2022 (11) TMI 1269 - HC - Income Tax

Petition challenging income tax assessment notice disposed of, rendered moot by no income addition

The Court disposed of the petition challenging the show cause notice under Section 148 of the Income Tax Act for reopening the income tax assessment for ... Reopening of assessment - non disposal of objections - HELD THAT:- Our attention is drawn to the order dated 09.03.2022 received through e-mail by the assessee in relation to the very assessment year. The total income of the assessee is computed as nil. This, according to learned counsel, is no longer available on the website. The reason put forth by the other side is possibly because on 08.03.2022 the Court granted the interim order in favour of the petitioner. Not only the issue of disposal of objection has been put to the rest, but, ultimately, the assessment has been framed where no addition has been made to the income which has thus favoured the petition. The cause of the petition therefore no longer survives. Issues:Challenge to show cause notice under Section 148 of the Income Tax Act for reopening income tax assessment for the assessment year 2016-17.Analysis:The petitioner sought to challenge the show cause notice issued under Section 148 of the Income Tax Act, which aimed to reopen the income tax assessment for the assessment year 2016-17. The respondent provided reasons for the reopening, alleging that the petitioner benefitted from bogus LTCG/STCL related to a penny stock, resulting in an alleged escape of income amounting to Rs. 79,88,004. The petitioner objected to the reassessment proceeding and approached the Court apprehending that the respondent might frame the assessment without disposing of the objection. The prayers in the petition included quashing the impugned notice, staying its implementation, and seeking other just and proper relief. The Court issued notice to the respondents and an interim order was passed. The respondent filed an affidavit-in-reply denying the allegations and contending that the prescribed procedure had not been completed, making the petition premature. The respondent also argued that the grounds against the reopening of assessment were not sustainable.The Court heard arguments from both parties, where the petitioner was represented by Senior Advocate Mr. Tushar Hemani and advocate Ms. Vaibhavi Parikh, while the respondent authority was represented by Senior Standing Counsel Mr. Varun Patel and Standing Counsel Mr. Dev Patel. Attention was drawn to an order received through email by the assessee regarding the assessment year, showing the total income as nil. It was noted that this information was no longer available on the website, possibly due to the interim order granted in favor of the petitioner. The assessment was ultimately framed with no addition made to the income, favoring the petitioner and rendering the cause of the petition moot. Consequently, the petition was disposed of, and the interim relief was vacated immediately.