The Assessing Officer (AO) failed to conduct relevant inquiries regarding the shares held as penny...

The Assessing Officer (AO) failed to conduct relevant inquiries regarding the shares held as penny stocks by the assessee in GCM Securities Ltd. The Principal Commissioner of Income Tax (PCIT) invoked Section 263, finding the assessment order erroneous and prejudicial to the Revenue's interests. The PCIT observed that the AO did not adequately verify the transactions involving GCM Securities Ltd. shares, which exhibited volatile price fluctuations. The PCIT relied on judicial precedents highlighting that abnormal price differences without corresponding changes in underlying security prices indicate manipulative objectives. Direct evidence of such manipulative activities is difficult to obtain. A holistic approach considering the preponderan..... .....

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