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of <h1>Court upholds Assessing Officer's decision to reopen assessment under Income Tax Act for undisclosed share sale income.</h1> <h3>Munjal M Jaykrishna Family Trust Versus Income Tax Officer, Ward 1 (3) (1)</h3> Munjal M Jaykrishna Family Trust Versus Income Tax Officer, Ward 1 (3) (1) - TMI Issues Involved:1. Validity of the notice issued under section 148 of the Income Tax Act, 1961.2. Justification for reopening the assessment based on alleged escaped income.3. Assessment of the petitioner's objections and the respondent's reasons for reopening.Summary:1. Validity of the Notice Issued Under Section 148:The petitioner challenged the notice dated 28.3.2021 issued under section 148 of the Income Tax Act, 1961, seeking to reopen the assessment for the Assessment Year 2017-2018. The petitioner argued that the exercise of powers by the Assessing Officer was based on incorrect facts and lacked a legal foundation. The court noted that the petitioner is a family trust that filed its return of income for the Assessment Year 2017-2018, disclosing an income of Rs. 72,750/-. The notice under section 148 was issued based on the Assessing Officer's belief that income chargeable to tax had escaped assessment.2. Justification for Reopening the Assessment:The Assessing Officer recorded that information from the assessment of Smt. Paru M. Jaykrishna indicated that the petitioner trust had engaged in transactions involving the sale of shares of M/s Aksharchem (India) Ltd. and M/s Asahi Songwon Colours Ltd., which were not shown in the return of income. The Assessing Officer concluded that the petitioner had not disclosed taxable income amounting to Rs. 86,53,31,770/-. The petitioner contended that the claimed escaped income was baseless and that there was no connection between the information from Smt. Paru M. Jaykrishna's case and the petitioner's case. The court emphasized that the formation of belief by the Assessing Officer is within his subjective satisfaction and that the prima facie existence of material justified the reopening.3. Assessment of Petitioner's Objections and Respondent's Reasons:The petitioner raised several contentions against the reopening, including that the reassessment was based on wrong facts and lacked a legal foundation. The court observed that the Assessing Officer had reasons to believe that the assessment required reopening based on information from the assessment of Smt. Paru M. Jaykrishna and the transactions involving the sale of shares by the petitioner trust. The court upheld the Assessing Officer's decision, noting that at the stage of issuing the notice, the sufficiency or correctness of the material is not subject to judicial review. The court concluded that the challenge to the impugned notice under section 148 was meritless and dismissed the petition.
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