act merely because he has different opinion. Relevant observation of the High Court reads as under: 63. We find the Hon ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... assessee explained that the capital investment made by the partners, which had been called into question by the CIT was duly reflected in the respective assessments of the partners who were I.T. assessees and the unsecured loan taken from M/s Stutee Chit Finance (P) Ltd. was duly reflected in the assessment order of the said chit fund which was also an assessee. 64. Since in the instant case the A.O. after considering the various submissions made by the assessee from time to time and has taken a possible view, therefore, merely because the DIT does not agree with the opinion of the A.O., he cannot invoke the provisions of section 263 to substitute his own opinion. It has further been held in several decisions that when the A.O. has made enquiry to his satisfaction and it is not a case of no enquiry and the DIT/CIT wants that the case could have been investigated/ probed in a particular manner, he cannot assume jurisdiction u/s 263 of the Act. In view of the above discussion, we hold that the assumption of jurisdiction by the DIT u/s 263 of the Act is not in accordance with law. We, therefore, quash the same and grounds raised by the assessee are allowed. 13.9. The ITA ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... that regard. 13.10. Apart from above stated broader principles, one more principle needs to be added in view of the judgment of Hon ble Delhi High Court in the case of ITO vs. D.G. Housing Projects Ltd. [2012] 343 ITR 329 (Delhi) that the ld. CIT has to examine and verify the issue himself and give a finding on merits and form an opinion on merits that the order passed by the AO is erroneous and prejudicial to the interest of the Revenue. Relevant extract is reproduced below: In the present case, the findings recorded by the Tribunal are correct as the CIT has not gone into and has not given any reason for observing that the order passed by the Assessing Officer was erroneous. The finding recorded by the CIT is that order passed by the Assessing Officer may be erroneous . The CIT had doubts about the valuation and sale consideration received but the CIT should have examined the said aspect himself and given a finding that the order passed by the Assessing Officer was erroneous. He came to the conclusion and finding that the Assessing Officer had examined the said aspect and accepted the respondent s computation figures but he had reservations. The CIT in the order has r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... emium received by the assessee company as well as complete details of the investor companies. Complete details have been filed by the assessee. Relevant extract of the finding of ld. AO in the assessment order dated 30.12.2016 reads as follows: The assessee company filed its original return on 19.11.2011 at total loss of Rs. 74,252/-. The return was duly processed u/s. 143(1). The authorized capital of the assessee company was Rs, 7,00,00,000/- and paid up share capital of the assessee company as on 31.03.2012 was Rs. 1,09,90,900/- and the assessee company also received share premium amounting to Rs. 78,31,16,100/-. The assessee company has shown receipt of fresh subscription to its share capital including share premium for Rs. 79,14,00,000/-. The case was selected for scrutiny through CASS system. The assessment u/s 143(3) of the IT Act was made on 20.03.2015 and the assessed income raised to Rs. 79,14,03,750/- with the addition of Rs. 79,14,00,000 /- on account of unexplained cash credit and Rs. 78,000/- due to disallowances of 'preliminary expenses written-off. Subsequently Ld. Principal Commissioner of Income Tax - 4, Kolkata passed order u/s. 263 on 17/10/2016 set asi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... /s 14A as discussed in para A : Rs. 1,91,594/- Assessed income : Rs. 1,17,342/- Assessed u/s. 143(3)/263 as above. Issue copy of the order, computation sheet and demand notice to the assessee. 15. The finding of ld. AO in itself makes it amply clear that complete details were filed and the directors of the investor companies personally appeared before ld. AO on being called for by issuing summons u/s 131 of the Act. Their statements were recorded u/s 131 of the Act on oath and they also referred to various books of accounts and other relevant documents. Ld. AO was satisfied with the source of funds, identity and creditworthiness of the share applicants and genuineness of the transactions. 16. The above finding clearly indicates that ld. AO conducted a complete enquiry and also examined all the relevant details as were directed by ld. Pr. CIT in the directions given in the order u/s 263 of the Act dated 17.10.2016. We also note that this is the second round of assessment proceedings. Even in the first round of the proceedings also all the share applicants replied directly to ld. AO enclosing the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... well settled that if the view taken by ld. AO is permissible under the law then it may or may not be prejudicial to the interests of the Revenue. 