TMI Blog2023 (11) TMI 42X X X X Extracts X X X X X X X X Extracts X X X X ..... Print Securities Ltd. at a face value of Rs. 10/-. It is these shares that the petitioner had sold and, thus, earned a long-term capital gain amounting to Rs. 94,85,882.78/-. Interestingly, in the reason to believe , there is no reference to the original assessment order dated 14.01.2015. Had the AO looked at the assessment order and the record concerning the petitioner s/assessee s case, the explanation given by the petitioner/assessee would have come to light. AO being unable to tie up the information received by him, with the alleged failure on the part of the petitioner to fully and truly disclose all material facts, attains criticality in the instant case. There is a non-application of mind by the AO. The AO appears to have solely proceeded based on the general information received by him. The AO, in a sense, has taken recourse to borrowed satisfaction. There is nothing in the reason to believe that would show how the AO has reached a figure of Rs. 1,04,38,000/-. The only clue concerning that figure is in the information that he had received from the Kolkata Division of the Investigation Directorate. Also noted AO verily believed, for some strange reason, t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rently, provided the names of penny stock companies listed on BSE and CSE that were used for providing accommodation entries. 4.3 The AO refers to nine (9) shell companies in the reason to believe . Among the nine shell companies, one such company went by the name Blue Print Securities Limited. 5. The AO, insofar as the petitioner/assessee is concerned, made the following assertions in the reasons to believe: From the [sic] based upon outcome of such investigation and analysis of the data, Sh. Shashi Mohan Garg was found and intimated to be one of the beneficiaries for booking capital gains through these Penny Stock, whose details are given below: Scrip Code Scrip Name Client Code Client Name PAN Trade value (Total Amount) Trade date 10012630 Blueprint Securities Ltd 5379 Shashi Mohan Garg AAEPG6256A 1,04,38,000 24.02.2012 27.02.2012 02.03.2012 06.03.2012 On invest ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... subsequent outcome of the preliminary enquiries conducted as above makes firm belief that Income (LTCG) of current year which has been claimed as exempt by Sh. Shashi Mohan Garg has escaped assessment during A.Y. 2012-13 as from the information received I have reason to believe that this LTCG has been earned from the managed transactions in manipulated stocks in CSE. 4. Income Chargeable to tax escaping assessment: Considering the above referred credible information, enquiries and investigation subsequent to the information, I have reason to believe that an amount at least of Rs. 1,04,38,000/- has escaped assessment in case of Sh. Shashi Mohan Garg for the A.Y. 2012-13 within the meaning of Section 147/148 of Income Tax Act, 1961. Moreover, as the case pertains to A.Y. 2012-13 i.e. a period within four years from the end of relevant assessment years at the time of issue of notice as per provisions contained in section 151(2) which reads as under: (1) No notice shall be issued under section 148 by an Assessing Officer, after year [sic four years], unless the Principal Chief Commissioner or Chief Commissioner or Principal Commissioner or Commissioner is satis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... see Annexure P-2] [in short, Form ], reveals that course correction was sought to be made. This is evidenced on the perusal of the response entered against Sr. 10 of the Form, which revealed that the relevant provision applicable to this case was Section 151(1) of the Act, and not, as mentioned by the AO in the reason to believe , Section 151(2) of the Act. 8.1 Furthermore, insofar as the reply framed against the query posed in Sr. No. 12 of the Form is concerned, it alluded to the fact that the case fell in a period beyond four (4) years and, therefore, sanction had to be obtained from the Principal Commissioner of Income. In this case, it is accepted by the respondents/revenue that notice under Section 148 of the Act was issued after four (4) years had elapsed since the end of relevant AY i.e., 2012-13. 9. Given this admitted position that is obtained in the matter, the provision captured in the first proviso to Section 147 of the Act [as the provision then stood] was applicable, which required the AO to suggest, at the very least, that income chargeable to tax had escaped assessment on account of the petitioner failing to disclose, fully and truly , all material facts r ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... THE INCOME TAX OFFICER Circle 5(1) New Delhi-110002 03/01/2014 Dear Madam/Sir, Reg: Shri. Shashi Mohan Prop M/S/ Deepak Industries 7, Eastern avenue, New Delhi-110065 PAN. No:- AAEPG6256A Assessment Year 2012-13 In continuation to our letter dated 18/12/2014, We under instructions of above said client have to submit to you as under: xxx xxx xxx DETAIL OF LONG TERM CAPITAL GAIN PARTICULARS DATE OF SALE NO. OF SHARE AMOUNT PURCHASE DATE NO. OF SHARE AMOUNT LTCG BLUE PRINTS SECURITIES LTD. 24/02/2012 27/02/2012 02/03/2012 06/03/2012 5100 14900 6000 6000 1562812.85 4565864.51 1838602.71 1838602.71 05/04/2010 32000 320000 32000 9805882.78 32000 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sition that income chargeable to tax which had escaped assessment [which he had tied to LTCG from sale of shares in Blue Print Securities] was Rs. 1,04,38,000/-. 14. There is nothing in the reason to believe that would show how the AO has reached a figure of Rs. 1,04,38,000/-. The only clue concerning that figure is in the information that he had received from the Kolkata Division of the Investigation Directorate. 15. Furthermore, as noted above, the AO verily believed, for some strange reason, that the petitioner s/assessee s case was the one which fell within four (4) years, which is why he had adverted to Section 151(2) rather than Section 151(1) of the Act. 16. Thus, for the foregoing reasons, we are of the view that the reassessment proceedings were triggered against the petitioner/assessee without due application of mind by the AO about the information received by him from the Kolkata Division of the Investigation Directorate. 17. We are, thus, inclined to allow the prayer made in the writ petition. Consequently, the impugned notice dated 28.03.2019 issued under Section 148 of the Act is quashed. 18. We may note that, although the petitioner has not made a sp ..... X X X X Extracts X X X X X X X X Extracts X X X X
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