TaxTMI 
TaxTMI 
2026 (5) TMI 664
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....ding the assessee to have taken an accommodation entry to this extent, the entire amount of Rs. 9,63,859/- was added to the income of the assessee towards unexplained money u/s.69A of the Act. The order of the AO was confirmed by the Ld. CIT(A). 3. Aggrieved the order of the Ld. CIT(A), the assessee has come up in appeal before me by raising the following grounds: "1. That the Ld. CIT(A) has erred in law and on facts in upholding the action of the Ld. AO in assessing the income of the Assessee for an amount of Rs. 14,84,589/- as against the declared income of Rs. 5,20,730/- as against the declare income of Rs. 5,20,730/- under the assessment framed u/s.147 r.w.s. 144B of the Act. 2. That the Ld. CIT(A) has erred in law and on facts in upholding the reassessment order passed by Ld. AO u/s.147 r.w.s.144B of the Act despite the lack of proper jurisdiction and non-compliance with the mandatory provisions of the sections 148A, 147 to 151 of the Act. 2.1. That the Ld. CIT(A) has erred in law and on facts in upholding the validity of show cause notice issued u/s.148A(b) of the Act and the order passed u/s.148A(d) of the Act, despite the facts that. same suffe....
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....atter, the action of the Ld. CIT(A) in upholding the action of Ld. AO in making the addition of Rs. 9,63,859/- u/s.69A of the Act on account of sale of shares of M/s. Eicher Motors Ltd., by treating the Long Term Capital Gain of RS. 9,50,748/- as bogus and not allowing the bonafide claim of benefit of exemption u/s.10(38) of the Act, is bad in law and against the facts and circumstances of the case. 4. That the Ld. CIT(A) as well as the Ld. AO has erred in not providing the copy of the adverse material statement recorded against the Assessee and also erred in not providing and opportunity of cross examination to the Assessee, which has amounted to violation of principles of natural justice. 5. That the assessment so framed, upheld an addition made suffers from perverse findings contrary to the facts on record and without providing the material against Appellant. 6. That the levy of interest under the Act is disputed and as such unsustainable in law besides being excessive. 7. The appellant craves leave for adducing necessary evidence, amendments and explanation including written one to the aforesaid grounds and also raised additional grounds in t....
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.... provisions of this section shall not apply to income chargeable to tax escaping assessment for any assessment year in the case of an assessee where the Assessing Officer has received information under the scheme notified under section 135A. Explanation.-For the purposes of this section and section 148, "specified authority" means the specified authority referred to in section 151.] 5.1. As per the said provisions, the AO is required to conduct a preliminary enquiry with respect to the information in his possession suggesting escapement of income. He is also required to provide an opportunity of hearing to the assessee as to why notice u/s.148 of the Act should not be issued on the basis of information suggesting escapement of income and also the results of enquiry conducted by him and after considering the reply of the assessee, he has to decide on the basis of material available on record including the reply of the assessee whether it is a fit case for issuing the notice u/s.148 of the Act. Thus, issuance of notice u/s.148 of the Act requires a preliminary exercise to be carried out by the AO so as to ensure that reopening is resorted to only in those cases, where the....
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....-market to the demat account of beneficiary assessee just before the day of sale and the purchase of shares is shown in back date by issuing forged contract notes. On the day of purchase shown, neither shares were present with the broker nor were they purchased on exchange in the name of beneficiary assessee. INCOME TAX DEPARTMENT As per the information provided by DDIT (Inv), Rohtak through insight portal which is available on record, you have one of such person who have taken accommodation entries of non genuine LTCG amounting to Rs. 10,25,622/- during the F.Y. 2017- 18 relevant to A.Υ. 2018-19. In view of the above, you are requested to show cause as to why a notice U/s. 148 of the Act should not be issued on the basis of the information which suggests that income of Rs. 1025622/- chargeable to tax has escaped assessment in your case for A.Y.2018-19. Your reply/explanation, if any, should reach the undersigned through faceless manner within 8 days of receipt of this letter, failing which it shall be presumed that you have nothing to say in the above matter and the proceedings shall be dealt with, in accordance with the provisions of section 148....
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....other words, exemption of income arising on transfer of equity share acquired on or after 1.10.2004 shall be available only if the acquisition of share is chargeable to Securities Transaction Tax under chapter VII of the Finance (No 2) Act, 2004. It is further submitted that there is no-where in the IT Act mentioned that on the date of purchase the shares must be transferred to the assessee or it must be held by the sub-broker or purchased on exchange in the name of assessee by the said sub-broker. The only requirement is purchase of shares by the assessee. Hence as stated modus operandi is just on the basis of assumptions, conjectures and surmises only. Hence, the assessee has complied with all the necessary conditions for claiming exemption U/S 10(38) of the IT Act, 3.) Now regarding the information received from insight portal from the DDIT(Inv), Rohtak, It is submitted that the assessee has no relation with Trade Next Securities Ltd (Erstwhile Lifeline Securities Ltd), moreover the assessee heard these names from this SCN only. And the assessee has not made any purchases or sold the shares through this broker. Further Sh Deepak Batra CA is th....
