AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2022 (9) TMI 467
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....equate opportunity to the appellant as required under law, thereby violating the principles of natural justice, hence the order requires to be cancelled. 4. That the notice, initiation and all subsequent proceedings u/s 148 is bad in law, is without jurisdiction, barred by limitation and requires to be cancelled. 5. The notice u/s 148 and service thereof is bad in law and the reassessment requires to be cancelled. 6. The overlapping issue of notices u/s 148 dt.30.03.2017 & dt.31.03.2017 renders the entire proceeding bad in law. 7. The conditions precedent to justify the reopening of the assessment u/s 147 of the Act being absent, the reopening of the assessment is bad in law and the reassessment requires to be cancelled. 8. That the authorities below erred in framing order under section 144 of the Act without following the prescribed procedure under law. 9. That the order u/s 144 r.w.s.147 of the Act is bad in law, as the appellant had disclosed the material facts fully and truly necessary for assessment and there is no new or fresh information or evidence warranting reopening of the assessment. 10. That the entire reas....
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....nterest u/s 234D of the Act. The levy of. interest u/s 234D is against the express provisions of law. 25. No opportunity has been given before levy of interest u/s 234B, 234C and 234D of the Act. 26. Without prejudice to the appellant's right of seeking waiver before appropriate authority, the appellant begs for consequential relief in the levy of interest u/s 234B, 234C and 234D of the Act. 27. For the above and other grounds and reasons which may be submitted during the course of hearing of the appeal, the assessee requests that the appeal be allowed as prayed and justice be rendered." 2. Facts of the case are that the assessee filed its return of income for the Assessment Year 2012-13 on 30/07/2012 declaring total income of Rs. 33,17,770/-. The return of income was processed under section 143(1) of the Income-tax Act,1961 ['the Act' for short]. Based on the information and after recording the reasons, the case was reopened for scrutiny under section 147 of the Act and notice u/s 148 of the Act dated 31/03/ 2017 has been issued after getting approval from the Additional Commissioner of Income Tax, Range 7(1), Bangalore and properly served....
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.... father of the assessee u/s 131. The AO has recorded that the rise in share value of these companies is totally disproportionate to their financial profile and market standing. Therefore, the AO brought to tax LTCG claimed at Rs. 1,99,52,625/-, Rs 2,41,14,754/- and Rs 5,70,12,623/- respectively for AYs 2012-13, 2013-14 & 2014-15 u/s 68 of the Act. Considering all the aspects in the case, the decision of the AO was upheld by the Ld. CIT(A). 4. Against this assessee is in appeal before us. The Ld. A.R. relied on earlier order of the Tribunal in the case of Sarita Dudheria in ITA No.882/Bang/2020 dated 15.3.2022, wherein the Tribunal confirmed the reopening of assessment. However, on merit remitted the issue to the file of AO to re-examine the case of the assessee afresh. He submitted that similar direction may be given in these appeals also. 4.1 On the other hand, Ld. D.R. submitted that issue may not be remitted to the AO for fresh consideration in view of the judgement of Hon'ble Kolkata High Court in the case of PCIT Vs. Swathi Bajaj and others in ITA Nos.6 of 2022 dated 14.6.2022 and submitted that the assessee has not shown any prejudice caused to the assessee for not givi....
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....ioned that the AO had received information from Directorate of Income Tax (I&CI) and DGIT(Inv)-Kolkata based on which survey was conducted in the assessee's premises on 12.05.2015 and 20.09.2016. Ld. A.R. stated that the factual matrix obtaining in this case is different from that was before Calcutta High Court . Further there was nothing incriminating found against the assessee in the aforesaid survey. When the survey was conducted in the assessee's premises itself there is no need to rely on the general report of the DGIT(Inv),Kolkata. (v) The Calcutta High Court has said that the Investigation report need not be furnished to the assessee and further in para 63 page 100 made a reference to recommendation of SIT on Black money dt.27.04.2015, which was placed in the public domain. The conjoint reading of para 4 and para 63 gives rise to a confusion and overlapping reference to DGIT report and SIT Report. Even though the Calcutta High Court has said that copy of the report need not be furnished still in para 59 page 99 it is stated as extracted hereunder: "59. We are conscious of the fact that there may be exceptions however nothing has been brought before us ....
