Recent ITAT order on S.263 holding Revisionary Proceedings valid for lack of adequate enquiries on share capital raised
There has been a spate of S.263 proceedings in Kolkata against investment companies raising share capital and assessments done by the A.Os have been set aside for re-doing. As many as 400-plus S. 263 orders are under challenge before ITAT, Kolkata in respect of A.Y :2008-2009 and many more such orders have been challenged for subsequent years. First order on one such case has been passed on 14 th August,2014 holding S. 263 proceedings valid on account of lack of proper enquiry by the A.O.
Full text is given below:
I .T.A. No. 1244/KOL./2013
As s es sment year : 2008-2009
IN THE INCOME TAX APPELLATE TRIBUNAL,
KOLKATA ‘B’ BENCH, KOLKATA
Before Shri Shamim Yahya (Accountant Member),
and Shri George Mathan (Judicial Member)
Star Griha Private Limited, . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . ...............Appellant
96, Garden Reach Road,
[PAN : AAKCS 8181 M]
- Commissioner of Income Tax, . . . . . . . . . . .. . . . . .………….…...............Respondent
Kolkata- I I , Kolkata,
P-7, Chowringhee Square,
N o n e, for the assessee
Shri Ajay Kumar Singh, CIT, D.R. , for the Department
Date of concluding the hearing : August 12, 2014
Date of pronouncing the order : August 14, 2014
O R D E R
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, unjusti fied, bad in law and barred by limi tation. The condi tions precedent for initiation of action u/s 263 did not exist and were not satisf ied in this case. The order so passed deserves to be cancelled in limine.
(2) That the order passed by the Assessing Of f icer was nei ther erroneous nor prejudicial to the interest of
revenue wi thin the meaning of section 263 and the ld. CIT erred in law as well as on facts in assuming jurisdiction u/s 263 and sett ing aside the as sessment with a preconceived notion and a prejudiced mind. The order so passed is liable to be cancelled.
(3)That the ld. CIT erred in holding that receipt of share capital was not properly investigated and was not
justified in imposing her own view of the manner in which enquiry was to be conducted. The directions given by the ld. CIT amount to making a roving & f ishing enquiry, which is outside the scope of the provisions of section
(4) That the ld. CIT erred in law in invoking the provisions of section 263 merely on the basis of the so
cal led ‘background’ wrongly conceived by her which had no appl ication in the facts of the appel lant’s case. The ld. CIT erred in misconstruing the meaning & purport of the principles decided in the Court decisions rel ied on by her which had no relevance in the facts of the appellant’ s case.
3. None represented on behalf of the assessee and Shri Ajay Kumar Singh, CIT, D.R. represented on
behal f of the Revenue.
4. The appeal of the assessee had been f i led on 14.05.2013. The assessee had f i led Stay Pet i t ion in S.P. No. 73/Kol/2013 which came to be disposed of by the Tribunal vide an order dated 20.06.2014. Whi le dismissing the assessee’s Stay Pet i tion, the Coordinate Bench of this Tribunal had posted the appeal for hearing on 27.06.2014. The Stay Pet i t ion was original ly f i led on 29.08.2013. The Stay Pet i tion along wi th the appeal was original ly f ixed for hearing on 04.12.2013. The Stay Pet i t ion was posted on mul t iple dates, l ike 06.11.2013, 21.11.2013, 04.12.2013. On 04.12.2013 the appeal of the assessee was also posted for hearing on 26.12.2013. On 26.12.2013 again adjournment was sought . The Stay Peti t ion along wi th the appeal was posted for hearing on 29.01.2014. Again adjourned repeatedly at the request of the assessee to 07.12.2014, 14.02.2014, 17.06.2014 and f inal ly Stay Pet i tion was disposed of on
20.06.2014 and in the order dismissing the Stay Pet i tion the appeal was posted for hearing on 27.06.2014. On 27.06.2014 again the assessee’s ld. Counsel sought an adjournment , on which date it was speci f ical ly 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 chal lenge is the revision order passed by the CIT- I I , Kolkata under section 263 of the Income Tax Act , 1961. The as sessee has requested for stay of proceedings init iated 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 f i led vide S.P. No. 73/Kol/2013, which was rejected vide order dated 26.03.2014 f ixing the appeal for hearing on out-of - turn basis for 27.06.2014. The assessee 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 as sessee that no further adjournment wi l l be given on 02.07.2014 as this is a priori ty appeal and the asses see even asked for staying the proceedings before the AO, as noted above. In terms of the above, the matter is adjourned to 02.07.2014. Both the parties are informed in the Open Court ”.
