Court refuses to hear challenge on income tax assessment reopening, emphasizes addressing objections first.

The court declined to entertain the petition challenging the notice seeking to reopen the income tax assessment for the year 2015-16, emphasizing the need to dispose of objections before making assumptions. The court directed the concerned authority to address the objections within two weeks, with any adverse order having no immediate effect. The petitioner was granted the liberty to take legal action within this period, and the court refrained from expressing any view on the merits of the matter, ensuring a fair resolution process.

---

---

Issues:
Challenge to notice seeking to reopen income tax assessment for the assessment year 2015-16 under Section 148 of the Income Tax Act.

Analysis:

1. Challenge to Notice under Article 226:
The petitioner, engaged in trading shares, challenged the notice dated 31.03.2021 seeking to reopen the income tax assessment for the year 2015-16. The reasons for reopening were based on the petitioner's alleged claim of bogus LTCG on penny stock transactions amounting to Rs. 1,35,65,738. The petitioner sought to quash the notice and stay further proceedings for the assessment year.

2. Court Proceedings and Objections:
The court issued notice and granted protection to the petitioner. The respondent, through Senior Standing Counsel Mr. Varun Patel, argued that the objections had not been disposed of, making the petition premature. The court heard arguments from both sides, with Senior Advocate Mr. Tushar Hemani representing the petitioner.

3. Decision and Disposal of Petition:
The court noted previous cases where assessments were nil and emphasized the need to dispose of objections before making assumptions. Considering the premature nature of the petition, the court chose not to entertain it at that stage. The authority concerned was directed to dispose of objections within two weeks, and any adverse order was to have no immediate effect. The petitioner was granted the liberty to take legal action within the two-week period.

4. Final Remarks:
The court clarified that it did not express any view on the merits of the matter, leaving it to be decided independently. The case was disposed of with these directions, ensuring the proper disposal of objections and allowing the petitioner the opportunity to challenge any adverse order within the specified timeframe.

---