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2023 (10) TMI 207 - HC - Income TaxReopening of assessment u/s 147 - applicability of section 153C - entire exercise for reopening the assessment was based on the search that is said to have taken place in the premises of one Naresh Jain and his associates - petitioner would submit that once a search was conducted, all the proceedings u/s 148, 148A etc will have to be abated and therefore, a similar proceedings has to be taken even in the context of a person, who is said to have acted in consonance with the person, who was searched namely Naresh Jain and also submitted that the only option available to the Department was to issue a notice under Section 153C read with Section 158A HELD THAT:- A reading of Section 153A and 153C of the IT Act indicates that under the fourth proviso to Section 153A of the IT Act, all proceedings have abate once a machinery u/s 153A of the IT Act is invoked. A reading of Section 153 of the IT Act indicates that proviso to Section 153A of the IT Act is available for completing the assessment under Section 147 of the IT Act. Section 153C of the IT Act is only an enabling provision to issue a notice notwithstanding anything contained in Sections 139, 147, 148 etc of the IT Act. However, it does not preclude the Department from issuing notice for reopening the assessment under Section 148A(b) of the IT Act for the purpose of Section 148 of the IT Act to complete the assessment under Section 147 of the IT Act. Therefore, the argument that the notice was bad cannot be countenanced. As noticed that the petitioner has purchased the shares from M/s.Monotype India Private Limited as early as 30.03.2011. The impugned Assessment Order bears no discussion as to how the benefit of Section 10(38) of the IT Act could be denied to the petitioner by simply concluding that the petitioner was trading in penny stocks shares of M/s.Monotype India Private Limited, particularly, when the petitioner has taken a categorical stand that the shares were purchased by him from M/s.Monotype India Private Limited as early as 30.03.2011 and were sold during the Financial Year 2017-2018. (Assessment Year 2018-2019). This would require a proper consideration and discussion by the first respondent. Thus Assessment Order is set aside and the case is remitted back to the first respondent to pass a fresh order on merits.
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