TaxTMI 
TaxTMI 
2025 (7) TMI 1215
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....d order i) Even though it is change of opinion j) Even though no asset exceeding Rs 50 lacs is found as income is not in form asset k) that objections raised by the appellant were exhaustive and self-sufficient but same were not disposed of properly by the FAO by passing a speaking order 2) In the facts and circumstances of the case and in law, the learned A.O. erred adding Rs 4,96,87,796/- a) On the basis of suspicion and presumption b) Based on third party statements c) Without any proof of cash trail d) By wrongly correlating general data of SEBI with the Appellant e) by making only guesswork & overlooking documents and by relying upon cases not applicable in this case. f) By not offering the opportunity to cross-examine the brokers and other persons whose statements were never furnished for rebuttal g) Without confronting result of notices u/s 133(6) or without issuing summons u/s 131 h) By ignoring the fact that transaction is by cheque 3) In the facts and circumstances of the case and in law, the Assessing Officer erred in charging interest u/s 234 and initiati....
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....so raised various grounds in the said reply (Paper Book Page No. 120 - 138). However, the AO passed the assessment order u/s. 147 r.w.s. 144B and assessed total income of Rs. 5,00,65,190/- thereby making disallowance / addition of Rs. 49687796/-. 3.4 Thereafter the assessee challenged the impugned order of the Assessing Officer before the Commissioner of Income Tax (Appeal) (NFAC) in which the assessee challenged the reopening as well as disallowance of losses etc. amounting to Rs. 49687796/-. The assessee filed written submission before the Commissioner Of Income Tax (Appeal) (NFAC) as can be seen from Paper Book Page No. 217-257 in which detailed submission were made by the assessee on reopening as well as disallowance as above said. However, vide order dated 27.12.2024 dismissed the appeal fully. 3.5 Aggrieved by the order of the Ld. CIT(a) (NFAC), the assessee filed the present appeal on 30.12.2024, in which above said grounds of appeal were raised. 3.6 The hearing was fixed in this case and the contention of the Learned Authorised Representative Mr. Bhupendra Shah and The Learned Departmental Representative Mr. Arvind Kumar were heard at length from time to time. They....
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.... SEBI in this case, has also passed adjudication order against the assessee thereby levying monetary penalty for manipulation of market and misuse of BSE exchange platform which is a conclusive proof of the trades of the assessee being non-genuine (Para 11, Page 14 of the AOs order). 2.1 The Securities and Exchange Board of India (SEBI) is not only a regulatory body but also a fact-finding authority that assess and investigates stock market manipulations, including penny stock transactions. 2.2 SEBI has the power to conduct inquiries, collect data, and issue orders based on its investigations. The findings of SEBI carry substantial weight in identifying fraudulent stock transactions and circular trading schemes. 2.3 In the present case, SEBI's investigative findings clearly indicate that the assessee was involved in price manipulation, which forms the basis for reopening the assessment. The assessee has failed to rebut SEBI's findings with credible evidence. 2.4 The Supreme Court and High Courts have repeatedly upheld the reliance on SEBI reports in tax matters where stock market manipulation is evident. In various cases, the courts have....
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....without evidence is incorrect. The following key factors justify the addition: (a) The SEBI investigation reports identified the reversal trades in question as being used for price manipulation. (b) The assessee failed to provide a credible evidence to justify genuiness of these trades as can be seen form Parar 4.5 page 20 0f the AOs assessment order. (c) The trading pattern indicates pre-arranged, artificial losses, a hallmark of sham transactions, as held in Swati Bajaj & Others v. ITO [(2022) 139 taxmann.com 303 (Cal HC)]. 4. Non-Applicability of Rajeev Bansal Judgment 4.1 The assessee has misrepresented the applicability of the Rajeev Bansal case. The Rajasthan High Court quashed the reassessment in R.K. Build Creations Pvt. Ltd. because of non-disposal of objections. However, in the present case, the assessee's objections were duly considered before passing the reassessment order. The substance of the case is different from procedural lapses in Rajeev Bansal case. Notwithstanding above argument, even if a procedural lapse existed, the substantive material evidence as placed on record by the AO, justifies the reassessment. 4....
