9911796707
Advanced Search 
TMI Blog2023 (4) TMI 482X X X X Extracts X X X X X X X X Extracts X X X X ..... by Ld. PCIT-1, New Delhi u/s. 263 of the Income Tax Act 1961 (for short the Act). The learned counsel submitted some factual aspects that the assessee for A.Y. 2010-11 filed its return of income u/s. 139 of the Act on 24.09.2010 which was processed u/s. 143(1) on 11.02.2011. The learned counsel further submitted that subsequently the AO initiated reassessment proceedings by issuing notice u/s. 148 of the Act on 24.03.2017 and passed reassessment order u/s. 143(3) r.w.s 147 of the Act on 13.12.2017. Drawing our attention towards copy of the reasons recorded for reopening of reassessment proceedings available at pages 1 to 5 of assessee paper book. The learned counsel submitted that the reopening was based on information received from DCIT, CC-2(2), Mumbai wherein the AO challenged genuineness of share capital received by the assessee company from two entities viz. Advanced Technology Ltd. and Yantra Natural Resources Ltd. The assessee company during the reassessment proceedings to avoid litigation and to buy piece of mind surrendered the stated transaction and paid due taxes etc thereon. The learned counsel vehemently pointed out that reassessment proceedings were initiated pertaini ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of reassessment proceedings, the period of limitation provided under sub section (2) of section 263 of the Act would begun to run from the date of the order of original assessment and not from the order of reassessment and in such a situation the order of Ld. PCIT has to be held as without valid jurisdiction rendering the entire proceedings a nullity. 7. The learned counsel has also placed vehement reliance on the judgment of Hon'ble High Court of Bombay in the case of Ashoka Buildcon Ltd., vs ACIT (supra), judgment of Hon'ble High Court of Madras in the case of Indira Industries vs. PCIT (supra) and submitted that when a notice u/s. 263 of the Act raises new issues, which were not subject matter of reassessment proceedings, then the two years period contemplated under sub section (2) of section 263 of the Act would begun to run from the date of original assessment and not from the date of reassessment order dated31.12.2017. He further submitted that for A.Y. 2010-11 when the ITR was processed u/s. 143(1) of the Act by order dated 11.02.2011 then issuing notice on the different issue which was not subject matter of reassessment proceedings, to revise reassessment order dated 31.12 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .2011 after process of return of income filed by the assessee. Thereafter the Assessing Officer initiating reassessment proceedings challenging the genuineness of transaction of share capital received by the assessee from two entities, which was closed by making addition in the hands of the assessee u/s. 68 of the Act. 11. From the copy of the from para 2 and 3 of show cause notice dated 09.02.2021 issued by the Ld. PCIT to the assessee clearly reveals that the Ld. PCIT firstly noted that as per information DCIT, Central Circle 2(2), Mumbai it was informed by the AO of assessee that assessee company has received accommodation entries through two companies viz. Advanced Technology Ltd. and Yantra Natural Resources Ltd. As we have noted above the AO has made addition of entire Rs. 95 lakhs in the hands of assessee u/s. 68 of the Act concluded the reassessment proceedings and passing reassessment order on 31.12.2017. No other issue was picked up by AO for initiation of reassessment proceedings which could entitle the Ld. PCIT for alleging the reassessment order as erroneous and prejudicial to the interest of revenue. The impugned notice u/s. 263 of the Act as well as impugned revisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... passed on 11.02.2011 and not from subsequent reassessment order. Therefore as per preposition rendered by Hon'ble Supreme Court and various High Courts as noted above the initiation of reassessment proceedings to revise assessment order dated 11.02.2011 would reckoned from said dated would and on 31.03.2013 and beyond this period revisionary proceedings u/s. 236 of the Act is not permissible as being barred by limitation. Therefore in view of foregoing discussion we reach a conclusion that the Ld. PCIT was not validly entitled to assume revisionary jurisdictional u/s. 263 of the Act to issue notice and to pass impugned order for alleging the same as erroneous and prejudicial to the interest of revenue. At the cost of repetition we again point out that when the Assessing Officer has initiated reassessment proceedings of two entities and made addition of entire amount then the purpose of reassessment proceedings was fully satisfied as the AO did not provide any relief to the assessee and taxed the entire amount picked by him for initiation of reassessment proceedings. So far as other entities are concerned the Ld. PCIT was entitled to initiate revisionary proceedings alleging the ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itted that the AO during reassessment proceedings called for details of other shares subscribers and the assessee company duly furnished details as desired by the AO which is available from pages 20 to 332 of assessee paper book. He further explained that the said evidences tabulated at pages 370 to 374 were duly verified and accepted by the AO as correct thus it is evident that the order passed by the AO cannot be termed to be erroneous as per provisions of section 263 of the Act, and various judgement of Hon'ble High Court including judgement of Hon'ble jurisdictional High Court of Delhi in the case of CIT vs. Kelvinator of India Ltd. 12 taxmann.com 445 (Del) and judgment of in the case of CIT vs. DLF Ltd. reported as 350 ITR 555 (Del). The learned counsel as also placed reliance on the judgments of Hon'ble Bombay High Court in the case of CIT vs. Reliance Communication Ltd. 396 ITR 217 (Bom) and CIT vs. Nirav Modi 390 ITR 292 (Bom). 14. Replying to the above the learned CIT(DR) drawing our attention towards impugned notice and order u/s. 263 of the Act submitted that the assessment order was rightly alleged as erroneous and prejudicial to the interest of revenue as the shares w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ntities and taxing the two entities. In such a situation the learned PCIT is not entitled to invoked revisionary powers u/s. 263 of the Act. 16. On careful consideration of above submissions first of all we reiterate that while adjudicating ground no. 7 of assessee. We have recorded a conclusion that the impugned revisionary order setting aside the reassessment order dated 31.12.2017 as barred by limitation as the PCIT has ignored a very important fact that the AO to initiate reassessment proceedings to examine two entities has made addition in the hands of assessee u/s. 68 of the Act, pertaining to entire amount received by the assessee from two entities. Therefore if the learned PCIT proceeds to invoke revisionary proceedings regarding other entities which were not subject matter of reassessment proceedings then the limitation as per requirement of sub section 2 of section 263 of the Act, will run from the date of first assessment order which was passed after process of return u/s. 143(1) of the Act on 11.02.2011. However if we further logically evaluate the impugned revisionary order passed by the learned PCIT u/s. 263 of the Act, then we all find that in para 6.3 the learned P ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
