TaxTMI 
TaxTMI 
2023 (7) TMI 1648
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.... that an organized racket of generating bogus entries of LTCG in penny stocks has been unearthed is a result of investigation carried out throughout the country. As a result of this investigation, 64000 beneficiaries who have taken bogus entries of LTCG amounting to Rs. 38,000 crores have been identified. Sh. Kashyap K Mehta, having PAN: AAFPM4290H who is assessed in this charge has also availed of such an entry. The same is reflected in the return of Income filed by the assessee for AY 2011-12 by way of claim of exemption amounting to Rs. 5,22,02,762/- u/s. 10(38) of the Income tax Act, 1961. The Directorate of Investigation has made available various confessional statements of entries involved in the transactions for generating such bogus claims of LTCG. I have examined these statements and the detailed report of the investigation. I have also examined these evidence vis-a- vis the return of income filed by the assessee. After appraisal of these material on record, Here is enough reason to believe that not only the claim of exemption u/s 10(38) of the Act by the assessee at Rs. 5,22,02,762/- is prima facie bogus but by making such bogus claim, the assessee has clearly fa....
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....llowing grounds of appeal taken / relating to the jurisdictional error occurred due to: a.) Non-issuance of the mandatory assessment jurisdiction transfer order u/s 127(2) of the Act by PCIT, while transferring assessment jurisdiction from the ITO Ward 27(3)(2) Mumbai to the ACIT 21(2) Mumbai. b.) Non-issuance of the mandatory intimation u/s 129 of the Act for change in the incumbent AO and never given to the assessee by the AO. c.) Framing the impugned assessment order by illegally assuming jurisdiction u/s 147 of the Act instead of the correct section 153A r.w.s. 153C of the Act, by relying on an incriminating information found by the revenue, admittedly in a search on a third party. Thus, the impugned assessment order passed u/s 147 of the Act is void ab initio and liable to be quashed as illegal. 3.The CIT(A) erred in law and on facts otherwise also in not adjudicating the ground restored by the Hon'ble ITAT challenging the addition of Rs. 5,20,78,411/- made u/s 68 of the Act for LTCG on sale of listed equity shares of Shreenath Commercials and Finance Ltd relying on a report of the investigation wing of the department and some s....
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....aw on these points. First of all, in order to appreciate the issue raised by assessee in the aforesaid submissions, the provisions of the section 153A of the Act as were applicable during the relevant period need to be appreciated which was as below: Assessment in case of search or requisition. 153A. (1) Notwithstanding anything contained in section 139, section 147, section 148, section 149, section 151 and section 153, in the case of a person where a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A after the 31st day of May, 2003 [but on or before the 31st day of March, 2021], the Assessing Officer shall- (a) issue notice to such person requiring him to furnish within such period, as may be specified in the notice, the return of income in respect of each assessment year falling within six assessment years [and for the relevant assessment year or years] referred to in clause (b), in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed and the provisions of this Act shall, so far as may be, apply accordingly as if....
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....us year in which search is conducted or requisition is made which falls beyond six assessment years but not later than ten assessment years from the end of the assessment year relevant to the previous year in which search is conducted or requisition is made. Explanation 2.-For the purposes of the fourth proviso, "asset" shall include immovable property being land or building or both, shares and securities, loans and advances, deposits in bank account. (2) If any proceeding initiated or any order of assessment or reassessment made under sub-section (1) has been annulled in appeal or any other legal proceeding, then, notwithstanding anything contained in sub-section (1) or section 153, the assessment or reassessment relating to any assessment year which has abated under the second proviso to sub-section (1), shall stand revived with effect from the date of receipt of the order of such annulment by the Principal Commissioner or Commissioner: Provided that such revival shall cease to have effect, if such order of annulment is set aside.] Explanation.-For the removal of doubts, it is hereby declared that,- (i) save as otherwise provided in th....
