2025 (6) TMI 297 - AT - Income Tax

Revision u/s 263 - AO failed to conduct any investigation into the genuineness of share application money and share premium received by the assessee - HELD THAT - It emerges out from the record that assessee has received share application money alongwith share premium. In assessment year 2012-13 the detail of share application has been noticed by the AO but AO could not carry out the enquiry as contemplated u/s 68 of the Income Tax Act. It was practically not possible for him to verify identity of the share applicants their credit worthiness and genuineness of the transaction because some of the share applicants were from Kanpur Shahjahanpur (UP) Rampur (District Pilibhit) etc. The assessee did not appear before the Tribunal and did not submit any details in support of its appeals. After going through the order of the CIT passed under Section 263 of the Act we do not find any error. Accordingly both the appeals are dismissed.

Summary

Summary:The Income Tax Appellate Tribunal (ITAT) Chandigarh dismissed two appeals filed by the assessee against the Commissioner of Income Tax's orders dated 21.02.2019 passed under Section 263 of the Income Tax Act for AY 2012-13 and 2014-15. The CIT had exercised jurisdiction under Section 263 to set aside the assessment orders on the ground that the Assessing Officer (AO) failed to conduct any investigation into the genuineness of share application money and share premium received by the assessee, despite the significant capital inflows (e.g., share capital increased by Rs. 57,80,000 and premium Rs. 98,65,000 in AY 2012-13, and share capital increased by Rs. 3,59,66,670 in AY 2014-15).The Tribunal noted that the AO did not verify the identity, creditworthiness, or genuineness of the share applicants as required under Section 68 of the Income Tax Act, partly due to logistical difficulties (share applicants located in various distant places). The assessee failed to appear or submit any evidence supporting its appeals. The Tribunal found no error in the CIT's exercise of power under Section 263 and upheld the setting aside of the assessment orders, dismissing both appeals.