TMI Blog2023 (1) TMI 706X X X X Extracts X X X X X X X X Extracts X X X X ..... he AO had not made proper enquiries or verifications should be based on his objective satisfaction and not a subjective satisfaction from the assessment order. Merely because, the assessment order in question is not a detailed order that itself, does not mean that the AO had not made enquiries in this respect. Admittedly, the AO asked the assessee to furnish the necessary details from time to time which were duly furnished by the assessee and after considering the same the AO passed the assessment order. It is pertinent to mention here that a deeming fiction has been created in section 263 of the Act by the amendment made by Finance Act, 2015 w.e.f. 01.06.15 wherein it has been mentioned that where the Commissioner is of the opinion that the AO had passed the order without making enquiries or a claim has been allowed without enquiring into the claim or that the same is not in accordance with any order or direction or instruction issued by CBDT, that shall be deemed to be erroneous in so far as its prejudicial to the interest of Revenue. The said deeming provisions, in our view, are not applicable for the assessment year under consideration i.e., A.Y. 2012-13. A perusal of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , the order passed by the Ld. Principal CIT u/s 263 of the Act is bad in law and is liable to be quashed. (b) For that on the facts and in the circumstances of the case the Ld. Principal CIT was not justified in initiating proceedings u/s 263. 2. (a) For that the Ld. Principal CIT erred in excercising the power of revision for the purpose of directing the A.O. to hold another investigation when the A.O. had complied with the directions of the predecessor Principal CIT, Kolkata- 4 in the preceding order u/s 264 passed on 11.03.2016. 3. For that the appellant craves leave to add, alter or delete all or any of the grounds of appeal. 2. The assessee in this appeal has assailed the revision order passed by the ld. Pr. CIT u/s 263 of the Act on the ground that the ld. Pr. CIT has wrongly and illegally exercised his revision jurisdiction for the second time, whereby, he has given the directions to the AO (in short the AO ) to re-examine the same issue which was already subjected to examination and verification during the earlier revision proceedings carried out u/s 264 of the Act vide order dated 11/03/2016 of the then ld. Pr. CIT and whereby, the then ld. Pr. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the consequential assessment order dated 29/04/2016 was passed by the AO whereby the AO accepted the claim of the assessee of share application money and share premium received during the year holding that the assessee has successfully established the identity and creditworthiness of the share subscribers and genuineness of the transactions. 6. Thereafter, the ld. Pr. CIT vide impugned order dated 08/03/2019 exercising his revision jurisdiction u/s 263 of the Act, set aside the assessment order dated 29/04/2016 holding that the above stated issue relating to share application money and share premium received, needs further verifications and that the assessment order passed by the AO was erroneous and prejudicial to the interest of the revenue on the ground of lack of adequate enquiries by the AO. He directed the AO to frame the assessment afresh after making due enquiries and verifications and after giving the assessee a reasonable opportunity to produce documentary evidence which it may choose to rely on for substantiating its own claim. 7. At the outset, the ld. Counsel for the assessee invited our attention to the various details furnished by the assessee, not only during ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... despite all the verification done during the assessment proceedings, the ld. Pr. CIT again referred the matter to the AO for examination and verification and pass a fresh assessment order. The AO in the assessment order dated 29/04/2016 has duly mentioned that the assessee s submission has been verified from the assessment records and further that the identity, creditworthiness of the subscribers and the genuineness of the transactions were well established and that the source of the share application money was duly explained. The AO also verified the issue relation to disallowance u/s 40(a)(ia) of the Act. 9. We have also gone through the impugned revision order passed u/s 263 of the Act and found that the entire order of the ld. Pr. CIT is a general order and the ld. Pr. CIT has not pointed out specifically as to why he was not satisfied and to which of the details, furnished by the assessee. The ld. Pr. CIT has neither mentioned the name and details of the share subscribers nor has he mentioned why he did not believe the identity or creditworthiness of a particular share subscriber, for directing the AO to make further enquiries. 