2023 (3) TMI 524 - HC - Income Tax

Reopening of assessment u/s 147 - Period of limitation to issue notice issued u/s 148A(b) - power to extend the time period under the first proviso to section 149(1) - frequent high value transactions through transfer and through RTGS in the account - information has been flagged on the insight portal as uploaded by the Directorate of Income Tax (Systems) after risk profiling based on enquiry reports and finding of Directorate of Income Tax (Investigation) and Directorate of Investigation Criminal Investigation - respondent authorities has forcefully argued before this Court that the case is covered under the Explanation in Section 149 where the asset also includes the deposits in the bank account, moreover, it is not an exhaustive definition but, by all means an inclusive definition - HELD THAT - Having heard both the sides and having also considered the material on the record, the aspect that needs to be considered by this Court is as to whether any interim relief at this stage is necessary, since the re-assessment for the AY 2015-16, 2016- 17 and 2017-18 continue, pursuant to the notice issued under Section 148 of the Act in post Union of India versus Ashish Aggarwal 2022 (5) TMI 240 - SUPREME COURT At this stage, learned advocate, Mr.Hardik Vora seeks permission to withdraw these petitions - Permission, as prayed for withdrawal, is granted keeping all contentions open for the petitioners.

Summary

Issues Involved:
Challenge to notice issued under Section 148 of the Income Tax Act for A.Y. 2015-16, 2016-17, and 2017-18; Justification for alternative efficacious remedy; Stay of reassessment proceedings; Merits of the case based on previous court orders; Unsubstantiated transactions in bank accounts; Fake transactions with Ardor Group; Interpretation of 'asset' under Section 149 of the Act; Approval granted by Principal Commissioner; Inclusive definition of 'asset'; Suspicious transactions revealed on the insight portal; Actions against Ardor Group; Necessity of interim relief; Permission to withdraw petitions.

Analysis:
The High Court dealt with a case challenging the notice issued under Section 148 of the Income Tax Act for multiple assessment years. The respondent justified the challenge by pointing out the availability of alternative efficacious remedies under the Act. The petitioner sought a stay on reassessment proceedings, citing a previous Apex Court order in a similar case. The respondent highlighted suspicious high-value transactions in the petitioner's bank account, including fake transactions with the Ardor Group, leading to a complaint by the CBI.

The petitioner argued that the transactions in question did not qualify as 'assets' under the Act, thus questioning the validity of the reassessment. Additionally, objections were raised regarding the approval granted by the Principal Commissioner instead of the Principal Chief Commissioner. The respondent contended that 'asset' under Section 149 includes bank account deposits, emphasizing the inclusive nature of the definition. The respondent relied on the insight portal data and actions against the Ardor Group to support their case.

After hearing both parties and reviewing the evidence, the Court considered the necessity of interim relief during the ongoing reassessment for the relevant assessment years. Ultimately, the petitioner sought permission to withdraw the petitions, which was granted, with all contentions left open. Consequently, the petitions were disposed of as withdrawn, and the prayer for interim relief was vacated.