5. On 02.07.2014, again adjournment was sought and again wi th the direction that no further adjournment should be granted. The appeal was adjourned to 05.08.2014. The order-sheet noting for 02.07.2014 is
extracted below: -
“Today, when this appeal was cal led for hearing, the ld. Counsel for the assessee, Shri J .M. Thard, Advocate stood up and asked for adjournment for the reason that he could not prepare the appeal as he was busy in some fami ly af fairs and he was out of station for the same. This is despi te the fact that the mat ter was adjourned on last date with a clear direction that no further adjournment wi l l be given but in the interes t of natural justice and keeping the option of fair play open, we grant one more adjournment and for this the ld. CIT(DR) has consented. However, the ld. Counsel for the assessee is directed to give the name and address of Managing Director and Directors of the Company by 8th July, 2014. The Revenue is also directed to bring assessment records as wel l as the record f ile of revision proceedings under section 263 of the Act. In terms of the above, the matter is adjourned to 05.08.2014. No further adjournment wi l l be given on that date. Both the part ies are informed in the Open Court”.
6. On 05.08.2014, when the case was cal led for hearing, again adjournment was sought vide a letter dated 04.08.2014, which was vehement ly opposed by the ld. CIT, D.R. However, the appeal was again adjourned to 12.08.2014. The order-sheet recording for 05.08.2014 is extracted below: -
“Again today, when this matter was cal led for hearing, the as sessee has f i led adjournment peti tion dated 04.08.2014, which states the reason as under: -
“The hearing of the above appeal is f ixed on 05.08.2014 before the Hon’ble ‘B’ Bench of the Income Tax Appel late Tribunal , Kolkata but due to pressure of income tax return f i l ing work in the month of July, we and our counsel could not prepare the case. Therefore, under the facts and circumstances of the case please grant us an adjournment of one month”.
At the f irst instance, they have f i led the stay pet i tion for staying the proceedings before the AO in consequence to revision order passed by the CIT and now they are, time and again, asked for adjournment. On earl ier occasions, i t was made clear that no further adjournment wi l l 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 Commodi ties 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 Securi ties 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 incl ined to grant adjournment, very short adjournment be given. Af ter 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 wi l l 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 mat ter came up for hearing, none appeared on behal f of the assessee. These facts clearly show that the assessee has no genuine interest in having i ts appeal disposed of . Consequent ly this appeal fi led by the assessee is being disposed of exparte qua the assessee.
