TaxTMI 
TaxTMI 
2024 (10) TMI 489
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....r has challenged the validity and legality of the notice issued under Section 148 of the Income Tax Act, 1961 (for short 'the Act') for Assessment Year 2013-14. 5. The brief facts of the case are as under : 5.1. The petitioner filed her return of income declaring the total income of Rs. 5,98,540/- on 30th July, 2013 for Assessment Year 2013-14. 5.2. Thereafter, the petitioner received a summons under Section 131 (1A) of the Act to remain present and give submissions with regard to the queries raised as per the questionnaire asking the petitioner to furnish the details with regard to the transaction carried out by her in the National Spot Exchange Limited (for short 'the NSEL'). The petitioner by letter dated 17.04.2017 submitted the details. 5.3. The respondent thereafter, issued the impugned notice dated 20th March, 2020 under Section 148 of the Act forming the reason to believe that income has escaped assessment asking the petitioner to file return on income which was filed on 31.07.2020. The respondent thereafter provided the copy of the reasons recorded along with the notice issued under Section 143(2) of the Act dated 20th September, 2020. The reasons recorded for reopenin....
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.... during the FY 2012-13 relevant to AY 20123-14 in the NSEL platform traded is as under:- Buy Turnover Sell Turnover Total Turnover 16,80,47,529.00 17,20,79,120.50 34,01,26,649.50 From the income details filed it is noticed that there is serious mismatch between the income shown by the assessee before the income tax department and its exposure on NSEL exchange. On perusal of the return of income for the year under consideration, it is found that income and investment shown by the assessee does not commensurate with the huge turnover on National Spot Exchange Limited. Therefore source of investment as discussed above to the tune of Rs. 16,80,47,529/-remains unexplained. In view of these facts and findings, the buy turnover to the tune of Rs. 16,80,47,529/- carried out by the assessee on NSEL Platform clearly represent income escaped assessment for the year under consideration and needs to be reopened within the meaning of section U/s 147 of the I.T .Act." 5.4. The petitioner thereafter filed the objections dated 14.10.2020 stating that the reasons recorded are based upon the wrong factual facts as the petitioner never had any trade through the broker Twenty20 Commodities Pri....
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....and the Assessing Officer is required to consider the objections filed by the petitioner and if not found correct, the petitioner should be provided with the information with the Assessing Officer so as to enable the petitioner-assessee to submit the response to such information which may be disclosed by the Assessing Officer. 7.1. On the other hand, learned Senior Standing Counsel Mr. Karan Sanghani for the respondent No. 1 reiterated the contention raised in the rejection order disposing the objections raised by the petitioner. It was further submitted that the respondent-Assessing Officer has the information with regard to the transactions carried out by the petitioner with Twenty20 Commodities along with the broker Code Number, etc. and therefore, the respondent has a reason to believe that the income has escaped the assessment in the case of the petitioner. 7.2. In support of his submissions, reliance was placed on the following averments made in the affidavit-in-reply filed on behalf of the respondent : "6. With respect to contentions raised in para no. 2 it is submitted that it is seen from the communication available on record that the DDIT(Criminal Investigation-I), Mu....
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....ubmitted by the assessee to SFIO in respect of the said notice were furnished by the assessee. No covering letter or signed questionnaire was furnished by the assessee as per the records available with the FAO. Further, as widely reported in the mainstream news media, SFIO contacted almost 13,000 clients of almost 148 brokers engaged with NSEL (assessee is one such client) to gather certain preliminary information about the brokers. The subject of investigation was the alleged illegal activities carried out by the brokers resulting into unlawful gains to the brokers. The enquires were not against the clients. The same is clear from the contents of the questionnaire issued by the SFIO to the assessee which form Annexure D and E to the petition of the assessee. The same may also be inferred from the report of the SFIO. Kind reference is invited to the Order of SEBI vide no WTM/MPB/EFD1-DRA-IV/ 22/2019 Under Regulation 28 of Securities and Exchange Board of India (Intermediaries) Regulations, 2008 read with regulation 7 of Securities and Exchange Board of India (Stock Brokers and Sub-brokers) Regulations, 1992 in the case of the Broker Anand Rathi Commodities Limited. In the said orde....
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....g an order rejecting the objections filed by the petitioner pursuant to the issuance of notice under section 148 of the Act. The respondent has brushed aside the justification, explanation and reconciliation furnished by the petitioner in the objections to the effect that the impugned notice is issued only considering the salary register of Navsari unit and the salary register of Bardoli unit has not been taken into consideration. In view of reconciliation furnished by the petitioner in the objections, any prudent person would have dropped the reopening proceedings. In facts of the case, the respondent while rejecting the objections, without considering the justification and reconciliation provided by the petitioner, has rejected the same as empty formality. The Apex Court in case of GKN Driveshafts India Ltd. (supra), has devised a mechanism to give an opportunity to an assessee by filing objections to be considered by the department in its true spirit so that an assessee does not have to undergo the gamut of reassessment proceedings unnecessarily. In facts of the case, a bare perusal of the reasons recorded and the justification, explanation and reconciliation provided by the pet....