9.1. At this stage, it will be relevant to ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dity of the assessment order for want of necessary enquiries and verifications by the AO relating to share application money and premium, to which the assessee had given a detailed reply. Once a point wise reply was given by the assessee, then a duty was cast upon the Ld. Pr. CIT to examine the reply of the assessee and form a prima-facie opinion as to whether the order of the AO was erroneous so far as it was prejudicial to the interest of Revenue. We further note that the Ld. Pr. CIT did not raise any query as to what enquiries were made by the AO before proceeding to pass the assessment order in question. In our view, once the Ld. Pr. CIT had proceeded to make an enquiry regarding the genuineness of the claim of the assessee, he was supposed to make a prima-facie opinion which may not be a concluding opinion to hold that the order of the AO in his view was erroneous so far as it was prejudicial to the interest of Revenue. The opinion of the Commissioner that the AO had not made proper enquiries or verifications should be based on his objective satisfaction and not a subjective satisfaction from the assessment order. Merely because, the assessment order in question is not a detai ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he assessee. Simply because the ld. Pr. CIT felt that the AO should have made further enquiries on the same issue or that the case was to be examined from some another angle, the same, in our view, cannot be a valid ground to set aside the assessment order. If such an action is allowed by the ld. Pr. CIT in revision jurisdiction then, there would be no end to litigation and there would not be any finality to the assessment. The Explanation 2(c) to Section 263(1) of the Act does not give unbridled powers to the ld. Pr. CIT to simply set aside the assessment order by saying that the AO was required to make further enquiries without pointing out as to what was lacking in the enquiries made by the AO and why the ld. Pr. CIT was not satisfied with the reply and evidence furnished by the assessee. 12. We further note that the issue is squarely covered in favour of the assessee by the decision of the Co-ordinate Bench of ITAT Kolkata in the case of Amritrashi Infra (P) Ltd. vs PCIT in ITA No. 838/Kol/2019; Assessment Year 2012-13; order dt. 12/08/2020, wherein the Tribunal in almost identical circumstances, while relying upon the various decisions of the Higher Courts had concluded as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... presume he has conducted such an exercise, then he has not been able to bring out any adverse factual finding to upset the view of Second AO. So we find no merit in the vague allegation of second Pr. CIT that the second AO has not collected the full facts necessary to decide the issue of share capital premium.So we note that the Second AO, the assessing authority who is a quasi- judicial office has discharged his dual role as an investigator as well as an adjudicator. Looking from another angle of doctrine of merger canvassed before us, we note from the facts of this case that the second Ld. Pr. CIT - 4 by passing the second revisional order dated 14.03.2019 has substituted the First Pr. CIT's order passed u/s. 263 of the Act dated 23.08.2016 with his own order which he cannot do since the second assessment order/re-assessment of the Second AO dated 07.12.2016 was pursuant to the first revisional order of the First Ld. Pr. CIT and on the very same subject matter on which specific directions/instructions were given by the First Ld. Pr.CIT, which direction since having been complied by the AO, brings into operation the doctrine of merger the subject matter i.e. share capital ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on of Ld. Pr. CIT is bad for non- application of mind. In the light of the aforesaid discussion and case laws cited supra, we find merit in the appeal filed by the assessee, therefore, we allow the appeal of assessee on the ground that since the Ld. Pr CIT has exercised his revisional jurisdiction u/s. 263 without satisfying the condition precedent as stipulated in section 263 of the Act. Therefore, we hold that the impugned action of the Ld. Pr. CIT is without jurisdiction and, therefore, is null in the eyes of law and consequently it is quashed and since we allowed ground number 2 3 of the original grounds raised by the assessee, the other additional grounds are left open. As discussed the impugned order of Ld Pr CIT is quashed. 13. In view of the above discussion and consistent with the view taken by the Coordinate Bench of ITAT Kolkata in the case of Amritrashi Infra Private Ltd. (supra), we do not find justification on the part of the ld. Pr. CIT in setting aside the impugned assessment order which was passed by the AO on the directions of the ld. Pr. CIT issued u/s 264 of the Act. The impugned order of ld. Pr. CIT is not sustainable as per law, the same is accordingly q ..... X X X X Extracts X X X X X X X X Extracts X X X X
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