ORDER 

PER PRADIP KUMAR KEDIA - AM:

The captioned appeal has been filed at the instance of the assessee against the order of the Principal Commissioner of Income Tax, Bilaspur (‘PCIT’ in short), dated 31.03.2020 passed under s.263 of the Income Tax Act, 1961 (the Act) whereby the assessment order passed by the Assessing Officer (AO) dated 20.04.2017 under s. 143(3) of the Act concerning AY 2015-16 was sought to be set aside for reframing assessment in terms of supervisory directions.

2. As per the grounds of appeal, the assessee has sought to challenge the jurisdiction assumed by the PCIT under s.263 of the Act and as a corollary, sought to impugn the revisional order passed by the PCIT under s.263 of the Act.

3. The PCIT sought to revise the assessment order dated 20.04.2017 passed under s.143(3) of the Act by way of a show cause notice dated 26.02.2020 served upon the assessee, which is reproduced hereunder:

“Subject: Notice for Hearing in respect of Revision proceedings u/sec 263 of the THE INCOME TAX ACT, 1961 – Year 2015-16 In this regard, a hearing in the matter is fixed on 05/03/2020 at 04:30 PM. You are requested to attend in person or through an authorised representative and file any additional information/documents in support of your application. Attendance is not necessary, .if you wish that the Revision application be decided on the basis of your written submission which may be furnished in this office, on or before the said date. You also have the option to file your submission from the e-filing portal using the link: incometaxindiaefiling.gov.in This is to inform you that the undersigned has examined your assessment records for the A.Y. 2015-16 and from the examination of the assessment order passed in your case u/s. 143(3} of the Act dated 20/04/2017, it is seen and observed that the assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of revenue. In the assessment order the AO has accepted the income returned by you without making proper enquiries and verification. Thus, the assessment order being erroneous in so far as it is prejudicial to the interest of revenue, it is proposed to take revisionary proceedings u/s. 263 of the Act in this case.

2. However, in the interest of natural justice and fair play I am giving you an opportunity to furnish your submission in writing alongwith documentary evidences if any with regard to following points.

2.1 The record reveals that during the year under consideration you have received share application money worth of Rs. 67,11,010/-. The analysis of documents on records shows the following details From the records it is seen that AO has not made proper examination/enquiry with respect to the source of share application money whereas these amount were got transferred from the account of share applicants either after depositing cash on the accounts or transferred in the bank account of share applicants. The AO has not properly examined/verified the creditworthiness of share applicants and genuineness of the transactions. The AO has not properly examined the return of income, balance sheet, computation of income and bank statements of the share applicants. The AO has not properly verified and examined this aspect of the case.

2.2 Record reveals that you have received total fund of Rs. 3,96,52,350/- by way of share capital { Rs. 86,29,290(share capital) + Rs. 3,10,23,060(Security premium)}. The AO has not verified and examined this aspect of the case.

2.3 Record reveals that there is inventory of land of Rs. 3,03,07,934/-. The AO has not verified and examined this aspect of the case.

2.4 P&L account reveals that there are purchases of Rs. 1,85,27,550/- against sale of goods of Rs. 1,77,15,556/- i.e. showing loss. The AO has not verified and examined this aspect of the case.

3. In view of the above lapses on the part of the AO and lack of examination and verification on the part of the AO in respect of the above issues and points, 1 find that the a