2020 (3) TMI 1113

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....intimated about the death of Smt. Sushila Choudhuri and to prove this fact, the ld. AR drew our attention to the correspondence made by the Income-tax Department to the assessee to the effect that Shri Ravi Choudhary is the Legal heir of Smt. Sushila Choudhari, who expired on 10-09-2012. It is noted by the department that Smt. Sushila Choudhari had demised on 10-09-2012. Further, it is also noted that Shri Ravi Choudhary informed the department that he was the legal heir of the deceased person vide correspondence dated as early as January 09,2014. Moreover, it is noted that the despite the assessee informing the department and the department having acknowledged his request to be considered as legal heir has been approved vide letter correspondence dt. January 09,2014, still notice u/s. 148 of the Act has been issued on 21-03-2018 proposing to re-open the assessment for the AY 2011-12 in the name of Late. Sushila Choudhury. Since notice has been issued admittedly on a dead person, despite the department coming to know of this fact as early as on 09 January, 2014 according to the ld. AR, the AO's order to re-open the assessment on a dead person is bad in law. 3. Per contra, ld.....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....hares of these penny stock companies for the purpose of claiming long term capital gain to bring unaccounted money into their books without payment of tax. As per the modus operandi discussed in the investigation report, those who wants to book bogus capital gain are asked to buy shares when the price is low and sell the shares at a pre-determined particular date and time to avail the bogus entry of desired capital gain. The report also reveals that these transactions are accommodated in lieu of cash of equal amount and commission charged over and above at certain fixed percentage for providing such accommodation entry. Investigation carried out by the Directorate of Income Tax (Investigation), Kolkata revealed that the share price of "BLUEPRINT SECURITIES LTD." is one of those' penny stock companies listed with Calcutta Stock Exchange (CSE) was also artificially rigged to provide entry of bogus LTCG. A list of beneficiaries had been identified. As per the information furnished in the report, the assessee had transacted in shares of "BLUEPRINT SECURITIES LTD." and sold shares of "BLUEPRINT SECURITIES LTD." involving trade value at Rs. 3,05,800/- during A.Y. 2011-12 and....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....ar under consideration is deemed to be a case where income chargeable to tax has escaped assessment. 7. In this case, since more than four years have lapsed from the end of assessment year under consideration, a proposal is put up before L.d. Pr. C.I.T.-12, Kolkata through Add C.I.T., Range-36, Kolkata for giving necessary sanction to issue notice ii]«. 148 of the I.T. Act, 1961 for the A.Y. 2011-12 as per the provisions u/s 151 of the I.T. Act, 1961. " Form ITNS-10 along with relevant enclosures is put up before the Ld. Pr. CIT-12, Kolkata for kind perusal and approval. " 5. Referring to the above reasons, the ld. AR submitted that the AO having received an information from the ld. Pr. DIT (Inv.) Kolkata vide letter dt. 21-09-2015 has recorded the reasons and issued notice dt. 21-03-2018 to Smt. Sushila Choudhari, who expired on 10-09-2012. According to the ld. AR a perusal of said reasons as recorded/mentioned hereinabove, would reveal that there was an information that a very large number of persons had taken entries of huge bogus long term capital gain (LTCG) in an organised manner through share transactions of penny stock companies listed with Calcutta Stock ....

X X   X X   Extracts   X X   X X

Full Text of the Document

X X   X X   Extracts   X X   X X

....eopening the assessment. Therefore, according to the ld.AR in any event notice issued u/s. 148 against a dead person is bad in law since the reasons recorded is vague and shows that it was recorded without application of mind. So according to ld AR the AO lacked jurisdiction to reopen the assessment of assessee. Therefore, according to ld. AR the initiation of re-opening is bad in law. 7. After hearing of both the parties and on perusal of record, I note that the AO has reopened the assessment on the deceased person, Late. Sushila Choudhari, who expired on 10-09-2012, which fact had been intimated to the department and the department had responded to Shri Ravi Choudhari addressed as Legal Heir of Late. Sushila Choudhari, thereby acknowledged that Shri Ravi Choudhari is the legal heir of late Sushila Choudhari . However, it is noted that AO issued notice dt. 21-03-2018 issued u/s. 148 of the Act in the name of Smt.Sushila Choudhari proposing to reopen the assessment for the A.Y 2011-12 and thereafter made additions of Rs. 5,12,240/- u/s. 68 and Rs. 12,806/- u/s. 69C of the Act, totalling to Rs. 5,25,046/- vide order passed u/s. 143(3) r.w.s 147 of the Act dt. 11-12-2018. This act....