Reassessment procedure defective where assessee lacked fresh opportunity to rebut specific findings; order quashed and remitted.

Reassessment initiated under provisions for reopening assessments relied on stock-exchange transaction data and alleged accommodation entries; the final order relied on findings not specifically confronted in the reassessment reasons or in fresh opportunity notices. The assessee consistently denied trading in the cited scrips and sought to file explanations and audited accounts, but was not afforded a detailed opportunity to respond to the specific material relied upon. Due to divergence between reasons for reopening and operative findings, the impugned assessment was quashed and the matter remitted for fresh adjudication after permitting a comprehensive reply and production of documents.

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Issues: Whether the assessment order dated 26.05.2023 passed under Section 147 read with Section 144B of the Income-tax Act, 1961 is liable to be set aside and remitted for fresh adjudication after affording the assessee an opportunity to file a detailed reply and produce documents.

Analysis: The reassessment was initiated under provisions of Section 147 read with Sections 148/148A and proceeded under Section 144B, based on stock exchange transactional data and allegations of accommodation entries and unexplained investments. The proceedings record multiple notices under Sections 142(1) and a show cause dated 04.05.2023, while the assessee repeatedly denied trading in the specified scrips and sought to furnish explanations and audited accounts. The rationale stated in the impugned assessment order was found to be inconsistent with earlier reasons and the material on record indicates that the assessee was not afforded a fresh, detailed opportunity to respond to the specific findings relied upon in the final order. Given the divergence between the reasons relied upon for reassessment and the contents of the assessment order, and the availability of transactional reports from stock exchanges relied on by the revenue, the appropriate course is to quash the impugned order and remit the matter for fresh consideration on merits after permitting the assessee to file a comprehensive reply with supporting documents.

Conclusion: The impugned assessment order dated 26.05.2023 is quashed and the matter is remitted to the assessing officer for fresh adjudication after affording the assessee an opportunity to file a detailed reply and produce necessary documents. The result is in favour of the assessee.

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