AI Drafter 
TaxTMI 
TaxTMI 
TaxTMI 
2025 (7) TMI 1574
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....rder of passed by the Assessing Officer, National Faceless Assessment Centre, Delhi (in short "the AO") under section 143(3) of the Act pertaining to Assessment Year 2013-14. 2. The assessee has raised the following grounds of appeal: "1. On the facts and in circumstances of the case as well as law on the subject, the learned Pr. CIT has erred in passing the order u/s. 263 by invoking Explanation 2 of Section 263 of the Act, although the assessment order passed u/s. 143(3) of the I. T. Act, 1961 was neither erroneous nor prejudicial to the interest of the revenue. 2. On the facts and circumstances of the case as well as law on the subject, the learned Pr. CIT has erred in setting aside the order passed u/s. 143(3) r.w.s....
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....s/documents unearthed during the course of Investigation. The ld.Pr.CIT further observed that the said scrip INDINFO was used by the assessee to introduce his unaccounted income, and that the transactions carried through the said scrip were in the nature mere accommodation entries in the form of bogus long term capital gains (LTCG) which was claimed tax exempt under section 10(38) of the Act. He observed that the AO in the assessment proceedings, reopened under section 147 of the Income Tax Act, had failed to properly verify and inquire about the said transaction resulting into acceptance of bogus tax exempt long term capital gain of Rs. 96,42,734/-. He show caused the assessee, as to why the assessment order be not set aside for want of pr....
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....tion to the reasons recorded for reopening the assessment by the AO in this case. A perusal of the reasons recorded would show that the assessment in this case was reopened on the same issue with the observation that the assessee had claimed long term capital gain on sale of shares/scrips of INDINFO; that as per the information available with the AO, the said scrip, in which the assessee had traded, was a penny stock, which was used by the brokers/entry providers to provide accommodation entries to the subscribers so as to convert their unexplained cash into long term capital gains. The AO noted that the assessee was also beneficiary of the trading in the said penny stock, as the assessee had traded in the said scrips with the value of Rs. ....
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....e name is SHARE_CERTI SPLIT.PDF C) I have purchased the said shares from M/S. Rockstar Traders Pvt. Ltd. And paid the purchase price by account payee cheque on 25.05.2011. Copy of the bank book and bank passbook for F.Y. 2011-2012 is attached herewit in soft copy in pdf format. File name is BANK_BOOK_PASSBOOK_BOI_2011-12.PDF D) Copy of the demat account statement wherein the shares were dematerialized in soft copy in pdf format. File name is DEMAT_STATEMENT.PDF E) Copy of the Contract Notes issued by the SEBI registered Stock Broker M/S. A.C. Choksi Share Brokers Pvt. Ltd. In soft copy in pdf format. File names are CONTRACT_NOTES_1.PDF, CONTRACT_NOTES_2.PDF, CONTRACT_NOTES_3.PDF AND CONTRACT_NOTES_4.PDF F....
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.... the same issue, has simply held that the AO has not made proper inquiries and verifications before passing the impugned assessment order. The above action of the ld.Pr.CIT, in holding, the assessment order as erroneous and prejudicial to the interest of Revenue, without pointing out any error or infirmity, defect or lacuna, in the voluminous details and evidences furnished by the assessee before the AO, cannot be held to be justified. 7.1 As per the provisions of section 263 of the Act, the ld.Pr.CIT/ Commissioner may call for and examine the record of any proceeding under the Income Tax Act, and if he considers that, any order passed therein by the AO is erroneous and prejudicial to the interest of the Revenue, he may after giving the ....
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....further point out, as to why the ld.Commissioner was not satisfied with the details and evidences furnished by the assessee. The Explanation 2 to section 263 of the Act has been inserted vide Finance Act, 2015 w.e.f. 1.6.2015, and hence, the said explanation cannot be applied retrospectively in this case for the assessment year 2013-14. Moreover, as per the said Explanation 2, the order can be deemed to be erroneous and prejudicial to the interest of the Revenue, if in the opinion of ld.Pr.CIT/Commissioner the order is passed without making any inquiry or verification, which should have been made. Such opinion, in our view may not be a mere pretense of the ld.Pr.CIT without giving any reasoning or basis for the same. Such an opinion of the ....