TaxTMI 
TaxTMI 
2025 (5) TMI 34
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....hemselves were commenced with the issuance of a notice under Section 148 dated 31 March 2021. Although that notice came to be issued prior to the promulgation of Finance Act, 2021 (2021 Act), the respondents do not appear to have placed the writ petitioner on due notice and apprising it of a right to furnish objections as was contemplated in terms of the directions issued by the Supreme Court in GKN Driveshafts (India) Ltd. v. Income Tax Officer and Ors. ((2003) 1 SCC 72). The reasons for reopening ultimately came to be disclosed in the course of the reassessment exercise itself and when the writ petitioner is stated to have been provided not just the reasons for formation of opinion that income liable to tax had escaped assessment but also....
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....us LTCG. 4. I have examined the information at hand and analyzed with the material available on records and observed that during the period the assessee had sold bogus shares of Rs. 3871920/-. An analysis of his financial details in ITR for the year under consideration reveals that the transactions are suspicious and found non genuine. Considering the unexplained nature of non-genuine/bogus transactions, it is clear that the assessee had income chargeable to tax during the A.Y 2013-14. The case of assessee accordingly come under explanation 2(b) of section 147 of Income Tax, 1961 which lay down that it deemed to be case where income chargeable to tax has escaped assessment. 5. In view of above discussed facts, I have reaso....
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....The AO then proceeded to allege that during the period in question, the writ petitioner had sold bogus shares amounting to INR 38,71,920/-. The AO opined that the transactions appeared to be "suspicious" and "non genuine". It was on the aforesaid basis that it proceeded to observe that income amounting to INR 39,60,000/- chargeable to tax had escaped assessment. 7. The petitioner, upon being confronted with those allegations, filed detailed objections on 16 February 2022. It was at the outset asserted that the notice under Section 148 was based on information pertaining to Dayand Singh and the share purchase information valued at INR 38,71,920/- pertaining to the said assessee. It was further asserted that the notice itself did not rest ....
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....ed the bogus trading which was indulged in by beneficiaries pertaining to the 19 penny scrips in question. 10. Our attention was specifically drawn to Paragraphs 26 (ix) and (xi) and which are extracted hereinbelow:- "ix. The contents of Ground E, F and G are denied as being incorrect and misplaced in law. As it earlier stated that reason was recorded on the information received from investigation wing wherein it was held that assessee was one of the beneficiary to claim bogus LTCG through fabricated contract notes shares sale purchase. The copy of approval u/s 151 from the Competent Authority i.e. PCIT along with reason to believe were duly provided to assessee through ITBA module. Further, the dates of proposal of AO along wit....
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....s not been provided to assessee. However, the relevant information related to petitioner on the basis of which the case was reopened, was duly provided to her. Assessee never sought copy of any specific report of Investigation Wing from the assessing Officer during the assessment proceedings. Also, the relevant extract of the investigation report mentioning the name of the Petitioner is being annexed with this affidavit as Annexure R-1." 11. Having heard learned counsels for respective sides, we find that the disclosures and allegations which are made in the counter affidavit clearly travel far beyond the skeletal allegations which came to be recorded by the AO in support of formation of an opinion that income liable to tax had escaped a....
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....vit, we find that the respondents assert that they were not even obliged to disclose the material information which had been gathered by the Investigation Wing. In the very same breath, they also assert that the petitioner never sought a copy of the report submitted by the Investigation Wing. The stand as taken is thus clearly self- contradictory. 14. In any event, we are of the firm opinion that the AO in order to justify the invocation of Section 148 was undoubtedly obliged to allude to the material facts that may have formed part of the report of the Investigation Wing and which would have given at least a broad indication of the involvement of the petitioner in the alleged manipulation of the 19 penny scrips and thus rendering suppor....