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....re addition was deleted and the assessment was thus vacated whereas in the 'present case the issue is about applicability of 148 of the Act, non-furnishing of reasons and also a case of best judgment assessment u/s 144 of the Act, wherein the assessee was not given an opportunity as required under law. 5.7 The Calcutta High Court decision being a non-jurisdictional one is not binding in the impugned case especially when it is contrary to the decision of the Hon'ble Supreme Court in GKN Driveshaft- 259 ITR 19 and Suraj Mall Mohta 26 ITR 1. Moreover, Calcutta High Court had no occasion to consider cases involving reopening/reassessment. 5.8 The Ld. A.R. stated that great prejudice is caused to the assessee by not following the established principles of law and fastening huge tax liability. If opportunity as required in law is not given assessee will not be in a position to offer its objections and also discharge onus if any. 5.9 The Ld. A.R. lastly stated that the decision of Calcutta High Court is contrary to decision of jurisdictional High Court in Suresh Kumar Kothari (111.1F) vs ITO in WP' 39373/2014 dt. 29.01.2015. When the decision of jurisdictional High Court ....
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.... 4. It is not in dispute that petitioner was not furnished with the copy of the statement said to he.ve been made by Mukesh Choksi. Petitioner was not aware of the contents of the said statement. However, he filed objections contending inter alia that it was not known how a statement made by third party could be made applicable and made basis for the proceedings that were sought to be initiated. He also points out by way of objection that in dlr.: absence of specific allegations made against the petitioner in the so-called sworn statement, the same could not have been made basis to pass the assessment order against the petitioner. 5. Despite such objections raised, respondent has proceeded to pass the impugned order holding that an amount of Rs.6,34,645/- which reflected the sale proceeds of shares was required to t)-, brought to tax under the head 'Other Sources of Income'. !t is this amount which according to the findings recorded by the respondent was attributed to the petitioner in the so-called sworn statement given by Mukesh Choksi. 6. Thus, it is apparent that wi thout furnishing a copy of the statement stated to have been given by Mukesh Choksi ....
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....ground that the reasons do not mention about any new/ tangible material/ information against the assessee based on which the Ld.AO had reason to believe to reopen the concluded assessment. It is argued that the materials based on which the assessment has been reopened does not contain the name of assessee and hence irrelevant. 5.2. We note that no assessment under section 143(3) was passed in the case of assessee for assessment year 2013-14. Hence the argument of the Ld.AR that the issue of notice under section148 amounts to change of opinion cannot be accepted. Explanation 2 to Section 147 clarifies that, following shall be deemed to be cases where income chargeable to tax has escaped assessment namely: a. Where no return of income has been furnished by the assessee and no assessment has been made although: i. His total income, or ii. ithe total income of any other person in respect of which he is assessable under this Act during the previous year exceeded the maximum amount which is not chargeable to income tax; b. where a return of income has been furnished by the assessee but no assessment (scrutiny/ best judgment assessment....
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....s Services Ltd being penny stock. And it is an admitted fact that assessee had sold the shares in Blue Circles Services Ltd and had earned LTCG. Therefore in order to investigate regarding the purchase/sale of shares in Blue Circles Services Ltd., by assessee, the assessment was reopened by the Ld.AO. The decisions by Ld.AR by Hon'ble Courts on challenge of the validity of reopening in the paper book are distinguishable on facts based on the above discussions. We therefore do find any infirmity in the reopening of the assessment. Accordingly grounds 3 - 10 on legal issue stands dismissed. On Merits: 6. Both sides submit that the arguments advanced by both sides are common for all the assessment years under consideration. 6.1. Perusal of assessment order it is observed that Ld.AO carried out detailed investigation/verification in respect of scrips of alleged companies sold by assessee during the year under consideration and found them to be lacking sound financials. Various' queries raised by Icl.A0 has not been answered with supporting cogent and uncontrovertable documents by assessee. Enquiries carried out by Ld.AO reveal these companies to ....
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....city of assessee in making such huge investment in the alleged companies during the year in which they were purchased. 6.7. The decision of Hon'ble Delhi, Bombay and Madras High Courts is also on distinguishing facts. In those cases, the statements. of third person recorded were direct evidence against the assessed person and cross examination was denied by the revenue. Under such circumstances, Hon'ble Courts held that there was violation of natural justice. 6.8 Therefore in our view, none of the decisions are of any help to assessee on merits in the present facts of the case. The Ld.AR relied heavily on the decision of coordinate bench of this Tribunal in Shri.Lxmipat Dudheria Vs.ACIT in 1TA no.2373 to 2376/ Bang/ 2018 by order dated 09/ 04/ 2019, wherein investment in Bule circles Services Ltd by the assessee therein and the there assessment was reopened which was struck down by this Tribunal. We note that in the decision by this Tribunal nothing is decised on merits but the entire decision was on the validity of reopening where there the assessment order was passed under section144 of the Act. We therefore are of the opinion that the decision is of no resc....