Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2021 (12) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2021 (12) TMI 1176 - AT - Income TaxRevision u/s 263 by CIT - Addition u/s 68 - scope of section 147 - unsecured creditors - ‘no enquiry’ or ‘inadequate enquiry’ - HELD THAT:- The opening part of section 147 categorically provides that if the Assessing Officer has reason to believe that any income chargeable to tax has escaped assessment for any assessment year, he may, subject to the provisions of sections 148 to 153, assess or reassess such income and also any other income chargeable to tax which has escaped assessment and which comes to his notice subsequently in the course of the proceedings under this section. Thus, it is evident that section 147 duly empowers the AO to make addition on any other income chargeable to tax which escaped the assessment and comes to his notice during the reassessment proceedings, in addition to the point(s) on which the re-assessment was initiated. Turning to the facts of the instant case, we find that though the AO initiated reassessment for denial of deduction u/s.80G, but he did initiate enquiry on receipt of unsecured loans for which the assessee also furnished certain details as discussed above. In that view of the matter, it cannot be said that the ld. PCIT travelled outside the assessment order passed u/s 147 of the Act, which vitiated the revisionary order. The assessee, situated in Aurangabad, received loans running into crores from certain companies based in Kolkata or Mumbai, that were neither in the financing business nor had any past business dealings with the assessee. No question was asked by the AO as to how the assessee came into contact with them, the answer to which was neither given to the ld. PCIT nor has it come up before the Tribunal. AO issued notice u/s 133(6) to such parties. Most of them did not respond and the AO chose to accept the genuineness of the loan creditors without proceeding further as per law, rather, by recording to the contrary in the assessment order.Most of the companies which replied and filed their Balance sheets etc. had shown to have received huge share premium on issue of share capital without any justifiable valuation. Such companies had declared nominal profit running into thousands or a few lakhs, but the share premium was in crores. These companies were prima facie shell or penny stock companies. AO kept the information received on record without blinking. Four Kolkata based companies who allegedly advanced identical loans of ₹ 25.00 lac each had same address and the AO did not consider it expedient to inquire further.No interest was paid to some of the unsecured loans despite no prior business. We are fully satisfied that there was utter failure on the part of the AO to conduct enquiry in respect of huge loans received by the assessee from various parties thereby rendering the assessment order erroneous and prejudicial to the interest of the Revenue justifying the exercise of revisionary power u/s 263 of the Act. Once it is held that the AO failed to apply his mind to the issue of unsecured loans which ought to have been done in the facts and circumstances of the case thereby rendering the assessment order erroneous and prejudicial to the interest of the revenue, the sequitur is that the exercise of revisionary power gets justified. As can be seen, that the ld. PCIT did not enhance the assessment on any issue but simply restored the matter to the file of the AO: `with a direction that the assessment order should be reframed as per the provisions of law after considering proper facts and submissions of the assessee and also for necessary verification in the light of the observations made above, after affording proper opportunity to the assessee’. If the assessee has an explainable case on the issues taken note of by the ld. PCIT, it can put forth the same before him in the course of proceedings giving effect to the order passed u/s 263. - Decided against assessee.
|