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.... and notice u/s 143(2) of the IT act 1961 vide dated 11.11.2021 were issued and served on the assessee. Further, the PAN migrated to this office i.e. ITO Ward 1(4), Jaipur on 22.02.2022. However this case, the proceedings were closed on 17.01.2023 with the comments mentioned below (Note sheet of the same is placed on record):- "The present assessment work-item u/s 147 is marked as 'Closed' by ITBA system, in pursuance to board 's approval communicated through NaFAC dated 10.10.2022. In this work- item, Notice u/s 148 was generate by JAO (online or by Manual to system) by using the old provisions of sections 147 to 151 where the date of generation of Notice u/s 148 was in the period 01.04.2021 to 30.06.2021 and for this PAN a new notice u/s 148 under the new 148A provisions has been generated by JAO by selecting the drop down Supreme Court' after the date of Hon'ble Supreme Court decision in "UoI vs Ashish Agarwal 'dated 04.05.2022." 4. Again proceeding u/s 148A of the IT Act 1961 was initiated, keeping in the view of the judgment of the Hon'ble Supreme Court dated 04.05.2022 (2022 SCC online SC 543) in the case of Union of....
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....e case of the assessee is squarely covered by the catena of Judgments filed before us and pointed out that the issue under reopening is completely time - barred. In support of the said contention the Learned Authorized Representative pointed out as follows: 4.1 In the case of Rajiv Bansal (469 ITR 46(SC) it was held that, "e. The Finance Act 2021 substituted the old regime for re-assessment with a new regime. The first proviso to Section 149 does not expressly bar the application of TOLA. Section 3 of TOLA applies to the entire Income-tax Act, including Sections 149 and 151 of the new regime. Once the first proviso to Section 149(1)(b) is read with TOLA, then all the notices issued between 1 April 2021and 30 June 2021 pertaining to assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017,and 2017-2018 will be within the period of limitation as explained in the tabulation below: Assessment Year Within 3 Years Expiry of Limitation read with TOLA for (2) Within six Years Expiry of Limitation read with TOLA (4) read for (4) (1) (2) (3) (4) (5) 2013-2014 31-3-2017 TOLA not applicable 31-3-2020 30-6-2021 2014-2015 31-3-2018 TOLA....
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....osed of." Accordingly The Learned Authorized Representative of the assessee argued that the Judgement of Rajeev Bansal (SUPRA) has become final after the dismissal of appeal of the department in the case of R.K. Build Creations Pvt. Ltd. as above. He therefore contended that the reopening in the appeal before us for A.Y. 2015-16 is also completed time barred. 4.3 Further the Learned Authorized Representative also drew our attention to the judgment of Hon'ble Rajasthan High Court in the case of Late Shri Rafiq Ahmed Querashi (D.B. Civil Writ Petition No. 3667/2023) dated 27/01/2025, the Writ Petition for the A.Y. 2015-16 was allowed in view of judgment in the case of Union of India vs. Rajeev Bansal, Civil Appeal No.8629 of 2024 on 03.10.2024 (2024 SCC ONLINE 754) (Paper Book Page No. 155-157 of the Case Laws.) He also referred to para no. 3 of the said Judgment of Rajasthan High Court, in which it was observed that. Learned counsel for the petitioner relies upon the decision of the Supreme Court in the case of Union of India & ors. Vs. Rajeev Bansal reported in (2024) 469 ITR 46.It is argued that the limitation for assessment year 2015-16 expired on 31.03.2022. Contention is tha....
