9911796707
TMI Blog2023 (8) TMI 634X X X X Extracts X X X X X X X X Extracts X X X X ..... oncerning AY 2010-11. 2. As per the grounds of appeal, the assessee has challenged the assumption of jurisdiction under Section 147 of the Act as well as confirming notional income of Rs. 41,48,008/- on account of client code modification. 3. We have heard the parties in length and perused the first appeal order and re-assessment order. The material referred and relied upon in the course of hearing has also been taken into consideration. 4. Since the assessee has raised the legal question of usurption of jurisdiction by the Assessing Officer to reopen the completed assessment under Section 143(3) of the Act in the instant case, it would be pertinent to deal with the aforesaid question at the outset as it goes to the root of the matter. T ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... come in this case was filed on 24.09.2010 declaring income of Rs. 2,89,349/-. The case was selected for scrutiny and assessed u/s. 143(3) at returned income of Rs. 2,89,349/-. 2. Subsequently, information was gathered by the Department which revealed that some share brokers are indulged in the activity of creating fictitious profits and loss by misusing the client code modification facility in F & O segment on National Stock Exchange (NSE) during March 2010. On investigation and analysis of client code modification (CCM) date and transactions pertaining to F.Y. 2009-10 obtained from the NSE by the Department, it has been established that certain brokers had misused client code modification facility and were indulged in transferring fictit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d material available on record, I have reason to believe that in this case income of Rs. 47,38,115/- which was chargeable to tax has escaped assessment year 2010-11 within the meaning of provisions of section 147 of the IT Act, 1961 and therefore the income of the assessee company for the A.Y. 2010-11 needs to be assessed / reassessed as per the provisions of section 147 of the IT Act, 1961. Accordingly, notice u/s. 148 of the Income Tax Act, 1961 is being issued in this case for AY 2010-11." 7. A bare perusal of the reasons recorded suggests that the Assessing Officer has propelled himself to reopen the completed assessment on the grounds of doubts on the correctness of losses claimed in the transactions carried on the platform of the N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re one cannot decipher the reasons based on any objective material or relevant which may give rise to believe towards escapement. There is no clarity on the nature of information received by the Assessing Officer. The Assessing Officer is expected to exercise jurisdiction under Section 147 of the Act with scrupulous care and based on material which are clear and beyond reasonable doubt. The reasons recorded in the instant case are in complete disarray. Mere reiteration of statutory language employed in Section 147 of the Act that the Assessing Officer has 'reason to believe' towards escapement of income is not, by itself, adequate. The instances of transactions resulting in loss/profit to the assessee on account of client code modification ..... X X X X Extracts X X X X X X X X Extracts X X X X
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