18. We find that recently this Tribunal in the case of M/s. Bhagwati Vintrade Private Limited (supra) has adjudicated the similar issues of carrying out of the revisionary proceedings and the directions were also similar for examination of share capital and share premium and this Tribunal on observing that ld. AO has carried out a detailed enquiry on this issue and has made proper application of mind, quashed the order u/s 263 of the Act observing as follows: 3. After hearing rival contentions, we find that the facts and circumstances of the cases of both the Assessment Years 2013-14 and 2012-13, the basis of the assessment order and the order passed u/s 263 of the Act are identical. The arguments advanced being the same, we follow the order of the ITAT in the assessee's own case for the Assessment Year 2013-14, dt. 17/02/2021, wherein, the ITAT had held as follows:- 10. We have heard rival contentions. On careful consideration of the facts and circumstances of the case, perusal of the papers on record, orders of the au ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e justification of fixing of share premium or that has not examined or enquired into the authenticity of the transaction, and that he has not enquired the possibility of the transaction being sham and the activity being a case of laundering of unaccounted income etc., is against facts. In fact, the Assessing Officer has in detail described the enquiries made by him and his findings on such enquiries. The Id. Pr. CIT further comments as follows:- The interests of the revenue are not to be equate to rupees or paisa merely. Then, he goes on to state that, the Commissioner may think that the order is prejudicial to the revenue administration. These observation are not in accordance with law as can be seen from various judgments which are dismissed by us. 12. This Bench of the Tribunal under identical circumstances, in the case of Amritrashi Infra Pvt. Ltd. vs. PCIT in ITA No. 838/Kol/2019, dt. 12/08/2020, held as follows:- 46. In the light of the afore-cited judicial precedents, let us examine the case in hand and find out whether pursuant to the specific direction of First Ld. Pr. CIT, the second AO has discharged his role as an investigator in respect of share ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s unexplained cash credit u/s. 68 of the Act. Therefore, according to the First Ld. Pr. CIT, the first original assessment order framed u/s. 143(3) of the Act dated 26-03- 2015 was against the principle of natural justice and, therefore, he found it fit to order denovo assessment and gave specific direction in respect of share capital premium collected by assessee. 48. Thereafter, the Id. Pr. CIT was pleased to direct assessment order passed on 26.03.2015 is set aside de novo with the direction to the AO to carry out proper examination of books of account and bank statement of the assessee as well as the investor. The AO is also directed to examine the source of share application, entity of investor and its genuineness , (emphasis given by us). He also directed that the assessment proceedings to be initiated at the earliest and to be completed without waiting for time bar limit. With the aforesaid specific direction, the First Ld. Pr. CIT has set aside the first original assessment order dated 26-03-2015. 49. So we note that the second AO was specifically directed by the First Ld. Pr. CIT to carry out the following actions in addition to de-novo assessment which mea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... AACCL2111J yes 11 M/s. Subhsreelmpex Pvt. Ltd. U51909WB2011 PTCI 71513 AARCS1845D yes 12 M/s. Maharaja Merchants Pvt. Ltd. U51109 WB2005PTCI02343 AAECM224E yes 13 M/s. Sristi Sales Pvt. Ltd. U51109WB2005PTC102121 AAICS8900L yes v) The AO to complete the assessment at the earliest without waiting for the time barring date. 50. In the second round before the AO for de novo re-assessment, the second AO as per the specific direction of the First Ld. Pr. CIT (supra), conducted the reassessment proceeding. As per the specific direction of Ld. First Pr. CIT, the Second AO firstly summoned the director of the assessee company Shri NavinTahin before him, who duly appeared and produced the books of account on 01.12.2016 and furnished the relevant details viz., (i) copy of ITR, (ii) audited accounts, (Ui) details of directors, (iv) the details of the share-appl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d AO have been regularly performed. Coming to the contention of Ld. CIT, DR, that order sheet maintained by the Second AO does not reveal that AO had issued notice u/s. 133(6) of the Act to the share subscribers, we note that the AO in his reassessment/second assessment order has clearly asserted that he had issued notice u/s. 133(6) of the Act to all the share applicants as directed by the First