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....issued between April 1, 2021 and June 30, 2021 pertaining to the assessment years 2013-2014, 2014-2015, 2015-2016, 2016-2017, and 2017-2018 will be within the period of limitation as explained in the tabulation below: Assessment Within Years Expiry of Within Six Expiry of Year Limitation Years Limitation read with (4) read with TOLA for TOLA for (2) (3) (4) (5) 2013-2014 31.03.2017 TOLA not 31.03.2020 30.06.2021 applicable. 2014-2015 31.03.2018 TOLA not 31.03.2021 30.06.2021 applicable. (f) The Revenue concedes that for the assessment year 2015- 2016, all notices issued on or after April 1, 2021 will have to be dropped as they will not fall for completion during the period prescribed under the Taxation and other Laws (Relaxation and Amendment of Certain Provisions) Act, 2020."4. In view of the aforesaid, the impugned order dated 19.07.2022 issued under Section 148(A)(d) of the Income Tax Act,1961 (hereafter the Act) as well as the notice dated 19.07.2022 issued under Section 148 of the Act in respect of AY 2015-16 are liable to be set aside. It is so directed.5. The petition is allowed in the aforesaid terms." The Learned Authorised Representative therefore furthe....
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....he assessee stated that this appeal is also covered by the Judgement of Delhi High Court in the case of Ibibo Group Private Limited [W.P.(C) 17639/2022] 4.6 Similarly The Learned Authorized Representative also point out the Judgment of Delhi High Court in the Case of Adhir Sachdeva [W.P.(C) 17647/2024] (Paper Book Page No. 134-135 of the Case Laws ). The Learned Authorized Representative pointed out that the observation of Delhi High Court at the page no. 135 of Paper Book of case laws is as follows, The first proviso to Section 149(1)(b) requires the determination of whether the time limit prescribed under Section 149(1)(b) of the old regime continues to exist for the assessment year2021-2022 and before. Resultantly, a notice under Section 148 of the new regime cannot be issued if the period of six years from the end of the relevant assessment year has expired at the time of issuance of the notice. This also ensures that the new time limit of ten years prescribed under Section 149(1)(b) of the new regime applies prospectively. For example, for the assessment year 2012-2013, the ten year period would have expired on 31 March 2023, while the six year period expired on 31 March 20....
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.... set aside. The petition is allowed in the aforesaid terms. Pending application also stands disposed of." In view of the same the Learned Authorised Representative prayed that this appeal of Assessee for AY 2015-16 needs to be quashed as the reopening is time barred. 4.8 The Ld AR also drew our attention to Page no. 93-100 of the Paper book of case Laws in the case of Orbit Financial Capital (ITA No.5812/M/2024) in which it is held that. In view of the aforesaid, it is evident that the impugned reassessment action for AY 2015-16 would not sustain. The writ petition is accordingly allowed. The impugned order under Section 148A(d) of the Act dated 23 July 2022 and consequential notice referable to Section 148 of even date are here by quashed and set aside. Thus, the notice u/s.148 issued on 27/07/2022 is clearly barred by limitation. The reason being the test for checking the time limit and the validity of notices issued u/s.148 under new regime applicable from A.Y. 2021-22 and prior regime is, whether & C. O. No.287/M/2024 M/s. Orbit Financial Capital period of six years had expired at the time of issue of such notice or not. In the case of assessee, the period of six years had e....
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....11-120 of the Paper book of case Laws in the case of Munish Financial [I.T.A. No.5055/Mum/2024] in which it is held that. We heard the parties and perused the material on record. In assessee's case, the AO issued the original notice under section 148 dated 29.06.2021 for AY 2015- 16 and consequent to the directions given by the Hon'ble Supreme Court in the case of Ashish Agrawal (supra), the said notice was deemed as notice issued under section 148A(b). The AO after passing the order under section148A(d) issued the notice under section 148 dated 29.07.2022. The contention of the assessee is that the said notice is barred by limitation as per the first proviso to the un-amended provisions of section 149(1) as has been confirmed by the decision of the Hon'ble Supreme Court in the case of Rajeev Bansal (Supra). The relevant observations of the Hon'ble Supreme Court reads as under. Mr N Venkataraman, learned Additional Solicitor General of India, made the following submissions on behalf of the Revenue:- (a) to (e)**** (f). The Revenue concedes that for the assessment year 2015-16, all notices issued on or after 1 April 2021 will have to be dropped as t....
