2023 (1) TMI 1230 - HC - Income Tax

Reopening of assessment u/s 147 - order issued u/s 148A(b) - high value shares transaction/activities - HELD THAT - No information has been furnished to the petitioner as to how income chargeable to tax has escaped assessment, and since the order passed u/s 148A(d) of the Act only suggests that the assessee has not established his credit worthiness and failed to prove the source of investment, we are of the view that the best way forward would be to set aside the impugned order passed u/s 148A(d) with the following directions Assessing Officer will carry out a de novo exercise from the stage at which notice under Section 148A(b) is positioned. Before proceeding further, the AO will furnish the relevant information concerning the petitioner, after redacting information which concerns third parties.

Summary

Issues:
Challenge to notices issued under Income Tax Act, 1961 for Assessment Year 2015-16.

Detailed Analysis:

1. The petitioner challenged a notice dated 23.06.2021, a notice dated 01.06.2022 under Section 148A(b) of the Income Tax Act, 1961, and an order dated 31.07.2022 under Section 148A(d) of the Act, along with related notices and letters. The petitioner was alleged to be trading in shares involving a significant amount of Rs. 30 crores.

2. The petitioner contended that he is not in the business of trading in shares and had purchased shares of Vakrangee Limited. The impugned order lacked a basis for initiating reassessment proceedings, and no material was provided to support the allegation of share trading.

3. The respondent argued that Vakrangee Limited was under investigation by SEBI and highlighted the petitioner's admission of purchasing shares but failing to prove the source of investment or provide necessary documentation. The respondent also emphasized the petitioner's failure to disclose a transaction of Rs. 30 crores and establish creditworthiness.

4. The court directed a fresh assessment by the Assessing Officer, starting from the stage of the initial notice under Section 148A(b). The AO was instructed to provide relevant information to the petitioner, ensure cooperation, grant a personal hearing, pass a speaking order, and allow for video conferencing during the hearing. The petitioner was given the right to challenge any adverse decision through appropriate legal remedies.

5. The writ petition was disposed of with the above directions, emphasizing fair assessment procedures and the petitioner's right to challenge the outcome of the reassessment process within the framework of the law.