2022 (12) TMI 37 - HC - Income Tax

Reopening of assessment - Allegation of non disposal of objections - as submitted objections have not as yet been disposed of, the petition is premature - HELD THAT - According to learned Senior Advocate Mr. Hemani, it is not unknown to this Court that pending the petition, objections can be directed to be disposed of as it is a group of the matters where there is hardly any possibility of the respondent taking any other stand while disposing of objections. This was resisted by the other side. We noticed that in today s date, this Court has disposed of two of the matters being Special Civil Application 2022 (11) TMI 1269 - GUJARAT HIGH COURT and 2022 (11) TMI 1268 - GUJARAT HIGH COURT wherein the assessment made is nil and they were the part of the very group, therefore, nothing can be presumed in advance and the stage of disposing of the objections will need to be made available to the respondent authority. Petition being prematured, this Court chooses not to entertain it at this stage. Let the disposal on the strength of the objections raised by the petitioner be made by the authority concerned within two weeks from the date of receipt of copy of this order, on availing opportunity in accordance with law. If any adverse order is passed, no effect be given to the same by the Revenue for two weeks.

Summary

Issues:
Challenge to notice seeking to reopen income tax assessment for the assessment year 2015-16 under Section 148 of the Income Tax Act.

Analysis:
The petitioner, engaged in trading shares, challenged a notice dated 31.03.2021 seeking to reopen income tax assessment for the year 2015-16. The reasons for reopening were based on the petitioner's alleged claim of bogus LTCG on penny stock transactions amounting to Rs. 1,18,41,833. The petitioner sought to quash the notice and stay further proceedings for the assessment year. The Court granted protection to the petitioner and heard arguments from both sides.

The respondent raised objections regarding the maintainability of the petition, arguing that objections had not been disposed of yet, making the petition premature. The Court considered the arguments presented by both parties, noting that objections can be directed to be disposed of even during the pendency of the petition. The Court highlighted previous cases where assessments were nil, emphasizing the need for objections to be considered by the authority concerned.

Ultimately, the Court found the petition premature and chose not to entertain it at that stage. The Court directed the authority to dispose of the objections within two weeks from the date of the order. If an adverse order is passed, the Revenue was instructed not to implement it for two weeks, allowing the petitioner to take legal action if necessary. The Court clarified that it had not expressed any view on the merits of the case, leaving the decision to be made based on its own strength. The matter was disposed of accordingly.