The Delhi High Court bench consisting of Justice Manmohan and Justice Manmeet Pritam Singh Arora held that petitioner should be provided adequate opportunity to put forth defence before initiating reassessment.
The Writ petition was filed by the petitioner under Section 226 of the Constitution of India. The petition was filed challenging the notice under Section 148 of the Income Tax Act, 1961 pursuant to an order passed under Section 148A(d) of the Act.
The Counsels for the petitioner, Amol Sinha, Ashvini, Abhinav Arya, and Rahul Kochar submitted that notice under Section 148A(b) of the Act for the Assessment Year 2018-19 stating that the Petitioner has claimed bogus Long Term Capital Gains (‘LTCG’) of Rs.1,23,21,875/- on purchase and sale in the shares of M/s Achal Investments Ltd. However, he points out that the next paragraph of the notice stated that the income chargeable to tax has escaped assessment for the Assessment Year 2015-16, making the notice self-contradictory. The Counsels further submitted that notice mentioned that the evidence pertaining to the said information had been enclosed but the same was not served upon the Petitioner and that the Petitioner has not claimed any LTCGs on the shares of M/s Achal Investments Ltd. during the Assessment Year 2018-19. The Counsels also stated that the LTCG on shares of M/s Achal Investments Ltd. pertains to the Assessment Year 2015-16 and the same has already been assessed under Section 143(3) of the Act by Assisstant Commissioner of Income Tax (ACIT)and thereafter, the assessee had opted for Vivad se Vishwas Act and that the petitioner had not only submitted his response, but also uploaded all the relevant documentary evidences.
The Tribunal observed that “the Petitioner has not been provided an adequate opportunity to put forward its defense/reply as the annexure accompanying the notice enumerating the reasons for initiating reassessment pertained to the Assessment Year 2015-16 and not 2018-19. It is pertinent to mention that the allegation mentioned in the 148A(b) and demand notice pertained to claim of bogus LTCG on purchase and sale of shares of Achal Investments Ltd.”
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