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2017 (3) TMI 138 - AT - Income TaxRevision u/s 263 - genuineness of the transaction of the receipt of share capital and the capacity and identity of the persons who were investors in the share capital of the assessee not checked by AO - Held that:- From a reading of the entire of the CIT it is clear that the main plank of the case of CIT is that mere sending notices u/s 133(6) of the Act to the various share applicants and getting their replies was not sufficient, in the given facts and circumstances of the case, namely the receipt of huge premium by a company which was a newly formed company. It is for this reason of lack of proper inquiry that proceedings u/s 263 of the Act had been invoked by the CIT. The absence of the word “erroneous order” is not very fatal as reading of the entire order of the CIT would go to show that he was of the view that order of the AO was erroneous because the AO failed to make proper enquiries which were warranted in the facts and circumstances of the case. Apart from the above, we also find from para-16 of the impugned order that the CIT has clearly observed that order of the AO was erroneous and prejudicial to the interest of the revenue. The reference in the impugned order regarding existence of nine share holders when in fact there are only six share holders, in our view is not very material. What is material is the quality of enquiry that was made by the AO. This enquiry was not proper and had not been carried to its logical conclusion. The fact that proceedings initiated in the case of the share applicants u/s 263 of the Act were dropped is not very material and that fact ipso facto cannot be the basis to conclude that proceedings u/s 263 ought not to have been invoked by the CIT in the case of the case of the assessee. Reference made by the ld. Counsel for the assessee to Instruction No.2 of 2015 of CBDT dated 29.01.2015 is thoroughly misplaced as those instructions of CBDT was given in the context of transfer pricing provisions u/s 92 of the Act and has no relevance to the present case. We therefore hold that jurisdiction u/s 263 was properly exercised by the CIT and his action does not call for any interference. - Decided against assessee.
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