Tribunal quashes assessment due to lack of jurisdiction under Section 147, assessee's appeal allowed.

The Tribunal allowed the appeal of the assessee, quashing the assessment for lack of jurisdiction as the reopening of the assessment under Section 147 was found to be invalid. The Tribunal did not address the merits of the case, leaving the other grounds of appeal open.

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Issues Involved:
1. Validity of notice issued under Section 148 of the Income Tax Act.
2. Addition of Rs. 17,00,00,000 as unexplained cash credit under Section 68.
3. Treatment of business loss of Rs. 9,09,65,476 as speculation loss under Explanation to Section 73.
4. Charging of interest under Sections 234A, 234B, and 234D.

Issue-wise Detailed Analysis:

1. Validity of notice issued under Section 148 of the Income Tax Act:
The assessee challenged the validity of the notice issued under Section 148, claiming it was "bad in law" and that the assessment should be quashed. The primary contention was that the reopening of the assessment was done without any new material or information that could form a "bonafide belief" that income had escaped assessment. The assessee argued that the reopening was based on a "change of opinion," which is not permissible. The Tribunal agreed with the assessee, noting that the reasons to believe did not indicate any new material or information. The Tribunal cited the Supreme Court's judgment in ACIT Vs. Rejesh Jhaveri Stock Brokers Pvt. Ltd., emphasizing that reopening requires tangible material. The Tribunal concluded that the reopening was invalid as it was based on the same set of facts considered during the original assessment, thus constituting a change of opinion.

2. Addition of Rs. 17,00,00,000 as unexplained cash credit under Section 68:
The Assessing Officer (A.O) added Rs. 17 crores received as share application money, treating it as unexplained cash credit under Section 68. The A.O observed that the assessee and the share subscribers had the same address and common directors, and were involved in dubious trade practices as per SEBI's orders. The A.O concluded that the assessee failed to provide credible evidence of the nature, genuineness, and creditworthiness of the share applicants. However, since the Tribunal quashed the assessment for lack of jurisdiction, it did not adjudicate on the merits of this issue.

3. Treatment of business loss of Rs. 9,09,65,476 as speculation loss under Explanation to Section 73:
The A.O treated the business loss as speculation loss, invoking the Explanation to Section 73, which the CIT(A) upheld. The A.O noted that the assessee was involved in manipulative circular trading, violating SEBI regulations, and thus, the loss was non-genuine and unlawful. The Tribunal did not adjudicate on this issue due to the quashing of the assessment for lack of jurisdiction.

4. Charging of interest under Sections 234A, 234B, and 234D:
The CIT(A) upheld the A.O's action of charging interest under Sections 234A, 234B, and 234D. The assessee contended that the A.O did not provide an opportunity to contest the interest charges and that the charging of interest was not in accordance with the law. Again, the Tribunal did not adjudicate on this issue as the assessment was quashed for lack of jurisdiction.

Conclusion:
The Tribunal allowed the appeal of the assessee, quashing the assessment for lack of jurisdiction as the reopening of the assessment under Section 147 was found to be invalid. The Tribunal did not address the merits of the case, leaving the other grounds of appeal open. The order was pronounced on 18.11.2021.

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