Ld. Pr. CIT and we note from the perusal of some letters written by the share applicants clearly referring to the AO's sec. 133(6) notice (refer inter-alia page 32 of PB-I). So, the clear assertion of the Second AO in his order that pursuant to his issue of notice u/s. 133(6), he received the documents called for cannot be disbelieved merely because he did not mention this event in the order sheet. Moreover, the assessee or the share applicants does not have any control over the order sheet maintained by the AO and the failure of AO to mention this action cannot be a reason to disbelieve the AO's assertion that he issued notice u/s. 133(6) of the Act. Moreover, we have to examine the re-assessment/second assessment order of AO and not the order-sheet maintained by him which has not ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .222,397,317(page 128 PB-2) Rs.45,00,000/- M/s. Shivarshi Construction Pvt. Ltd. Page 146Paper Book- 2 Rs.53,89,95,046 (page 153 PB-2) Rs.4,66,00,000/- M/s. Shivashiv Pvt. Ltd. Page 170Paper Book- 2 Rs.14,29,56,146 (page 178 PB-2) Rs.6,55,00,000/- M/s. Flowtop Agency Pvt. Ltd. Page 193Paper Book- 2 Rs.15,38,94,946 (page 200 PB-2) Rs.4,49,00,000/- M/s. Sukh Sagar Residency Pvt. Ltd. Page 212 Paper Book-2 Rs.56,18,93,960 (page 220 PB-2) Rs.2,31,00,000/- M/s. Kamaldhan Developers Pvt. Ltd. Page246-247Paper Book-2 Rs.56,18,94,080 (page 254 PB-2) Rs.12,54,00,000/- M/s. Labhdhan Impex Pvt. Ltd. Page 270 PaperBook- 2 Rs.56,18,94,080 (page 277 PB-2) Rs. 3,80,00,000/- M/s. Subhsreel m ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... is a plausible view and in consonance with judicial precedents (supra) which we would like to discuss/ examine each share subscribers totaling thirteen (13) infra:- (i) On perusal of the paper book-2, it reveals that the documents are placed at page 12 to 37 of share applicant M/s. K.R. Overseas Pvt. Limited which is a Private Limited Company, and which has Permanent Account No. AACCK0101B and CIN U51109WB1994PTC061965 and its Net-worth as on 31.03.2012 (in total)- share capital reserve is to the tune of Rs.66,77,47,921/- (PB page 22) and the investment made in the assessee-company including the share premium comes to Rs.1,30,00,000/-. The payment has been made through banking channel and deposit amount of Rs.1,05,00,000/- took place as on 01.03.2012 by NEFT and Rs.25,00,000/- as on 06.03.2012. The Board Resolution for investment of the Company is filed and the share application form, ITR acknowledgment, Bank statement, explanation of source of funds as well as financial statements have been filed by the assessee at P. B page 3-37and thus we note that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing PAN as well as income-tax ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n 03.03.2012 Rs. 40 lakhs through NEFT; and by cheque on Rs. 3,75,00,000/-on 27.3.2012 . There is board resolution for investment in assessee's company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB-page 79 to 111 in the PB-II. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements. Thus we note that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing PAN as well as income- tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Further, it is noted that the share applicants had furnished the source of investment made in the assessee- company after getting the notice under section 133(6) of the Act. (iv) We note from a perusal of the paper book pages-2,112 to 137, the details of share applicant M/s. Subhiksha Pvt. Ltd. It is a Private Limited Company which has a PAN AAPCS ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... entity of the share applicants by adducing PAN as well as income-tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. (vi) We note from a perusal of the paper book pages-2, 160 to 184 the details of share applicant M/s. Shivashiv Dealcom Pvt. Ltd. It is a Private Limited Company which has a PAN AARCS0094C and its CIN number is U74999WB2012PTC 173749 and the net worth of this company as on 31.3.2012 Rs.l4,29,56,146/-(PB-page 178) and investment mode in the assessee company is to the tune of Rs.6,55,00,000/- and this share applicant has made the transaction through banking channel on 29.03.2012 Rs.6,55,00,000/- through Cheque. There is board resolution for investment in assessee's company and Share Application Form Bank statement, ITR acknowledgement, explanation of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rusal of the paper book pages-2,207 to 226 the details of share applicant M/s. SukhSagar Residency Pvt. Ltd. It is a Private Limited Company which has a PAN AARCS1553N and its CIN number is U45400WB2011PTC170958and the net worth of this company as on 31.3.2012 Rs.56,18,93,960/-(P.B-2 pages-220) and investment made in the assessee company is to the tune of Rs.2,31,00,000/- and this share applicant has made the transaction through banking channel on 31.3.2012 Rs. 2,31,00,000/- through NEFT. There is board resolution for investment in assessee's company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB-page 208-226 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements and thus we note that the assessee had duly discharged its onus to prove the identity of the share applicants by adducing PAN as well as income-tax returns. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the tr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... banking channel on 31.03.2012 a sum of Rs.3,80,00,000/- through NEFT. There is board resolution for investment in assessee's company and Share Application Form, Bank statement, ITR acknowledgement, explanation of source of fund as well as financial statement available in the PB-page 163-283 in the PB. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. This company has furnished the details of source of Funds and has duly filed financial statements. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Further, it is noted that the share applicants had furnished the source of investment made in the assessee-company after getting the notice under section 133(6) of the Act. (xi) We note from a perusal of the paper book-2 pages 284 to 303 the details of share applicant M/s. Subhsree Impex Pvt. Ltd. It is a Private Limited Company which has a PAN AARCS1845D and its CIN number is U51909WB2011PTC171513 and th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ) We note from a perusal of the paper book-2 pages 327 to 352 the details of share applicant M/s. Sristi Sales Pvt. Ltd. It is a Private Limited Company which has a PAN AAICS8900L and its CIN number is U51109WB2005PTC 102121 and the net worth of this company as on 31.3.2012 Rs.1,12,25,612/- and investment made in the assessee company is to the tune of Rs.50 lakhs and this share applicant has made the transaction through banking channel on 28.02.2012 a sum of Rs. 50 lakhs through Cheque. There is Share Application, Bank statement, ITR acknowledgement, financial statement available in the PB-2, page 328 to 352. This share applicant regularly filed Income Tax Return (ITR) and it has filed its Bank statement. The financial statement shows that the share applicant had enough funds to invest in the assessee-company and the transaction has happened through banking channel. Thus the assessee has discharged the onus to prove the identity, creditworthiness and genuineness of the transactions. Thus from the discussion above, it is noted except the last two investors the other eleven (11) share applicants out of thirteen (13) share-holders had furnished the source of investment made in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... share capital and premium collected by the assessee as erroneous as well as prejudicial to the interest of the revenue. In the light of the aforesaid discussions and on perusal of the documents, we are of the view that AO's view to accept the identity, creditworthiness and genuineness of the share capital and premium collected from the share subscribers was a plausible view and at any rate can be termed as an unsustainable view on law or facts 55. Further, we also take note that while he proposed to interfere u/s. 263 of the Act, he had opined that there was no detailed or independent enquiry but finally concluded that there was lack of enquiry. So, the Ld. Second Pr. CIT accepts that there was enquiry made by the second AO, however, he concludes that there was lack of enquiry. So when there was an enquiry conducted by AO then the AO has discharged the duty of an investigator. And we note that all the documents referred to above are available is the assessment folder before the Second Ld. Pr. CIT and he could have easily examined the veracity of these documents from the department's data base by click of a mouse and could have recorded his finding of fact if he found a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... meant by total facts or in the alternative when the assessee has discharged its onus, as required by the law in force in this AY 2012-13, then the Ld. Pr. CIT ought to have called for which ever additional documents/materials or issued summons or issued notices and collected those facts which according to Second Ld. Pr. CIT, the AO omitted to collect and then demonstrated that those actions/documents which he collected in that process gave result to a different finding of fact which will turn upside down the claim of the assessee and thus able to show that the actions/omission of AO in conducting the investigation was erroneous, which unfortunately is not the case before us. And equally bad is the bald allegation/fault that second AO has not collected total facts cannot be accepted being vague and based on conjectures and surmises and so meritless. Since the assessee company has discharged its onus as discussed supra, and still if the Second Pr. CIT had to find the order of Second AO erroneous for lack of enquiry or for not collecting the entire facts, then the Second Pr. CIT ought to have called for the additional facts which he thinks that the Second AO has not collected from