7. Ld. CIT, D.R. submi t ted that the order passed under section 263 by the ld. CIT, Kolkata-I I , Kolkata was val id. It was the submission that the assessee is a Company which has issued i ts shares of Rs.10/- at a premium of Rs.90/- per share to an extent of 24,55,000 shares. It was the submission that 100 rupees was including a premium. Ld. CIT, D.R. placed before us the Cert if icate of Incorporation of the assessee-company to be of 2007-08. It was the submission that when the Company was incorporated, there were two subscribers to the shares being Shri Ganpat Jain and Shri Subodh Tody. I t was the submission that the said Shri Ganpat Jain has not f i led his return after the assessment year 2006-07. It was the submission that the last return f i led by Shri Ganpat Jain was for the assessment year 2006-07 and there is no return after that . Regarding Shri Subodh Tody, i t was the submission that there is no evidence i tsel f of f i l ing of return regarding the said person. It was the further submission that 263 was invoked by the ld. CIT on the ground that unaccounted money was being converted through a masquerade or a channel of investment in the share capi tal of Company. It was the submission that there were simi lar many other cases, which are pending before the Tribunal . It was the submission that the methodology adopted by the assessee is that , i t f i led return of income which was ei ther not processed or processed only under sect ion 143(1).Then the assessee f i led a letter int imat ing the Assessing Of ficer of an escapement of income of some nominal amount . The Assessing Of f icer issued 148 not ices to which the assessee responds that the return fi led earl ier was to be considered as the return in response to the not ice under section 148. Subsequently the assessment is completed under section 143(3) read wi th section 148 assessing the income of the assessee along wi th the addi t ional income. It was the submission that in most cases, the issuance of the shares at a premium is also recorded in the assessment order. It was thus the submission that by making a reference to the issuance of the shares at a premium in the assessment order, at tempt has been made to subvert the possibi l i ty of another 148 reopening or 263. It was then the submission of the ld. CIT, D.R. that in the present case, the assessee-company came into existence during the f inancial year 2007-08 relevant to the assessment year 2008-09 wi th two subscribers. Then further shares have been al lot ted at a premium. It was the submission that for the assessment year 2008-09, the assessee had f iled i ts return through On- l ine Electronic Fi l ing on 18.09.2008. The said return was processed under sect ion 143(1) on 21.10.2009. Subsequent ly a letter was received from the assessee on 03.05.2010 int imat ing that no intimation has been received. On this letter, the Assessing Of ficer 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 Rs.46,840/- in i ts Prof i t & Loss A/c. and this amount was not allowable in view of the provisions of sect ion 35D of the Act . On 10.05.2010, the assessee requested for the communicat ion of the reasons recorded for the purpose of reopening. Interest ingly the said reasons have not been provided to the assessee. On 10.05.2010, the Assessing Of f icer had also issued 142(1) not ice to the assessee, wherein various detai ls have been cal led for. It was the submission that however, in the 142(1) not ice, there was no requisi tion by the Assessing Of ficer in respect of the al lotment of the shares at the premium. On 17.05.2010, the assessee had appeared and had f i led certain wri tten compl iances. It was the submission that in the said compl iance though there was no requisi tion in respect of the detai ls of the share capi tal received. The assessee f iled certain detai ls wherein the names and addresses and Permanent Account numbers of various companies, who had invested in the shares of the assessee-company at a premium, had been given. It was the submission that notices were issued on 19.05.2010 under section 133(6) to the share appl icants who are al lotted shares of 80000 and above. It was the submission that even the Vokalatnama of the persons, who had appeared before the Assessing Of f icer did not contain the signature of the assessee. It was the further submission that 133(6) notices which had been issued to the various share appl icants were hand del ivered to the assessee. The acknowledgments contained the same signature as the person who has f i led the present appeal . It was the submission that though certain detai ls have been f i led in response to the 133(6) they were incomplete and the Assessing Of f icer had also not veri f ied nor discussed the repl ies. It was the further submission that notices under sect ion 133(6) were issued by hand and substantial numbers of not ices were received by the same person on behal f of the mul tiple Companies. It was the submission that the person who received the not ices for mul tiple Companies was the same person, was signed the Form 36 in the case of the assessee under the name Arihant Jain. It was the submission that nothing has been brought on record to show that Arihant Jain was a Director of the assessee-company. Even i t was the further submission that the original subscribers to the shares of the assessee-company who were also the ident i f ied Directors were Ganpat Jain and Subodh Tody. It was the further submission that subsequent to the Revenue raising this objection on an earl ier date in the hearing of the appeal , the assessee has f iled a revised Form 36 along wi th the grounds of appeal signed by one Jhumar Mal l Saraogi . It was the submission that this Form 36 and grounds of appeal was veri f ied on 31.07.2014. It was the submission that along wi th Form 36 and grounds of appeal were veri f ied on 31.07.2007. The assessee has f iled the GRS-7 received for the Form 18 of the Companies Act for the change of address wherefrom i t is noticed that the receipt was issued on 16.01.2014 and the address of the Registered Of f ice of the assessee-company has been changed w.e. f . 