TaxTMI 
TaxTMI 
2025 (5) TMI 1798
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....under:- "4.2.3. In the present case there was a definite information coming from the Investigation Wing and conclusions which have been arrived at by the JAO in the reasons recorded seeking reopening of the assessment were based on certain information and on verification of the return filed by the assessee which showed that assessee had not disclosed true nature of the loan transactions with certain parties. Therefore, the ratio laid down for valid reopening of the assessment has been fulfilled in the present case. In the present case, the reasons for the reopening were recorded by the AO though extracting the information received from the investigation Wing in preamble of the letter and by also noting that the assessee had not disclosed the true nature of its share transaction. 4.2.4. Reliance is placed on the following decisions: "1. Sonia Gandhi vs. Assistant Commissioner of Income-tax, Circle- 52(1) [2018] [Delhi] 97 taxmann.com 150; 2. EtiamEmedia Ltd. vs. Income-tax Officer- 2(2) [2019] 101 taxmann.com 231 (Madhya Pradesh) [19-12-2018]; 3. Empee Holdings Ltd. vs. Deputy Commissioner of Income-tax, Company Circle II(I), Chennai [2019] 109 taxmann.com 10 (Madras) [07-....
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....e 2nd Respondent had issued a Notice dated 01.10.2021 under Section 143(2) read with Section 147 of the IT Act to the Petitioner, wherein, the 2nd Respondent had stated the reasons for reopening the assessment was completed on 25.01.2016. The reasons stated by the 2nd Respondent in the aforesaid Notice dated 01.10.2021 for reopening the assessment are as under:- "The assessee has filed his Return of Income for the A.Y. 2013-14 on 01.10.2013 declaring a total income of Rs. 295,78,310/-. Information received from DDIT (Inv), Delhi states that the assessee has claimed the Long Term Capital Gain on sale of shares of M/s.Mono Herbicides Ltd. u/s. 10(38). As per the records, the purchases of these shares have been undertaken by the following entities: Babita Naresh Jain, Rajesh Kumar Mehta, Rita Mehta etc. On analysis of the financials and markets related information with respect of shares viz., M/s.Mono Herbicides Ltd., it is notices that these are illiquid shares and are not normally traded. The same is proven by the fact that the market cap of the shares during the financial year 2012-13 is either zero or meagre. The price at which they were sold was so phenomenal that it got spiked....
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....ides Limited Babita Naresh Jain, Rajesh Kumar Mehta and Rita Mehta were the counter parties and thus, M/s.Mono Herbicides Limited has used for providing accommodation entry of Capital Gains to the Assessee through the mechanism of reversal trade and therefore, the reopening is correct and the contention of the Petitioner is rejected. 9. The learned Senior Counsel for the Petitioner also submitted that there was no case made out for any non-disclosure of material information for completed assessment under Section 143(3) of the IT Act and therefore, the impugned proceedings started with the issuance of Notice dated 26.03.2021 under Section 148 of the IT Act was beyond limitation. 10. Further, the learned Senior Counsel for the Petitioner submitted that the issue involved herein is no longer res integra and is squarely covered by the decisions of this Court as well as Bombay High Court in the following cases:- i. Tractors and Farm Equipment Limited Vs. Assistant Commissioner of Income-Tax reported in 2018 SCC Online Mad 13767. ii. M/s.Anand Cine Services Pvt. Ltd. Vs. Assistant Commissioner of Income Tax & Others in W.P.No.7690 of 2022 dated 20.02.2024. iii. Commissioner of In....
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....about the nature of the transactions. 16. However, during re-assessment proceedings, the faceless Assessing Officer identified irregularities suggesting that the Petitioner was engaged in "reversal trading mechanism" which involved entities like M/s.Mono Herbicides Ltd., Babita Naresh Jain, Rajesh Kumar Mehta, and Rita Mehta. The "reversal trading mechanism" involved the coordinated purchase and sale of shares in penny stocks to manipulate prices and provide accommodation entries for artificial capital gains. 17. It is further submitted that re-assessment was initiated based on information suggesting unusual gains claimed under Section 10(38) of the IT Act. The Assessment reported Short Term Capital Gains under Section 111A of the IT Act, specifically involving the purchase and sale of shares in M/s.VMS Industries Limited. Detailed scrutiny revealed that the Assessee purchased 4,00,000 shares on 30.11.2012 for Rs. 81,28,568/- and another 3,00,000 shares on 03.12.2012 for Rs. 62,91,823/-. Thereafter, on 23.01.2013 and 29.01.2013, the Assessee sold 4,50,000 and 2,50,000 shares, respectively for a combined total of Rs. 2,53,77,000/-, reflecting an extraordinary appreciation of appro....
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....der the New Regime as in force with effect from 01.04.2021 in terms of the decisions of the Hon'ble Supreme Court in "Union of India and Others Vs. Ashish Agarwal", [2023] 1 SCC 617. 23. The law on the subject has been also further clarified by the Hon'ble Supreme Court in "Union of India and others Vs. Rajeev Bansal", [2024] 167 taxmann.com 70 SC. However, there is no dispute on this aspect as the Impugned Section 148 Notice itself was received by the Petitioner prior to 01.04.2021. 24. Therefore, the issue to be considered is whether the Respondents were justified in re-opening the assessment that was completed under Section 143(3) on 25.01.2016 for the Assessment Year 2013-2014 issuing the Impugned Section 148 Notice dated 26.03.2021. The law as it prevailed then prescribed limitation under Section 149 of the IT Act. As per Section 149 of the IT Act, the limitation for issuing Notice for re- opening of the assessment under Section 148 of the IT Act reads as under:- "149. (1) No notice under Section 148 shall be issued for the relevant assessment year, - (a)if four years have elapsed from the end of the relevant assessment year, unless the case falls under clause (b....