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TMI Blog2024 (7) TMI 443X X X X Extracts X X X X X X X X Extracts X X X X ..... on profit earned by the petitioner by carrying out trading in shares is not reflected and has escaped the assessment. It appears that the Assessing Officer without verification of the record has blindly relied upon the information received and picked up the 09-transaction entered into by the petitioner in BSE F O Segment. Respondent No. 1 has not even co-related such information with the material available with on the record, more particularly, when the said issue has been thoroughly scrutinized in the regular assessment. It is also apparent that the petitioner has provided all the information and thereby disclosed truly and fully all material facts during the regular course of assessment. Therefore, the impugned show-cause notice is without jurisdiction and contrary to the provision of the Act and is liable to be quashed and set aside as there is no fresh tangible material available on record with the AO to have reasonable belief that the income has escaped assessment. The impugned notice for reopening is issued on merely change of opinion in respect of the fact of that the entire profit is offered to tax by the petitioner in the books of accounts and the same is reflected in the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 154 dated 01.02.2018 was passed accepting the error and rectifying the same. 5.4 An appeal was also filed by the petitioner challenging the said assessment order and the appeal of the petitioner was partly allowed vide order dated 30.08.2018. 5.5 The respondent No. 1 thereafter issued the impugned notice under section 148 of the Act dated 27.03.2021 asking the petitioner to file return of income for the Assessment Year 2015-16. The petitioner without prejudice filed its return of income and sought for the reasons recorded for reopening. The petitioner was thereafter provided with the notice u/s. 143(2) recording issues as per reasons recorded for reopening on 24.05.2021. 5.6 Thereafter, the petitioner filed the objections on 22.07.2021 challenging the validity of the notice issued u/s. 148 of the Act. The respondent No. 2 has disposed of the objections of the petitioner on 10.01.2022. Hence, the petitioner preferred this petition challenging the notice dated 27.03.2021 issued u/s. 148 of the Act and the order disposing of the objections raised dated 10.01.2022. 6. Learned advocate Mr. Soparkar for the petitioner submitted that the impugned notice and the order passed by the respo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mind by the respondent-Assessing Officer in absence of any fresh tangible material to show that the income has escaped assessment. 6.5 It was further submitted that the assessing officer while passing impugned order rejecting the objections also has failed to consider the explanation already provided by the petitioner during the regular course of assessment. 6.6 Learned advocate Mr. Soparkar also referred to the additional affidavit filed on behalf of the petitioner wherein it is specifically stated that the petitioner has earned profit of Rs. 5,66,96,530/- from total 09 trades and the petitioner has filed return of income on 21.09.2015 disclosing loss from business amounting to Rs. 2,00,24,774/- which was scrutinized in detail after the petitioner submitted various details in response to the notice dated 04.08.2017. It was also pointed out that the petitioner had supplied ledger account contract notes and details of derivatives transaction carried out through broker-Good Luck Securities in reply dated 26.09.2016 to the show-cause notice issued by the Assessing Officer. It was pointed out that on perusal of these documents, it has become clear that income arising from 09 referred t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ubmitted that the Assessing Officer did not form any opinion while passing order under section 143(3) on the issue under consideration as the case of the petitioner was selected for limited scrutiny only on the issue of mat liability mismatch derivatives (future transaction), sales turn over mismatched, security transaction. It was therefore, submitted that in absence of any investigation into information which subsequently received by the respondent No. 1, it cannot be said that there was change of opinion for reopening of the assessment. 7.4 It was submitted that respondent No. 1 after application of mind have formed a reason to believe that income as escaped assessment on the basis of the information received need not be interfered at this stage. 7.5 In support of his submissions, learned Senior Standing Counsel Mr. Sanghani referred to and relied upon the following averments made in the affidavit-in-reply filed on behalf of the respondent: (v). With reference to paragraph 3.11 it is submitted that the escapement of income has been elaborated upon in the reasons recorded by the AO. There is clear escapement of income due to which the case was reopening for assessment. It is stat ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct are satisfied. 7.6 It was therefore submitted that the petition being devoid of any merit, is liable to be dismissed summarily. 8. Having heard learned advocate for the respective parties and having considered the facts of the case and the material placed on record it is apparent that the petitioner has disclosed truly and fully all material facts including the derivatives (future transactions) which are referred to in the reasons recorded in the books of accounts and after scrutinizing the same, the Assessing Officer has passed the order under section 143 (3) of the Act on 30.12.2017 assessing total income of Rs. 1,11,49,610/- for the Assessment Year 2015-16. 9. The Assessing Officer-respondent No. 1 has recorded the reasons on the basis of the information received with regard to reversal of trade in liquid stock as under: 2.1 During the investigation period, total 34 trades for 11,55,000 units were executed in the said contract wherein Deepak Natvarlal Pankhiyani HUF was party to 10 trades for total 9,95,000 units on March 10, 2015 while deaing in the said contract on March 10, 2015 Deepak Natvarlal Pankhiyani HUF at 12:23:55 hrs entered into buy trade for 4,97,500 units at pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... price difference. 2.5 In view of the aforementioned factual findings of the investigation, it was alleged that Deepak Natvarlal Pankhiyani HUF had indulged in execution of reversal trades in stock options with same counterparty on the same day which are non genunine in nature and have created false or misleading appearance of trading in terms of artificial volumes during the investigation period. 10. From the above reasons recorded by the Assessing Officer, it is clear that though the assessee has offered to tax the profit of Rs. 5,66,93,530/- in its return of income which was already assessed during the regular course of assessment, the petitioner has also filed additional affidavit placing on record the profit and loss account to demonstrate that the petitioner has already offered profit earned from the 09 transactions referred in the reasons recorded in the profit and loss account. 11. Therefore, it cannot be said that the income of the assessee to the tune of Rs. 5,66,96,530/- is not reflected and has escaped the assessment. It appears that the respondent No. 1-Assessing Officer without verification of the record has blindly relied upon the information received and picked up th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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