th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ssment proceedings meaning no finality to assessment proceedings and that is exactly why the Parliament in its wisdom has brought in safe-guards, restrictions conditions precedent to be satisfied strictly before assumption of revisional jurisdiction. Be that as it may be, as discussed above, we find that the Second Ld. Pr. CIT without satisfying the condition precedent u/s 263 of the Act has invoked the revisional jurisdiction (second time), so all his actions are ab initio void. 13. In the case on hand, the Assessing Officer has at page 5, considered the specific directions given by the Id. CIT[A) in his order u/s 263 of the Act dt. 23/08/2016 and based on the same had issued questionnaires to the assessee company which is in Annexure-A of the assessment order. Summons were issued u/s 131 of the Act to the directors of the share holding company M/s. Lakshmi Dealmark Private Limited. The actions taken in compliance with the directions given by the Id. Pr. CIT are given at page 5 to 7 of the assessment order. A perusal of the same demonstrates that the directions were carried out. This is not a case of non applicability of mind or non-verification. The Assessing Officer has ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ucceed as the decision of this Tribunal stands confirmed by the Hon'ble Jurisdictional High Court observing as follows: The Court This appeal filed by the revenue is directed against the order dated 17.02.2021 passed by the Income Tax Appellate Tribunal, A Bench, Kolkata (Tribunal) in ITA No. 303/Kol/2020 for the assessment year 2013-2014. The revenue has raised the following substantial questions of law for consideration : i) Whether the Learned Tribunal has committed substantial error in law by not upholding the order passed under section 263 of the Income Tax Act, 1961 by Principal Commissioner of Income Tax as because the assessment order passed by the assessing officer is erroneous and so far as prejudicial to the interest of the Revenue? ii) Whether the Learned Tribunal has committed substantial error in law by holding that the revisionaiy power of PCIT under Section 263 of the Income Tax Act, 1961 is bad in law and quashing the same, whereas the Honhle Apex court in the matte of Rampyari Devi Sarogi Vs. CIT (1968) 67 ITR 84 (SC) AND Tara Devi Agarwal - Vs. CIT (1973) 88 ITR 323 (SC) held that in absence of proper enquiries the assessment order would ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rder u/s 263 of the Act has been quashed by this Tribunal observing as follows: 7. We have heard rival submissions, carefully perused the material available on record, the impugned appellate order, the assessment order passed in the set aside proceeding and the decision cited before us in the case of Omkar Infracon (P) Ltd. (supra) and the decision of jurisdictional High Court in the case of PCIT Vs Bhagwati vintrade Pvt Ltd(supra). We observe on the basis of the records before us that Ld. Pr. CIT has revised the assessment on the ground lack of enquiry on the part of the AO into the issue of investment of share capital and share premium. However, we note that in the set aside assessment proceeding in the first inning the AO examined the issue in detail after calling information from the assessee as well as investors u/s 133(6) of the Act and based on that detailed enquiry on the issue accepted the investments made in the assessee company. The relevant findings of the AO in the assessment order as framed u/s 143(3) r.w.s. 263 of the Act are reproduced as under: And considering the facts and circumstances of case as discussed above and as per submission of assessee, the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... income of Rs. NIL. 8. We note from the above findings of the AO that while giving effect to the directions of the Ld. Pr. CIT, AO issued notice u/s. 142(1) of the Act to the assessee which was duly complied with by filing necessary documents and informations. We note that the AO also issued notices u/s. 133(6) on 12.07.2016 to the parties from whom the funds were raised by the assessee and verified the source of investments, identity and genuineness. The said investor companies duly responded to the said notice and thereafter the AO recorded his satisfaction accepting the said investments in the hands of the assessee. Considering the above facts, we are of the view that the jurisdiction u/s. 263 of the Act by Ld. Pr. CIT has not been validly exercised. The case of the assessee finds support from the decision of the coordinate bench in Omkar Infracon (P) Ltd. (supra) wherein under similar facts, wherein the show cause notice is verbatim same, the coordinate bench has held the second revision as invalid by upholding the assessment order passed in the first inning. Recently the Hon ble Calcutta High Court has held in the case of PCIT Vs Bhagwati Vintrade Pvt. Ltd ITAT/184/2022, ..... X X X X Extracts X X X X X X X X Extracts X X X X
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