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....04/2021 will have to be dropped as they will not fall for completion during the period prescribed under TOLA. Here notice u/s. 148 for the A.Y. 2015-16 has been issued on 28/07/2022 which is admittedly barred by limitation under the new provision of Section 149(1) and it is not covered under TOLA. Accordingly, all the notices are quashed being barred by limitation on the reasons given above and we are not going on the reasons given by the ld. CIT (A) for quashing the notice." Thus the Learned Authorised Representative once again prayed that the reopening is time barred for the A.Y. 2015-16. 5. The assessee has also challenged that order passed u/s. 148A(d) on 27.07.2022 is merely a change of opinion. 5.1 The Learned Authorised Representative of the assessee drew our attention to Paper Book Page No. 1-2 showing Assessment order passed u/s. 143(3) in the first round of assessment by the JAO on 21.12.2017 5.2 The Learned Authorised Representative also pointed out that during that assessment proceeding a Show cause notice (Paper Book Page No. 3-4) was issued on 24.11.2017 calling upon assessee to furnish It is seen from the details on records that, you have incurred h....
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....created by you. Please note that, this is the final opportunity given to you to submit the details. Failure to submit the details by 04-12-2017 will compel the undersigned to pass ex-parte assessment or the assessment will be passed as per the details available on records. 5.3 After that the JAO issued another supplementary show cause notice (Paper Book Page No. 5). 5.4 In response to the same the assessee submitted detailed reply dated 04.12.2017 on 07.12.2017 (Paper Book Page No. 6-7) along with necessary enclosures. Further the assessee also submitted another reply to supplementary show cause notice on 07.12.2017 along with necessary enclosures (Paper Book Page No. 8). 5.5 In view of the above the Learned Authorised Representative of the assessee strongly contended that the issue of losses in illiquid stock and reversal of trades was already examined by the JAO in the first scrutiny u/s. 143(3). As can be seen from Paper Book Page No. 1 the then JAO has specifically mentioned that all the details were filed from time to time during the assessment proceedings. Therefor initiations of reopening u/s. 148A(b) (Paper Book Page No. 139-181) is nothing but a change of....
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....ch the most important is that in the case of Kelvinator of India Ltd. (2010) 320ITR 56 [SC] Paper Book Page No. 128. The Learned Authorised Representative also quoted numerous case laws on the change of opinion appearing at Paper Book Page No. 130-131. The Learned Authorised Representative also mentioned that there was no failure on the part of assessee to disclose the primary facts before the JAO in the first round of assessment. To support that contention the Learned Authorised Representative relied upon several cases quoted at Paper Book Page No. 131-132. The Learned Authorised Representative therefore submitted that mechanically approval granted u/s. 148A is not tenable under law as per various case laws mentioned in Paper Book Page No. 132-133. Accordingly the Learned Authorised Representative prayed that the reopening carried out by the JAO vide notice dated 27.07.2022 is untenable in law being clearly a change of opinion without an iota of doubt. Accordingly reopening needs to be quashed. 6. The Ld AR of the assessee as sailed the reopening on the basis of the fact that no opportunity of being heard was granted to the assessee before drawing adverse while passing order u/....
