AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (2) TMI 1127
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....ed during the course of hearing. He did not afford reasonable opportunities to the appellant before coming to conclusions. He did not provide any opportunity before applying the case law quoted by him in the order. He did not discuss any of the decisions relied on by the appellant and referred to in the written submissions. 4. Assessment order: The assessment order uls 143 read with section 147 is based on conjectures, pre-concluded mindset enquires and materials not directly related to the appellants role. 5. Assesses conduct: The Honourable CIT (Appeals) has failed to appreciate the fact that the assessee had discharged his responsibility in proving the transactions and it is for the A.O. to disprove them before making an addition or disallowing the claims made by the assessee in the return. He had failed to take note of the fact that the share prices of the company under reference has seen ups and downs during a period of 21 months as noted by the A.O in her assessment order and the assessee had no role in these fluctuations. 6. Materials used against the assessee : The learned CIT (Appeals) has failed to note, as pointed out by the appellant in the grounds of ....
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....direct, deliberate, conscious and systematic actions towards converting unaccounted money into long term profit on sale of shares. Neither the AO nor the CIT (Appeals) could show any direct evidence from any source about such an activity on the part of the appellant. 10. Appellant had no control over the share price: The AO and the CIT (Appeals) have failed to note that in the case of the assessee the genuineness of the company MIs. PS IT Infra Services Ltd which is a third part and not under the control of the assessee and whose shares assessee had purchased and sold is the issue. Moreover the purchase and sales of shares were made through recognized stock exchange in the open market from unknown and unconnected peTsons. Therefore the final reason given by the CIT(Appeal) for upholding the Assessment order is without any evidence but merely an unproved allegation on the assessee 11. Long term capital gains exemption: The CIT (Appeals) and the AO have failed to note that the assessee did not sell the shares when the price of share was ruling at its highest Rs,552 per share during July 2014 but sold them after one year of holding to make benefit of long tern' capital gai....
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..... We have heard both parties and considered petition filed by assessee for admission of additional grounds and we find that additional grounds taken by assessee challenging reassessment proceedings in light of notice issued u/s.148 before expiry of time limit for issue of notice u/s.143(2) is purely a legal ground for which there is no requirement of examining any facts and hence in view of specific ratio laid down by Hon'ble Supreme Court in the case of M/s. National Thermal Power Corporation Ltd. Vs. CIT (supra), additional grounds of appeal filed by assessee are admitted. 6. The assessee has raised following additional grounds of appeal:- "1. The learned CIT (Appeals) ought to have noted that the notice u/s 148 issued even before the expiry of time limit for issue of notice u/s l43(2)and thereby re-assessment proceedings are null and void. 2. The learned CIT (Appeals) failed to note that the Assessing Officer never issued notice u/s 143(2) after the assessee filed the return in response to notice u/s148 and therefore the impugned order is invalid. 3. The earned CIT (Appeals) failed to note that the assessing officer reopened the assessment blindly based on the general i....
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.... Services Ltd., as unexplained cash credits and brought to tax u/s. 68 of the Act. 8. The assessee carried the matter in appeal before learned CIT(A) but could not succeed. The learned CIT(A) for the reasons recorded in appellate order dated 19.11.2018 has confirmed additions made by Assessing Officer towards sale consideration received from transfer of equity shares on the ground that entire transaction was fraudulent to create undue and illegal benefit to the assessee . It is immaterial whether assessee has used banking channels or not, but what is relevant to decide whether particular transaction is genuine or not is the substance of transaction between the parties. From the facts gathered during assessment proceedings, it is very clear that assessee has created transaction knowing well that company, agents and other persons involved in the organized racket are aiding assessee to create bogus share transactions resulting to sham transactions, accordingly, opined that there is no error in the findings of Assessing Officer to make addition towards sale consideration received for sale of equity shares u/s.68 of the Act. Aggrieved by learned CIT(A) order, the assessee is in appeal ....
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....within his powers to reopen the assessment, but such reopening can be made even before expiry of time limit for issue of notice u/s.143(2) of the Act. 11. We have heard both parties, perused materials available on record and gone through orders of the authorities below. The solitary question that came up for our consideration in the given facts and circumstances of the case is whether notice issued u/s.148 dated 23.09.2016 is valid and consequent reassessment order passed u/s.143(3) r.w.s 147 dated 30.12.2017 is valid or not? The admitted facts borne out from records clearly indicate that assessee filed return of income for impugned assessment year on 30.09.2015 and said return was processed u/s.143(1) of the Act on 10.08.2016. Further, time limit for issue of scrutiny assessment notice u/s.143(2) was available upto 30.09.2016. It is also an admitted fact that before expiry of time limit for issue of notice u/s.143(2) of the Act, on 30.09.2016, the Assessing Officer has issued reassessment notice u/s.148 on 23.09.2016. It is well settled principle of law by the decision of the Hon'ble Jurisdictional High Court of Madras in the case of CIT Vs. Qatalys Software Technologies Ltd.....
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....According to the Revenue it is immaterial whether the order is communicated or not and the only bar to the reassessment proceedings is that proceedings on the return already filed should have been terminated." ".... A mere glance at this note would show that it could not be said that the Income-tax Officer gave finality to the refund since no refund is granted either in the hands of the trust or in the hands of the beneficiaries. It is an inconclusive note where the Income-tax Officer left the matter at the stage of consideration even with regard to refund in the hands of the beneficiaries. This note was also not communicated to the trustees. When we examine the note dated November 10, 1965, on the file of 1963-64 nothing flows from that as well. In any case if it is an order, it would be appealable under section 249 of the Act. Since the period of limitation starts from the date of intimation of such an order, it is imperative that such an order be communicated to the assessee. Had the Income-tax Officer passed any final order, it would have been communicated to the assessee within a reasonable period. In any case, what we find is that the note dated November 10, 1965, is merel....
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....here is a pendency of the Return before the Assessing Officer. The reasons given by the Tribunal are based on valid materials and evidence and we do not find any error or illegality in the order of the Tribunal so as to warrant interference." 12. We further noted that the Hon'ble Supreme Court in the case of Trustees of H.E.H. The Nizam's Supplemental Family Trust v. CIT (supra) has considered an identical issue and held that it is well settled law that unless return of income already filed is disposed of, notice for reassessment u/s.148 cannot be issued i.e. no reassessment proceedings can be initiated so long as valid return filed by assessee is attained finality. The Hon'ble Supreme Court further held that if assessment is not framed before expiry of period of limitation for the particular assessment year, it would have to be assumed that since proceedings had not been opened under section 143(2), the return had been accepted as correct. It may be argued that thereafter recourse could be taken to section 147, provided fresh material had been received by the Assessing Officer after the expiry of limitation fixed for framing the original assessment. In this case, on perusal ....