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2023 (8) TMI 886 - HC - Income TaxReopening of assessment u/s 147 - reason to believe that Petitioner s income chargeable to tax has escaped assessment based on an alleged SEBI Investigation report, in which, Syncom Formulations Limited has been found to be involved in bogus LTCG and loss to beneficiaries - According to Petitioner, this order has been passed without jurisdiction because no separate order disposing Petitioner s objections has been passed - HELD THAT - Petitioner is a family member of the promoter group of Syncom Formulations Limited and there has never been any investigation by SEBI against Syncom Formulation Limited. Petitioner, therefore, is justified in seeking a copy of the report on which reliance has been placed while arriving at the conclusion that there are reasons to believe that income of Petitioner has escaped assessment. Therefore, we hereby quash and set aside the Assessment Order and remand the matter back to Jurisdictional Assessing Officer (JAO), who shall, within two weeks of this order being uploaded, make available to Petitioner a copy of the report of SEBI relied upon in the reasons to believe for re-opening. If the report contains information regarding other entities which are not concerned with Petitioner, the JAO may redact those portions.
Issues:
The issues involved in the judgment are challenging the notice issued under Section 148 of the Income Tax Act, 1961 for re-assessment of income for Assessment Year 2017-18, and challenging the Assessment Order passed under Section 147 r/w. Section 144B of the Act without jurisdiction. Challenging the Notice under Section 148: The Petitioner challenged the action of Respondent No. 1 in issuing a notice dated 31st March 2021 under Section 148 of the Income Tax Act, seeking to re-assess the Petitioner's income for Assessment Year 2017-18. The Petitioner contended that the order was passed without jurisdiction as no separate order disposing of the Petitioner's objections to the notice had been issued. Reasons for Re-opening Assessment under Section 147: The reasons for re-opening the assessment under Section 147 of the Act were made available to the Petitioner, citing reliance on a SEBI Investigation. The investigation revealed alleged doctored transactions in the scrip of Syncom Formulations Limited to book bogus LTCG and loss, with the Petitioner being a beneficiary. The Petitioner's counsel requested a copy of the SEBI report, which was not provided by Respondent No. 1 despite repeated requests. The Petitioner argued that the basis for believing that the Petitioner's income had escaped assessment was an alleged SEBI Investigation report, which the Petitioner had the right to access. Judgment and Directions: The High Court quashed and set aside the Assessment Order dated 31st March 2022, remanding the matter back to the Jurisdictional Assessing Officer (JAO). The JAO was directed to provide the Petitioner with a copy of the SEBI report relied upon within two weeks. The Petitioner was given the opportunity to file further objections to the notice within two weeks of receiving the report. The JAO was instructed to dispose of the objections within three weeks after a personal hearing for the Petitioner. If the order disposing of objections was prejudicial, the final Assessment Order would be passed within four to eight weeks, depending on the circumstances. Disposition and Clarification: The petition was disposed of with no order as to costs. The Court clarified that no observations were made on the merits of the matter, focusing solely on the procedural aspects and the right of the Petitioner to access relevant information for the assessment process.
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