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.... 7.2 The Learned Authorized Representative further pointed out that the JAO is duty bound to dispose the same objection seriatim as was held in the case law of GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19 (SC) in which it was held that "New reassessment scheme was introduced with the intent of reducing litigation and promoting ease of doing business. In fact, the legislature brought in safeguards in accordance with the judgment of the Hon'ble Supreme Court in the case of GKN Driveshafts (India) Ltd. v. ITO [2003] 259 ITR 19 (SC) before any exercise of jurisdiction to initiate reassessment proceedings under section 148 of the Act." 7.3 Accordingly the assessee strongly contended that the objection raised at Paper Book Page No. 182-190 and 120-138 Ought to have been disposed off by the JAO /FAO. In the absence of that the reopening initiated u/s. 148A(d) was untenable in law. 8. As regards Ground no. 2 filed by the assessee in this appeal before us, the assessee manily challenged addition / disallowance of Rs. 49687796/- in respect of reversal of trades and illiquid stocks. 8.1 In this regard the Learned Authorized Representative of the assessee argued that th....
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....r, the issue of applicability of TOLA year wise was adjudicated in the case of Rajeev Bansal (SUPRA). Accordingly we find that due date of issuing for notice u/s. 148 for each assessment year starting from 2013-14 till 2017-18 was adjudicated as tabular form as can be seen in Paper Book Page No. 15 of the case law. 10.2 We note from the arguments that the main contention of the assessee is that the reopening made by the JAO vide notice dated 27.07.2022 u/s. 148 is barred by law of limitation because the last date for reopening was 31.03.2022. this contention of The Learned Authorised Representative is strengthened by the several judgments of the Hon'ble Supreme Court &Jurisdictional High Court, Hon'ble Delhi High Court and Orders of Delhi and Mumbai Tribunal quoted above (SUPRA). We have carefully considered the submission of the Learned Departmental Representative dated 24.02.2025 in which it is contended that the Judgement of Rajeev Bansal (SUPRA) as well as R.K. Build Creations Pvt. Ltd. Does not apply to the facts of the case under appeal. We are unable to accept this contention of the Learned Departmental Representative for the simple reason that Hon'ble Supreme Court in th....
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....he income chargeable to tax which is in the form of entry or entries in the books of account had escaped assessment amounts to Rs. 4,96,87,796/- which is more than Rs. 50,00,000/-, AO after following the due procedure has rightly issued the notice u/s 148 on 27.7.2022. Therefore, this ground of appeal raised by the appellant assessee is dismissed." We therefore find force in the argument of the Learned Authorised Representative that the Commissioner Of Income Tax (Appeal) (NFAC) has ignore the Judgement of Rajeev Bansal by dismissing the ground while deciding the faceless appeal and did not adjudicate the reopening as time barred. In this regard we find that the case of the assessee is squarely covered by the Judgement of Supreme Court in the case of Rajeev Bansal (SUPRA and other Judgements of jurisdictional Rajasthan High Cout and Delhi Hogh Court as well as other benches of the Tribunal. We therefore hold that the reopening made by the JAO vide notice u/s. 148 dated 27.07.2022 is time barred and the revenue ought to have withdrawn the same as per the concession made by them before the Hon'ble Supreme Court in the case of Rajeev Bansal (Supra). Be that as it may, the reopening ca....
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....RA) in which the issue of personal hearing during the course of proceeding us/. 148A(b) was discussed and allowed. We are therefor of the considered view that in the absence of personal hearing order passed u/s. 148A(d) dated 27.07.2022 is not tenable in law and accordingly quashed. 10.5 We have carefully considered the rival submission of both the sides, we find that objections were raised by the assessee on merits as well as on law point as seen on the Paper Book Page No. 182-190 and 120-138. These were not disposed off by the Assessing Officer during the course of reopening or reassessment by the JAO or FAO and clearly violative of supreme court judgment in the case of GKN Driveshafts (India) Ltd. (SUPRA). We are therefore inclined to agree with the submission of the Learned Authorized Representative that reopening initiated by the Assessing Officer in this regard is not tenable in law. We also find support from the Judgment in the case of Vivek Saran Agarwal 157 taxmann.com 80 (Allahabad) in which it was held that objection can be raised even during the reassement proceedings. Accordingly we find that the reopening is not tenable in law. 10.6 As regards other grounds of r....