TaxTMI 
TaxTMI 
TaxTMI 
2023 (11) TMI 42
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.... articulation of the 'reason to believe', the AO concluded that, at least, Rs. 1,04,38,000/- has escaped assessment in the case of the petitioner/assessee for A.Y. 2012-13 within the meaning of Section 147/148 of the Act. 4.1 The AO arrived at this conclusion based on the information received on 16.03.2016 from the Kolkata Investigation Directorate. The information that the AO had received was, broadly, to the effect that certain persons, who were based in Kolkata, had incorporated shell companies. These shell companies were being operated by one Ashish Kumar Agarwal. Furthermore, the information claimed that two persons i.e, Ashok Kumar Kayan and Sushil Kumar Kayan, sharebrokers at the Calcutta Stock Exchange (CSE) and Bombay Stock Exchange (BSE), were providing bogus long-term capital gains (LTCG) through trading in shares of shell companies. The information also revealed that a survey was conducted on the premises of Ashok Kumar Kayan, which disclosed that Ashok Kumar was providing accommodation entries in the form of LTCG, in cahoots with entry providers and promoters of scrips at CSE. 4.2 Ashok Kumar Kayan has, apparently, provided the names of penny stock companies listed o....
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....tion under Chapter VI A [sic...of] Rs. 1,63,94,6338/- (which includes deduction u/s 801C of Rs. 1,62,94,440/-) Subsequently, assessee filed revised return for AY 2012-13 on 04.03.2013 at a total income of Rs. 83,23,681/- wherein assessee has increased income from other sources from Rs. 55,815/- to Rs. 18,23,879/- where as other income, remain same. It was further observed that assessee has claimed exempt income of Rs. 1,56,28,239/- in both the returns which includes: (a) Dividend Income Rs. 40,000/- (b) Long-term capital gains (securities transaction tax paid) Rs. 94,85,883/- c) Share in the profit of firm/AOP Rs. 61,02,356/- The intimation of the assessee being one of the beneficiaries of Penny Stock based on the basis of information of the Investigation Wing Kolkata and subsequent outcome of the preliminary enquiries conducted as above makes firm belief that Income (LTCG) of current year which has been claimed as exempt by Sh. Shashi Mohan Garg has escaped assessment during A.Y. 2012-13 as from the information received I have reason to believe that this LTCG has been earned from the managed transactions in manipulated stocks in CSE. 4. Income Chargeable to tax escapi....
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....ance of notice. This observation seemed odd since, admittedly, notice under Section 148 of the Act was issued on 28.03.2019 and therefore, more than four (4) had elapsed from the end of the relevant AY i.e, 2012-13. What compounds the problem further is that there is a reference to Section 151(2) of the Act, a provision that covers cases where no scrutiny assessment has been made either under Sections 143(3) or 147 of the Act. However, in this case, scrutiny assessment under section 143(3) was completed via the assessment order dated 14.01.2015. 8. According to us, a bare perusal of the 'Form for Recording the Reasons for Initiating Proceedings u/s 148 and for obtaining the approval of the Principal Commissioner of Income Tax, Delhi-05, New Delhi' [see Annexure P-2] [in short, "Form"], reveals that course correction was sought to be made. This is evidenced on the perusal of the response entered against Sr. 10 of the Form, which revealed that the relevant provision applicable to this case was Section 151(1) of the Act, and not, as mentioned by the AO in the 'reason to believe', Section 151(2) of the Act. 8.1 Furthermore, insofar as the reply framed against the query posed in Sr. N....
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....nt for assessment. This becomes even more relevant in the instant case as, admittedly, the petitioner was subjected to scrutiny assessment before the reassessment proceedings under Section 147 were triggered against him. 10.1 Previously, before the said scrutiny assessment order under Section 143(3) was passed, the petitioner/assessee, via letter dated 03.01.2014, had submitted details of LTCG earned from the sale of Blue Print Securities Limited. For convenience, the relevant parts of the letter are extracted hereafter: "CHAUDHARY PRADIP & CO. Chartered Accountants B-136, F.F, Malviya Nagar New Delhi-110017 Ph. 26681669, 26674426 Mob: 9811023553 Email: [email protected] THE INCOME TAX OFFICER Circle 5(1) New Delhi-110002 03/01/2014 Dear Madam/Sir, Reg: Shri. Shashi Mohan Prop M/S/ Deepak Industries 7, Eastern avenue, New Delhi-110065 PAN. No:- AAEPG6256A Assessment Year 2012-13 In continuation to our letter dated 18/12/2014, We under instructions of above said client have to submit to you as under: xxx xxx xxx DETAIL OF LONG TERM CAPITAL GAIN PARTICULARS DATE OF SALE NO. OF SHARE AMOUNT PURCHASE DATE NO. OF SHARE AMOUNT LTCG BLUE PRINTS....