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TMI Blog2022 (10) TMI 550X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act') and notice issued under Section 148 of the Act, both dated 20th July, 2022, for the Assessment Year ('AY') 2014-15. 2. The petitioner, Assessee, was initially served with a notice dated 12th April, 2021, issued under the erstwhile Section 148 of the Act, without following the mandatory procedure of newly inserted Section 148A of the Act, which was introduced vide Finance Act, 2021. The said notice was challenged by the Assessee in W.P. (C) No. 9119 of 2021 and the said petition was allowed by common order and judgment dated 15th December, 2021 in Mon Mohan Kohli v. Assistant Commissioner of Income Tax, 2021 SSC OnLine Del 5250, wherein this Court quashed the said notice holding it to be null and void. 3. Thereafter, Supreme Court ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lly raised an objection that it had not been provided with any report or material to substantiate the allegation made in the SCN. With respect to the allegation of earning of fictitious Long Term Capital Gain ('LTCG'), the Assessee stated that it has never traded in any scrip rigged by Mr. Naresh Manakchand Jain during the relevant year nor the Assessee has any transaction with Mr. Naresh Manakchand Jain. 5. Learned counsel for the Petitioner states that the profit i.e. LTCG earned by the Assessee from sale of shares had been duly declared in his Return of Income. He states that the sale of shares was made through online portal of a recognized stock exchange and this transaction was duly recorded in the Assessee's books of accounts. He fur ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... h Manakchand Jain and his associates, who had been instrumental in manipulating the prices of several penny stocks scrips on the stock exchange including that of the scrip namely 'Nyssa Corporation Limited' was relied upon in the said proceedings. The Registry was directed to send the e-file of the said writ petition for the next date of hearing. 8. Today, learned counsel for respondent, has similarly relied upon the said report (a copy of which has been shown to this Court) along with a brief note about the case of Sh. Naresh Manakchand Jain which states a search and survey action was conducted on 19th March, 2019, on a syndicate of persons led by Sh. Naresh Manakchand Jain. The said note further states that it was discovered that Sh. Nar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... undertaken on the stock exchange. 10. We have perused the paper-book. The impugned order records that the AO, after perusing the reply filed by the Assessee, concluded that the Assessee has not provided any documentary evidence such as its Demat Account, Broker's note, etc along with his reply. The AO further observed that the transactions have not been reported in the Assessee's ITR and concluded that it appears that the Assessee does not wish to explain the details of the transactions undertaken in the relevant AY. The AO, therefore rejected the reply of the Assessee and passed its impugned order dated 20th July, 2022, under Section 148A(d) of the Act and consequently issued a notice dated 20th July, 2022, under Section 148 of the Act. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the AO has received investigation report. Therefore, no case for remand is made out. 14. The issue of limitation though raised in the reply to the SCN was not urged by the learned counsel for the petitioner. However, as noted above the initial reassessment notice has been construed as a notice under Section 148A(b) in terms of the judgment in Ashish Agarwal (supra) and therefore the proviso to Section 149 of the Act is not attracted in the facts of this case. 15. In view of the report of DDIT (Inv.) Unit-7(1) and 7(3) Mumbai, shared with the AO which suggests that the LTCG earned by the petitioner in AY 2014-15 was bogus and since, the said LTCG was claimed as exempt income, the AO at this stage, concluded that the said bogus LTCG ..... X X X X Extracts X X X X X X X X Extracts X X X X
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