2021 (3) TMI 909

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....itioner filed the return of income for the assessment year 2011­2012 on 28.09.2011 disclosing loss of Rs. 1,98,14,401/­. The return was processed under section 143(1) of the Act,1961. Thereafter, by the impugned notice dated 29.3.2018, the respondent sought to reopen the assessment of the petitioner for the assessment year 2011­2012. The reasons recorded for reopening the assessment are as under : "The return of income was filed on 28/09/2011 at Rs.Nil.The same was processed u/s.143(1) of the act on 10/11/2011. 1. This office is in receipt of information through the Office of the DDIT(Inv),Unit­3(1) Kolkata.vide his letter No.DDIT(Inv.)/Kol/NMCE/ Report/2017­18/10742 dated 12.03.2017. As per information it was observed that A survey action u/s.133A of the IT Act was conducted by the O/o Pr.DIT(Inv.), Ahmadabad at the premises of NMCE and it was found that clients/members of NMCE were found to be involved in creating artificial volume and suspected evasion of income­tax by misuse of NMCE platform. After analysis of data,85 entities as identified who had booked contrived losses. During the investigation/enquiry statements of entry operators i....

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.... is deemed to be a case where income chargeable to tax has escaped assessment. It is further to be mentioned that in this case more than four years have elapsed from the end of the assessment year under consideration. Hence, necessary sanction to issue the notice u/s 148 has been obtained separately from the Principal Commissioner of Income Tax­1,AHMEDABAD as per the provisions of sec 151 of the I.T.Act. In view of the above, issue notice u/s 148 of the I T Act." 5. The respondent assessing officer provided reasons for reopening vide letter dated 8.5.2018 to the petitioner. The petitioner raised various objections and requested to drop the reassessment proceedings vide letter dated 6.10.2018. The respondent disposed of the objections vide order dated 25.10.2018. The petitioner has therefore, preferred this petition challenging the impugned notice issued under section 148 of the Act. 6. The learned advocate Mr. B.S. Soparkar for the petitioner submitted that the reasons recorded to reopen the assessment for the Assessment Year 2011­2012 are based upon the facts pertaining to the transactions relevant to the Assessment Year 2010­2011. The learned advocate M....

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....reopening of the assessment is not justified. 9. The learned advocate Mr. Soparkar submitted that the reasons recorded are erroneous inasmuch as no income has escaped assessment because the reopening of assessment for the A.Y. 2011­2012 could not have been made on the ground that the petitioner has booked profit of Rs. 15,55,275/­ by way of misuse of the National Multi Commodity Exchange (for short "the NMCE")) platform for the A.Y. 2010­2011. It was therefore, submitted that the impugned notice is required to be quashed and set aside. 10. On the other hand, the learned Standing Counsel Ms. Mauna Bhatt for the Revenue at the outset submitted that the petitioner is filed at a pre­mature stage inasmuch as only notice under section 148 read with section 147 of the Act has been issued and in the event if the petitioner is aggrieved by reassessment, the petitioner has alternative efficacious remedy by way of filing appeal before the CIT(Appeals). 11. The learned counsel Ms. Bhatt submitted that during the survey under section 133A of the Act at the premises of the NMCE, it was found that the members/clients of the NMCE were involved in creating artificial volume....

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.... the transactions through the counter party i.e. Pinnacle Commodities by way of alleged misuse of the NMCE platform. In paragraph no.4 of the reasons recorded, it is mentioned that the assessee has declared net loss of Rs. 1,98,14,401/­ which is as per computation of total income, however there is no basis or material placed on record by the respondent to prima facie show that profit of Rs. 15,55,275/­ is earned by the petitioner with regard to the transactions relevant to the A.Y. 2011­12. Therefore, it cannot be said that the Assessing Officer has issued notice under section 148 of the Act, 1961 on the basis of the information received for the assessment year 2011­2012. 15. The respondent has tried to buttress the error committed in recording the reasons in the affidavit in reply by stating that there was a typing error in mentioning the assessment year in paragraph no.3 of the reasons recorded by referring to the statement of so­called entry operators recorded wherein they have accepted that 85 entities were identified through which contrived losses were booked and all the companies which were counter party clients were shell/paper companies engaged in pro....