10.01.2014. It was thus the submission that the appeal having been original ly fi led on 14.05.2013. The Form 36 and the grounds of appeal f i led i tsel f were inval id. I t was the submission that nothing has been produced on record to show when the said Jhumar Mal l Saraogi became the Director of the assessee-company. It was the further submission that thus when the original assessment was done, no invest igation had been done by the Assessing Of f icer in respect of the share appl icants, 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 not ice under sect ion 131 had been issued to the shareholders and none had appeared nor responded and consequently the share appl ication money received by the asseessee has been treated as undisclosed cash credi t in the hands of the assessee. It was the further submission that in the present case, there is no order-sheet recording as to the ident i ty, genuineness or the existence of the share appl icants. It was also the submission that whether the shares have been al lotted to the share appl icants have also not been shown. It was the submission that the consequential order having been passed giving ef fect to the order under sect ion 263, in view of the decision of the Hon’ble Jurisdictional High Court in the case of Kai lash Prasad Jain in ITA 232/Kol/2006 dated 12.11.2010, the appeal f i led by the assessee against the order passed under section 263 was l iable to be
dismissed as infructuous. Ld. D.R. also placed rel iance upon the decision of the Coordinate Bench of this Tribunal in the case of Jet Age Securi ties Pvt . Ltd. in ITA No. 637/Kol/2013 dated 18.07.2014 for the assessment year 2008-09, wherein on account of the consequent ial assessment order having been passed, the appeal f i led by the assessee against the order passed under section 263 has been held to be infructuous. It was also the submission that the Hon’ble jurisdictional High Court in the case of Zigma Commodi ties Pvt . Ltd. in W.P. No. 281 of 2014 vide an order dated 08.05.2014 has held as an obi ter dicta that the Commis sioner had received the records prior to the issuance of the show-cause notice and opined that the Assessing Of f icer had fai led to apply his mind object ively and fai led to conduct an inquiry over the subscription of the shares to various subscribers at a high premium. Section 263 of the Act never envisages the separate recording of the sat isfaction before the i ssuance of the show-cause notice but i f i t is clearly discernible from the facts narrated in the showcause notice that the order of the Asses sing Of f icer appears to be erroneous and a prejudice is caused to the Revenue, it would render the said showcause notice legal ly val id”. It was thus the submission that the order of the ld. CIT passed under section 263 was l iable to be upheld.
8. On a specific query from the Bench as to what has led to this sudden spurt in the 263 being ini t iated in the share application and share applicants of the various companies. It was the reply by the ld. CIT, DR in
the fol lowing words: -
“Many of these companies are under investigation by the Ministry of Corporate Affairs as wel l as CBI ,
Enforcement Directorate and SIT. In case of pol it ical ly exposed person, the investigat ions are at a cri tical
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 invest igation by various authori t ies. De hors the fact that there is substant ial al legat ion against many of the share
appl icants and de hors the fact that al legations have been raised wi th regard to these companies, we are bound by the facts as are avai lable 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 f i led i ts return of income for the relevant assessment year declaring an income of a loss of Rs.1,840/- . The assessee has shown a prof i t as per 115 JB at Rs.1,844/- . The assessee as per Memorandum & Articles of Associat ion is in the business of real estate. The anci l l iary businesses are also permi t ted. As per the Profi t & Loss A/c. , the assessee has shown purchases of unquoted shares of various other companies. The l ist of the companies whose shares have been purchased shows that the assessee is holding the shares of the companies from whom the assessee has received share appl icat ion money. The P&L A/c. of the assessee shows no sales at al l . Balance-sheet of the assessee shows no debtors but the cash and Bank balances. The cash in hand being at Rs.5,18,633/- . It also shows TDS receivable of about Rs.50 lakhs and share appl ication money
Rs.84,44,684/- . This being the first year of business of the assessee, TDS receivable of Rs.50 lakhs should i tsel f drawn the at tention of the Assessing Of f icer when there is no sales, no contracts, nothing whatsoever other than the investment in shares of various companies. The total expendi ture as recorded in the Profi t & Loss A/c. is barely Rs.5 lakhs, then how the TDS receivable of Rs.50 lakhs came into play. Surprisingly this has not drawn the at tention of the Assessing Of f icer. Further facts in the present case shows that most of the debi ts into the assessee’s Bank account is by cash cheque. Coming to the assessment order original ly passed shows that in the course of original assessment , TDS certi f icates to the extent of Rs.35,380/- had been produced. The return for the relevant assessment year came to be fi led on 18.09.2008.