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....t upon the AO to pass order u/s 153A, as after the amendment if the AO is in possession of any document or other evidence which reveal that the income which has escaped assessment is more than Rs. 50 lakhs, which here in this Rs. 6.93 crores. The AO here in this case did not act upon in accordance with the law though specifically brought to his notice by the assessee in writing before completing the reassessment on 28/12/2017. The additional time of 4 years were specifically brought within the scope of relevant assessment years inserted by the Finance Act, 2017, w.e.f. 01/04/2017, if the income escaped assessment is more than Rs. 50 lakhs in terms of 4th Proviso. It is noteworthy that prior to the enactment of the Finance Act 2017, the period covered by the sections 153A/153C and 148 of the Act was limited to the six years only. It is trite law that if there is a special provisions for assuming jurisdiction to pass order, it will always prevail over the general provisions which cannot at all be resorted to make a thing or act apparently permissible which is otherwise impermissible under the special provisions. 21. It is clear as per scheme of the Act, the provisions of the....
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....resorted to section 147 of the Act which he could not have and is hereby quashed. 8. Now coming to ground nos. 2 (a) and (b), the Assessee has also raised the issue that in the instant case, by transferring jurisdiction from ITO, Ward 27(3)(2) Navi Mumbai to the ACIT 21(2) Mumbai, neither the mandatory assessment jurisdiction transfer order has been passed u/s 127(2) of the Act nor the intimation u/s 29 of the Act, for change in the incumbent of AO was given to the Assessee. Therefore, the assessment order being void-ab-initio is liable to be quashed. 8.1 We find that the Hon'ble Tribunal in the case of Assessee's wife case i.e. Rupal Kashyap Mehta Vs. ACIT-21(2) (supra) also dealt with the identical situation/issue and categorically held that the AO ward-21(3)(1) Mumbai who passed the Assessment order in the subjected appeal, never had any jurisdiction of the Assessee's case and therefore the assessment passed by the AO is without a valid jurisdiction. For ready reference and completeness, the concluding part of the order passed by the Hon'ble Tribunal in the said case is reproduced below. 23. Now coming to other legal ground raised by the assessee, that assessment ....
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....ssessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) to any other Assessing Officer or Assessing Officers (whether with or without concurrent jurisdiction) and the offices of all such officers are situated in the same city, locality or place. (4) The transfer of a case under sub-section (1) or sub-section (2) may be made at any stage of the proceedings, and shall not render necessary the re-issue of any notice already issued by the Assessing Officer or Assessing Officers from whom the case is transferred. Explanation.-In section 120 and this section, the word "case", in relation to any person whose name is specified in any order or direction issued there under, means all proceedings under this Act in respect of any year which may be pending on the date of such order or direction or which may have been completed on or before such date, and includes also all proceedings under this Act which may be commenced after the date of such order or direction in respect of any year. 24. The reply given by the income-tax department on 21/03/2022 to the application filed by the assessee under the Rights to Information Act 2005 seeking....
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.... raised by the Assessee in this appeal, have already been dealt with by the Hon'ble Tribunal in the Assessee's wife case, wherein also the identical facts and circumstances existed on the basis of same search and seizure operation carried out on dated 06/10/2017, as involved in the instant case, therefore, respectfully following the said decision of the Hon'ble Tribunal, we are inclined to accept the grounds raised by the Assessee, which are legal in nature and consequently, quashing the assessment order itself being void-ab-initio. 10. Since, we have quashed the assessment order itself, therefore adjudication of the additions on merit would prove futile exercise, hence we are not adverting to. 11. In the result, appeal filed by the Assessee stands allowed. Orders pronounced in the open court on 27-07-2023. ============= Document 1 कारà¥à¤¯à¤¾à¤²à¤¯ Office of the पà¥à¤°à¤§à¤¾à¤¨ आयकर आयà¥à¤•à¥à¤¤-27, मà¥à¤‚बई Principal Commissioner of Income Tax-27, Mumbai चौथी मंजिल, टावर à¤....