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....his reasons nor did the AO supply adverse material to the assessee before passing the order u/s.148A(d) of the Act. The copy of the order passed u/s.148A(d) of the Act was placed at page Nos.11 to 17 of the paper-book. Referring to the same, he drew our attention to the conclusion of the AO at page No.15 of the order after considering the reply of the assessee, which is reproduced hereunder: "The reply filed by the assessee has been verified/analysed with the data available with the Department and found that the same is not tenable and acceptable in view of the following: 1. The assessee's case was emerged the course of search action conducted in the case of Trade Next Securities Limited (Erstwhile Lifeline Securities Limited) along with one beneficiary of long term capital gain exempt U/s 10(38) of the Act, it was found that the assessee and family members have taken long term capital gain accommodation entries. Search action was also conducted in the case of the assessee's counsel Shri Deepak Batra, CA, Rohtak, 2. During the course of search, it was established that the assessee is one of the beneficiary of LTCG. 3. The assessee has not....
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....issued u/s.148A(b) of the Act and without confronting the assessee with all adverse material available. 8. He, thereafter, drew my attention to the decision of the Hon'ble High Court Gujarat in the case of Songwon Specialty Chemicals India (P.) Ltd. reported in (2024) 169 taxmann.com 184 (Guj.), SLP of the Department against which order was dismissed by the Hon'ble Apex Court in its decision reported in (2025) 180 taxmann.com 292 (SC). Copies of both the orders were placed before me. Referring to the decision of the Hon'ble Jurisdictional High Court in the case of Songwon Specialty Chemicals India (P.) Ltd., the Ld. Counsel for the assessee pointed out that the Hon'ble Court in the said decision had categorically held that the order passed u/s.148A(d) of the Act ignoring the reply of the assessee and not controverting the facts stated by the assessee therein was not sustainable in law and, therefore, the jurisdiction assumed, for issuing the notice u/s.148 of the Act is bad in law. He drew our attention to paragraph Nso.8 to 13 of the order of the Hon'ble High Court in the case of Songwon Specialty Chemicals India (P.) Ltd.(supra), the same is reproduced hereunder: "On ....
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.... producing of audit objection in the order under Section 148A(d) of the Act ignoring the reply filed by the assessee is nothing but non application of mind on the part of the respondent-Assessing Officer. The Assessing Officer merely reproduced the contents of the reply filed by the hereinabove without considering the facts that the audit objection contained various factual mistake which is assessee without dealing with the same, which is apparent from the extract of the order reproduced pointed out by the petitioner to the effect that the depreciation on the goodwill was being granted from the Assessment Year 2015-16 onwards to the petitioner and therefore, there is no question of escapement of income for the year under consideration by holding that the petitioner wrongly claimed the depreciation for the Assessment Year 2018-2019. The impugned order is therefore, contrary to the record and liable to be quashed and set aside. 13. In view of the foregoing reasons, both these petitions succeed and impugned notice issued under Section 148A(6) of the Act dated 10th February, 2024 as well as impugned order passed under Section 148A(d) of the Act dated 30th March, 2024 and the i....
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....nion that the AO did not have the tangible material on record that could have persuaded him to form a belief that income, otherwise chargeable to tax, had escaped assessment. The AO did not carry forward the enquiry process once he had received communication from ITO (Nahan). As noticed above, the AO did not furnish either the letter dated 12.03.2018 received from ITO (Nahan) or the relevant intimation received from the ADIT(Inv)/Unit-4(2) New Delhi, along with the document containing "reason to believe" Had the AO furnished the documents, he would have been able to reach a firmer conclusion that crossed the threshold of suspicion and conjecture." 5.1 Hon'ble Rajasthan High court decision in case of Micro Marbles Pvt. Ltd vs ITO 457 ITR 569, was also relied where, Hon'ble High Court held as follows:- "The petitioner in the grounds to the petition has taken a categorical stand that the respondents failed to furnish the information which formed the basis for reopening the assessment. It was not even provided with the statement of Deepak Jain, on which heavy reliance was being placed. There is no averment in the reply of the respondents anywhere that any such....
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....tion assumed by the AO by issuing notice u/s.148 of the Act to frame assessment u/s.147 of the Act was bad in law. 11. The Ld. DR though vehemently objected to the contention raised by the assessee, however, was unable to counter the factual contention made by the Ld. Counsel for the assessee that neither was adverse material pertaining to the alleged accommodation entry taken by the assessee supplied to the assessee along with the copies of reasons in the notice issued u/s.148A(b) of the Act, nor despite the specific request made by the assessee in his letter filed in response to notice issued u/s.148A(b) of the Act and also that the reply of the assessee was not considered by the AO pointing out factual inaccuracies in the facts noted by him relating to alleged escapement of income of the assessee, which were fatal to the issue, while passing order u/s 148A(d) of the Act. He was also unable to distinguish the case laws relied upon by the Ld.Counsel for the assessee, particularly the jurisdictional High Court, holding order passed u/s 148A(d) and notice issued u/s 148 of the Act without considering assesses reply to notice u/s 148A(b) of the Act and without confronting all adve....