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TMI Blog2025 (1) TMI 766X X X X Extracts X X X X X X X X Extracts X X X X ..... et aside the impugned notice at "Annexure A" at to this petition. (b) Pending the admission, hearing and final disposal of this petition, to stay the implementation and operation of the notice at Annexure "A" to this petition and stay the further proceedings for the Assessment Year 2015-16. (c) any other and further relief deemed just and proper be granted in the interest of justice; (d) to provide for the cost of this petition. 3.1 The brief case of the facts are as under:- 3.2 The Petitioner, during the year under consideration, earned income from trading in shares, commodities, derivatives etc. The Petitioner had also entered into certain transactions in Futures & Options (hereinafter referred to as "F & O" for the sake of brevity) which resulted into profit of Rs. 59,19,328/- and such profit is duly reflected in the Profit & Loss account. Such transactions were carried out through the broker namely "(sic) Jhaveri Securities Ltd.". 3.3 Suddenly thereafter, the Respondent issued the impugned notice dated 30.03.2021 under section 148 of the Act seeking to reopen the case of the Petitioner for the year under consideration. 3.4 The Petitioner, in response to the impugned n ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the income remained unexplained. It is suppression of the facts on the part of the assessee. In this case more than Rs. 1,00,000/- is involved. It is suppression of the materials fact on the part of the assessee. 6. Basis of forming reason to believe and details of escapement of income:- Therefore, I have reason to believe that income of Rs. 1,10,20,650/- which is chargeable to tax has escaped assessment and is considered a fit case for initiation of proceedings under Section 147 of the Income Tax Act, 1961. 3.7. The Petitioner, vide letter dated 06.09.2021, raised her objections against the reopening. In view of the same, the Respondent was requested to drop the reassessment proceedings. 3.8 The Respondent, vide order dated 05.01.2022, disposed off such objections and, inter-alia, held that the reopening is justified. 4.1 Learned Senior Advocate Mr. Hemani submits that the reasons for reopening are absolutely vague and non-specific. No escapement of income chargeable to tax emanates from reasons for reopening and hence, the reopening is not justified. The jurisdictional requirement for reopening the case of an assessee is that the Assessing Officer concerned must have "rea ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contract. 5.3 He has further submitted that thus, based on the analysis of trade data and comparing with chief characteristics of reversal trades, the Assessing Officer is of the prima-facie belief that the petitioner has indulged in generating non-genuine profit amounting to Rs. 59,11,328/- by trading in illiquid stock options on the BSE during the year under consideration and such amount has escaped assessment on account of failure on part of the petitioner to disclose truly and fully all material facts necessary for assessment. 5.4 Learned Senior Standing Counsel Mr. Varun Patel for the respondent submitted that the contention of the petitioner that the profits are genuine are merely self serving, inasmuch as, there is coordinated and pre-meditated trading by brokers on behalf of their clients on the Bombay Stock Exchange by engaging in reversal trade in il-liquid stock options resulting in non-genuine business loss/gains to the beneficiary and since the petitioner is one of such beneficiary, their case must be dealt with during the course of reassessment proceedings, strictly on merits. 6. Having heard learned advocates appearing for the respective parties and on perusal of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any failure on the part of the petitioner: "(i) to make a return u/s. 139 or in response to the notice issued under sub-section (1) of section 142 or section 148; (ii) to disclose fully and truly all material facts necessary for his assessment for that Assessment Year" 10. It cannot be held that the department was justified in reopening the assessment for Assessment Year 2015-16, which, we may add, has been done mechanically without application of mind, in the absence of any tangible material. 11. It also appears from the reasons recorded that no verification of the material on record is made by the respondent and there is no independent opinion that any income has escaped assessment due to any failure on the part of the assessee in not disclosing fully and truly all material facts necessary for assessment. 12. Moreover, from the reasons recorded it appears that the initiation of reopening proceedings are on borrowed satisfaction as no independent opinion is formed and on bare perusal of the reasons recorded, it emerges that the Assessing Officer, considering the information received from the insight portal, has issued the impugned notice forming his reason to believe that ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rd, the reopening of assessment after 4 years period amounts to "change of opinion" only. Therefore the reopening of assessment invalid in law. Thus the finding arrived by the Ld. CIT (A) does not require any interference. Therefore the grounds raised by the Revenue is devoid of merits and the same is hereby dismissed.
10. In the result, the appeal filed by the Revenue is hereby dismissed."
16. In view of the foregoing reasons, this Court is of the opinion that the petitioner had disclosed in its return for the Assessment Year 2015-16 the particulars of the profits under the head of "future and options" which was subsequently accepted by the Department. Therefore, the notice for re-opening the assessment under the head of "derivatives" is based on change of opinion. The assessee cannot be said to have failed to have fully and truly disclosed all materials facts which would warrant the re-opening after a period of four years, anyways. Therefore, this petition succeeds and impugned notice issued under Section 148 of the Income Tax Act, 1961 dated 30th March, 2021 is hereby quashed and set aside. Rule is made absolute to the aforesaid extent. No order as to costs. X X X X Extracts X X X X X X X X Extracts X X X X
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