On 03.05.2010, the assessee has wri t ten a let ter intimat ing that the int imat ion under sect ion 143(1) has not been received. Not ice under sect ion 148 was issued on 05.05.2010 the assessee responded that the return original ly f i led was to be treated as the return in response to the notice under section 148. Notice under sect ion 142(1) was issued on 10.05.2010 and the assessment came to be completed on 07.07.2010. In short wi thin two months and two days of the not ice under section 148 being issued, the assessment is also completed. Though 133(6) not ices have not been ful ly responded to the Assessing Of ficer instead of doing any veri f icat ion, the assessment has been closed. This i tsel f shows that the assessment was completed in a very hurried manner wi thout doing any investigat ion in the course of assessment . 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 attent ion was drawn on the person who has not f i led his return after the assessment year 2006-07, has found the source for start ing a company during the assessment year 2008-09 and how a company which has got no
business could sel l i ts 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 detai led investigat ion. A perusal of the order sheet recording in the present case as made by the Assessing Of f icer shows no speci f ic invest igation having been done on the share appl icat ion, nor of the receipt of the repl ies to the 133(6) not ices. . However, i t is also pertinent to note that the repl ies to the 133(6) then issued are seen to have the rubber seal of various dates of f i l ing and are conspicuous by the fact that they are al l 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 invest igation having been done. The absence of the complete information as sought for by the Assessing Of f icer under section 133(6) also should have drawn the at tention of the Assessing Of f icer in
respect of the nature of the transactions. Further fact that in the subsequent proceedings giving ef fect to the order of the ld. CIT passed under sect ion 263, no reply whatsoever has been received in response to
the not ices under section 133(6) which has been sent by post clearly shows that the order passed under section 143(3) read wi th sect ion 147 by the Assessing Of ficer on 07.07.2010 was clearly erroneous and
prejudicial to the interest of revenue and the ld. CIT, Kolkata- II , Kolkata has rightly invoked revisionary powers under sect ion 263. This view of ours also find support from the decision of the Hon’ble Ful l Bench of the Guwahat i High Court in the case of Jawahar Bhattacharjee reported in 341 ITR 434 (Gau.)(FB), wherein the Hon’ble Ful l Bench has categorical ly held “not holding such enquiry as is normal and not applying mind to therelevant material in making an as sessment would certainly be erroneous as sessment warranting exercise of revisional jurisdiction”.
10. Further the above facts clearly show that the requisi te and proper inquiries were not done in respect of the share appl ication moneyreceived by the assessee in the course of original assessment order passed on 07.07.2010 nor has the Assessing Of f icer appl ied his mind onthe facts of the case. In these circumstances, in view of the decision of the Hon’ble Supreme Court in the case of Malabar Industrial Company Limi ted
–vs.- CIT reported in (2000) 243 ITR 83 (SC) as also the decision of the Hon’ble Madras High Court in the case of Ashok Leyland Limi ted –vs.- CIT reported in (2003) 260 ITR 599, the act ion of the ld. CIT in set ting aside the assessment order passed under section 148/ 143(3) on 07.07.2010 cannot be faul ted wi th. Consequently in the appeal f i led the assessee is l iable to be dismissed and we do so.
