2022 (8) TMI 250 - HC - Income Tax

Reopening of assessment u/s 147 - Validity of order u/s 148A(d) and notice u/s 148 - HELD THAT - As this Court finds that if the averments in the writ petition are true and correct, then the scrutiny assessment of VSFPL had concluded even prior to the issuance of the notice u/s 148A(d) of the Act to the Petitioner. It is strange that the said information was not reported by the VFSPL s Assessing Officer to the Petitioner s Assessing Officer. In any event, to cut the controversy short, the impugned order passed under Section 148A(d) and the notice issued under Section 148 both dated 6th April 2022 are set aside and the AO is directed to pass a fresh order within four weeks u/s 148A(d) after considering the averments documents placed on record in the present writ petition and the scrutiny assessment order passed in the case of VFSPL as well as the fact that VFSPL had furnished the PAN/GSTIN details in response to the notice issued under Section 142(1).

Summary

Issues:
Challenge to show cause notice under Section 148A(b) and order under Section 148A(d) of the Income Tax Act, 1961 for Assessment Year 2018-19.

Analysis:
The petitioner challenged a show cause notice dated 22nd March, 2022, under Section 148A(b) of the Income Tax Act, 1961, and an order under Section 148A(d) dated 6th April, 2022, along with a notice issued under Section 148 of the Act for the Assessment Year 2018-19. The notice alleged that transactions made by Vishesht Financial Services Private Limited (VFSPL) through the petitioner-broker resulted in income escapement as VFSPL could not provide PAN/GSTIN details of the entities involved in the transactions. The petitioner contended that it is a SEBI registered broker providing an online trading platform without involvement in clients' transactions. The petitioner argued that the notice issued under Section 148 of the Act was illegal based on the assessment of VFSPL. Despite VFSPL's scrutiny assessment concluding without additions, the impugned order under Section 148A(d) was passed without considering the petitioner's detailed reply, requesting information supporting the reopening of assessment. The court noted discrepancies in the assessment process and directed the Assessing Officer to pass a fresh order under Section 148A(d) within four weeks, considering the documents and scrutiny assessment order of VFSPL, where PAN/GSTIN details were furnished. The impugned order and notice were set aside, and the petition was disposed of, leaving the parties' rights and contentions open.