M R Gupta Huf, Represented v. Income Tax Officer, Ward 6 (1), Jaipur, Having Office Atnew Central Revenue Building, Bhagwan Das Road, Jaipur

HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 9975/2023 M R Gupta Huf, Represented Through Its Karta Mani Ram GuptaS/o Late Raja Ram Gupta Aged About 72 Years Resident Of 13/12,Malviya Nagar, Jaipur - 302017, Rajasthan, India ----Petitioner Versus 1. Income Tax Officer, Ward 6 (1), Jaipur, Having Office AtNew Central Revenue Building, Bhagwan Das Road, Jaipur -302005, Rajasthan, IndiaNew Central Revenue Building, Bhagwan Das Road, Jaipur -302005, Rajasthan, India 2. Additional Director Of Income Tax (ADIT), InvestigationInv., Ajmer, Having Office At Aayakar Bhawan, Near BusStand, Jaipur Road, Ajmer - 305001, Rajasthan IndiaInv., Ajmer, Having Office At Aayakar Bhawan, Near BusStand, Jaipur Road, Ajmer - 305001, Rajasthan India 3. Central Board Of Direct Taxes (CBDT), Represented ThroughIts Chairman Having Office At Ministry Of Finance, NorthBlock, New Delhi - 110011, Delhi, IndiaIts Chairman Having Office At Ministry Of Finance, NorthBlock, New Delhi - 110011, Delhi, India ----Respondents For Petitioner(s) : Mr. Prateek Kedawat, Advocate with Mr. Prateek Barla, Advocate For Respondent(s): Mr. Sandeep Pathak, Advocate through VC with Mr. Arnav Singh, Advocatewith Mr. Arnav Singh, Advocate HON'BLE MR. JUSTICE MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE PRAVEER BHATNAGAR Judgment / Order 14/07/2023 Heard on admission. This petition under Article 226 of the Constitution of India is directedagainst the order dated 05.04.2023 issued under Section 148A(d) of theIncome Tax Act, 1961 (hereinafter referred to as the ‘Act of 1961’) as alsonotice dated 05.04.2023 issued under Section 148 of the Act of 1961 forthe Assessment Year 2016-17. Learned counsel for the petitioner argued that the assessment incase of the petitioner has been reopened on the basis of a third party information without having clinching material on record and even withoutallowing the petitioner to cross-examine the person concerned from whomsuch information was received and whose statement was recorded duringinvestigation forming the basis for opening assessment. He would alsosubmit that based on unverified and suspicious material without properinvestigations and inquiry, the power under Section 148A(d) of the Act of1961 has been exercised and re-assessment proceedings have beeninitiated. The correctness of the factual statements made in the impugnedorder have also been challenged. We find that a notice under Section 148A(b) of the Act of 1961 wasissued to the petitioner on 21.03.2023 by the Assessing Officer along withannexures disclosing information suggesting that income chargeable totax for the Assessment Year 2016-17 has escaped assessment. Thepetitioner was required to show cause as to why, in view of detailscontained in the enclosures, notice under Section 148 of the Act of 1961should not be issued. The annexure enclosed stated that as perinformation available on insight portal, assessee made financialtransactions (sale of shares) of Rs.91,95,300/- and received interest ofRs.6,12,999/- (2,53,355+3,59,644) on which TDS deducted under Section194-A of the Act of 1961 and rent transactions of Rs.3,45,350/- on whichTDS deducted under Section 194-I of the Act of 1961 during the financialyear 2015-16 relating to Assessment Year 2016-17. The descriptiondisclosed that sale of equity share (settled by the actual delivery ortransfer) in a recognized stock exchange amounting to Rs. 91,95,300/-,received interest of Rs.6,12,999/- (2,53,355+3,59,644) on which TDSdeducted under Section 194-A of the Act of 1961 and rent transactions ofRs.3,45,350/- on which TDS deducted under Section 194-I of the Act of1961 were disclosed. Referring to background, management, financial performance and balance sheet particulars of Sanasa Techfeb Limited, thenotice stated that the company has neither the meaningful tangible assetsnor any substantial investments and profit and loss account for the statedfinancial year shows miniscule profits. According to the Assessing Officer,the said details show that the manipulation were made by the clients andthe brokerage firms for personal gains. The company has neither paid anydividend to the share holders nor any bonus has been announced. Thetrade data of the said company was also called from the Bombay StockExchange and details were collected. The information was also disclosedby the ADIT (Investigation) Ajmer, wherein, it was stated that M/s. SanasaTechfeb Limited is a penny stock company, hence, the trading done andthe profit earned on the sale of the shares of this company were bogusand designed to camouflage undisclosed income of various personsincluding assessee as capital gain from sale of shares. The petitioner gave a reply, wherein, all the allegations were denied.According to the petitioner, it has not indulged in any bogus capital gainand raised issue that shares of Sanasa Techfeb Limited were listed on SMEPortal of BSE which is separate from BSE main Portal. The assesseedisputed the factual contents of the report prepared by ADIT(Investigation) Ajmer which was made basis to initiate proceedings underSection 148A(d) of the Act. The Assessing Officer vide order dated 05.04.2023 passed a detailedorder, after taking into consideration the reply filed by the petitioner toarrive at conclusion based on consideration of material on record that theassessee is one of those who purchased shares from Sanasa TechfebLimited and upon verification of the ITR filed by the assessee and perusalof computation it is revealed that assessee claimed exempt income ofRs.87,48,144/- under Long Term Capital Gain on which STT paid, hence, the entire transaction remained unexplained/unverified. On that basis,order was passed highlighting need to verify those transactions. Thisfollows issuance of notice under Section 148 of the Act of 1961. The assessee did not challenge the said order but chose to file itsreturn in response to notice under Section 148 of the Act of 1961. Duringthe pendency of the assessment proceedings, the assessee has filed thiswrit petition. Though, number of grounds have been urged by the assessee toassail the correctness of order dated 05.04.2023 under Section 148A(d) ofthe Act of 1961, we find that the order has been passed after giving dueopportunity of hearing to the petitioner. The order is detailed one. Itcontains examination of various facts, correctness of which have beendisputed by the petitioner. The correctness of those factual aspects cannotbe gone into in the writ petition. The petitioner has filed petition aftersubmitting return pursuant to notice under Section 148 of the Act of 1961.In the absence of there being any improprietory in the decision makingprocess and further taking into consideration that the petition was filedafter submitting return of income and during the pendency of theassessment proceedings and further that no addition has been made but itis a case of reopening of assessment and the assessee would have fullopportunity to satisfy the Assessing Officer against any addition, we arenot inclined to admit the petition. The petition is, therefore, dismissed. (PRAVEER BHATNAGAR),J (MANINDRA MOHAN SHRIVASTAVA),J