We may also mention here that original ly the appeal has been f i led on 14.05.2013. This appeal was signed by one Shri Arihant Jain. A defect notice had been issued intimat ing that the appeal is defect ive in so far as
the appeal has not been signed by the Managing Director. This defective memo came to be repl ied to by letter dated 15.05.2013. The let ter is signed by the said Shri Arihant Jain. Subsequently on 31.07.2014, a letter has been f i led intimat ing 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 assessee has fi led a let ter int imating that the Directors of the assessee company are Shri Jhumar Mal l Saraogi and Shri Anand Kumar Jain. There is no intimat ion as to when the original Directors of the assesseecompany Shri Ganpat Jain and Shri Subodh Tody were replaced or when Shri Arihant Jain became a Director. There is no informat ion to show when Shri Arihant Jain, Shri Subodh Tody and Shri Ganpat Jain were replaced by the Directors Shri Jhumar Mal l Saraogi and Shri Anand Kumar Jain. Though the assessee has f i led a fresh appeal memo and Form 36 dated 31.07.2014 signed by Shri Jhumar Mal l Saraogi . It is not shown as to how Shri Jhumar Mal l Saraogi was a Director as on 14.05.2013 when the appeal was f i led by the assessee. These facts are being brought out
because i f Shri Arihant Jain is the Director then the appeal fi led by the assessee on 14.05.2013 is wi thin time. However, i f Shri Arihant Jain was not the Director then the appeal primari ly fi led itself would be defect ive and would be l iable for being dismissed. In such a si tuat ion, as Shri Jhumar Mal l Saraogi has signed the Form 36 and grounds of appeal only on 31.07.2014 and if he is to be considered as the Director, then the appeal would be belated in so far as the appeal has been signed and veri f ied only on 31.07.2014. Thus clearly even before the Tribunal the assessee is at tempting evasive method and no facts are being placed.
However, we are not deciding this issue as we have already on the issue of jurisdiction under section 263 upheld the order of the ld. CIT.
11. Coming to the alternat ive argument of the ld. D.R. that the consequent ial assessment order having been passed, the appeal f i led by the assessee has become infructuous and must be dismissed as such. We
may ment ion here that the decision of the Coordinate Bench of this Tribunal in the case of Jet Age Securi t ies Pvt . Ltd. referred to supra was the order passed by the same coram and that the order was passed only
on the ground that the ld. AR in that case had agreed to let the appeal be dismissed as infructuous as he was sure of gett ing rel ief on meri ts. Coming to the decision of the Hon’ble jurisdictional High Court of Calcut ta in the case of Kailash Prasad Jain, i t is not iced that the Hon’ble jurisdictional High Court has categorical ly held that the appeal factual ly had become infructuous but not legal ly in the said case. Hon’ble jurisdictional High Court had held that considering al l the aspects of the mat ter no decision should be rendered as i f they did then the appeal preferred by the assessee against the subsequent order of the assessment wi l l have to be heard on meri t and in that case the quest ion of jurisdiction cannot be raised. It was because of this that the Hon’ble jurisdictional High Court in that case had kept al l points open since the regular appeal had already been preferred and the Hon’ble High Court had held the appeal against the 263 order to have become infructuous. Though in the present case also, the consequent ial orders have been passed and appeals have been f i led before the appropriate authori t ies, still these appeals f i led by the assessee against the order passed under sect ion 263 would not become infructuous in so far as the assessee has raised the issue of jurisdiction of the Commissioner to pass an order under sect ion 263 in these appeals. It is only on the jurisdict ional issue that we have decided these appeals. We have not gone into the facts as those are in the consequent ial order passed by the Assessing Off icer against which the appeals are pending before the appropriate authori t ies. Consequent ly this argument of the ld. CIT, D.R. stands rejected. In the resul t, we uphold the order passed by the ld. CIT under section 263. 12. In the resul t , the appeal of the assessee is dismissed.
Order pronounced in the open Court on 14th August , 2014.
Shamim Yahya George Mathan
(Accountant Member) (Judicial Member)
Kolkata, the 14th day of August, 2014