Amount received as share premium: Applicability of Section 68
- The Assessee in the present case was a company, which was engaged in the business of share dealing & investment. The original return of income for the A.Y. under consideration was filed by it on 11.07.2009 declaring total income of Rs. 990/-. The said return was initially processed under section 143(1) of the Income Tax Act, 1961. The assessment, however, was subsequently re-opened by the Assessing Officer and in the fresh assessment computed under section 147/ 143(3) of the Act by an order dated 28.02.2011, the income of the Assessee was determined by him at Rs. 20,000. The said assessment made by the Assessing Officer was subsequently set aside by the Commissioner of Income Tax vide his order dated 10.03.2014 passed under section 263 of the Act giving direction to the Assessing Officer to make the assessment afresh.
- As per direction of the Commissioner of Income Tax given in the order passed under section 263 of the Act, the fresh assessment proceedings were initiated by the Assessing Officer and since there was no compliance on the part of the Assessee to the notices issued by him during the course of fresh assessment proceedings, the Assessing Officer was left with no alternative but to complete the assessment to the best of his judgment on the basis of material available on record. In the assessment so completed under section 144/ 263/ 143(3)/ 147 for Fabline Engineers P.Ltd. by an order dated 02.03.2015, the total income of the Assessee was determined by the Assessing Officer at Rs. 3.20 crore after making addition of Rs. 3.20 crore by treating the share application money including the share premium received by the Assessee during the A.Y. under consideration as unexplained cash credit under section 68 of the Act.
- The Assessee had stated that applications were filed by the Assessee in writing seeking adjournment of the hearing fixed by the Commissioner of Income Tax (Appeals) on four different dates and since the notice stated to be issued by the Commissioner of Income Tax (Appeals) fixing the appeal of the Assessee for final hearing on 27.02.2018 was never received by the Assessee, the Assessee could not comply with this said notice. The Assessee had also submitted that even the notices were sent by the Assessing Officer during the course of assessment proceedings to the old address of the Assessee and therefore, the Assessee could not comply with the said notices.
- It was considered fair and proper and in the interest of justice to give one more opportunity to the Assessee to put forth its case on merits before the Assessing Officer on the issues involved in the appeal. Accordingly, the impugned order passed by the Commissioner of Income Tax (Appeals) ex parte was set aside and the matter was restored to the file of the Assessing Officer for making fresh assessment on merits after giving the Assessee proper and sufficient opportunity of being heard.