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TMI Blog2024 (12) TMI 1430X X X X Extracts X X X X X X X X Extracts X X X X ..... income has escaped the assessment on the presumption that the petitioner has been involved in creating the non-genuine profit which is already offered to tax in the return of income which is accepted in the regular course of assessment by passing the order u/s 143 (3) of the Act. AO has not considered the material on record to come to the conclusion that there is failure on the part of the petitioner to disclose truly and fully all material facts to have reason to believe for escapement of income. Therefore, on the basis of the information received from another agency on insight portal or from the SEBI report, there cannot be any reassessment proceedings unless the respondent, after considering such information/material received from other sources, consider the same with the material on record in the case of the petitioner assessee and thereafter, is required to form independent opinion that income has escaped assessment. Without forming such opinion solely and mechanically relying upon the information received from the other sources, the respondent-Assessing Officer could not have assumed the jurisdiction to reopen the assessment based on such information. This view is fortified b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... executed on the Bombay Stock Exchange. 4.2 After analysis of the information and report of the Security Exchange Board of India as well as the decision of the Hon ble Apex Court in case of SEBI vs. Rakhi Trading Private Limited delivered on 08.02.2018 in CA No. 1969 of 2011 , the Assessing Officer formed a reason to believe that there is escapement of income by the petitioner in generating non-genuine profit amounting to Rs. 6,35,02,700/-. 4.3 The petitioner in response to the notice, filed the same return of income and requested for the reasons recorded and thereafter, raised the objections vide letter dated 12.07.2021 against the reopening of the assessment contending that the respondent has no jurisdiction to reopen the assessment as the petitioner has disclosed fully and truly all material facts relevant for the assessment. 4.4 It was also pointed out that the petitioner has disclosed the profit earned in the F O and the derivatives transaction carried out during the relevant period and therefore, there is no question of escapement of any income. It was also contended that as the respondent-Assessing Officer has failed to form any independent opinion to come to the prima facie ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... therefore submitted that the impugned notice being without any jurisdiction, is liable to be quashed and set aside. 7. On the other hand, learned Senior Standing Counsel Mr. Varun Patel for the respondent submitted that the respondent has recorded reasons on the basis of the information made available on the insight portal as well as on the basis of the SEBI report and the decision of the Hon ble Apex Court in case of SEBI vs. Rakhi Trading Private Limited (supra). 7.1 It was further submitted that on similar facts, this Court has not entertained the petition on the basis of the information made available under project Falcon. It was submitted that the profit earned by the petitioner has been prima facie considered as non-genuine by the respondent for coming to the prima facie conclusion that the income has escaped assessment as on the basis of the information made available on the insight portal, the petitioner has entered into non-genuine transaction of Rs. 6,35,02,700/- whereas the petitioner has offered profit of more than Rs. 3 Crore on currency derivatives and loss of more than Rs. 3 Crore on share transactions. It was further submitted that in similar facts, as held by the A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rlier. The said information/scheme of tax evasion could be unearthed only after receiving the information on INSIGHT PORTAL in MARCH 2021 i.e. well after the assessment proceedings have been finalized in the case of petitioner company. I have carefully considered the assessment records containing the submissions made by the petitioner in response to various notices issued during the assessment proceedings and have noted that the petitioner has not fully and truly disclosed the following material facts necessary for assessment for the year under consideration. It is evident from the above facts that the petitioner had not truly and fully disclosed material facts necessary for assessment for the year under consideration thereby necessitating reopening u/s. 147 of the Act. (iii) With reference to para 3.3, it is submitted that based on the analysis of trade data and comparing with chief characteristics of reversal trades, it is seen that the petitioner has indulged in generating non-genuine profit amounting to Rs.1,30,47,000/by trading in illiquid stock options on the BSE. In this case, specific information has been received on INSIGHT PORTAL and flagged as HIGH RISK category case by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the petitioner is not acceptable. Based on the analysis of trade data as present in this paragraph and comparing with chief characteristics of reversal trades as discussed above, it is seen that the petitioner has indulged in generating non-genuine profit amounting to Rs. 1,30,47,000/- by trading in illiquid stock options on the BSE. In this case, specific information has been received on INSIGHT PORTAL and flagged as HIGH RISK category case by Directorate of Systems. Moreover the underlying information is clearly outlining the systematic evasion of taxes by the petitioner . The facts as enumerated above have been found out on examination on the case records of the petitioner and are self explanatory. Therefore, no further enquiry is required in this case. On the basis of the same there are reasons to believe that the income chargeable to tax has escaped assessment. It can be reasonably concluded that there is failure on the part of petitioner to disclose fully and truly all necessary facts during the assessment proceedings. For aforesaid reasons, it is not a case of change of opinion by the AO. Further, as per credible information received from the investigation wing, the AO du ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pement of income. Therefore, on the basis of the information received from another agency on insight portal or from the SEBI report, there cannot be any reassessment proceedings unless the respondent, after considering such information/material received from other sources, consider the same with the material on record in the case of the petitioner assessee and thereafter, is required to form independent opinion that income has escaped assessment. Without forming such opinion solely and mechanically relying upon the information received from the other sources, the respondent-Assessing Officer could not have assumed the jurisdiction to reopen the assessment based on such information. This view is fortified by the decision of this Court in case of Harikishan Sunderlal Virmani vs. Deputy Commissioner of Income Tax reported in 394 ITR 146. 12. Considering the facts the case, we are of the opinion that the respondent-Assessing Officer could not have assumed the jurisdiction merely and solely relying upon the information made available on the insight portal without forming any independent opinion on the basis of the material on record vis-a-vis the petitioner is concerned. The petition th ..... X X X X Extracts X X X X X X X X Extracts X X X X
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