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TMI Blog2024 (5) TMI 170X X X X Extracts X X X X X X X X Extracts X X X X ..... The factual background, prior to the impugned proceedings, would exhibit that a notice under Section 148 of the Act was issued to the petitioner on 31 March 2021 for the same AY. In response to the said notice, the petitioner filed her Income Tax Return ["ITR"] on 14 January 2022 declaring a total income of Rs.31,370/-. Subsequently, various notices were issued under Section 142(1) of the Act and the same were duly replied by the petitioner. 4. On 31 March 2022, an assessment order under Section 147 read with Section 144A(b) of the Act was passed by the National Faceless Assessment Centre, Delhi ["NFAC"], whereby, an addition of Rs.6,54,78,799/- was made to the income of the petitioner on account of alleged accommodation entry through penny stock of one Achal Investment Ltd. Being aggrieved by the said assessment order, the petitioner preferred an appeal before the Commissioner of Income Tax (Appeals) ["CIT(A)"], NFAC, which is pending for disposal till date. 5. Notwithstanding the aforesaid assessment order having already been passed, a show cause notice under Section 148A(b) of the Act was issued to the petitioner on 1 June 2022. The said notice was duly replied by the petitio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... cause notice under Section 148(A)(b) of the Act. According to him, the said notice has to be construed in the aforenoted terms irrespective of the stage of assessment proceedings following the issuance of notice. 10. He further contended that since the proceedings were to start afresh, the impugned notice under Section 148A(b) was accordingly issued on 1 June 2022 and the information relied upon by the respondents was provided to the petitioner. He also submitted that the impugned order under Section 148A(d) was passed after duly obtaining approval from the specified authority and thus, it does not suffer from any legal or procedural infirmity. With regard to the discrepancy in the alleged escaped amount mentioned in the impugned order and show cause notice, it was urged that the same was a typographical error and the income escaping assessment is Rs.6,54,78,799/- only. 11. We have heard the learned counsel appearing on behalf of the parties and perused the record. 12. The solitary grievance of the petitioner requires adjudication on the touchstone of the decision of the Supreme Court in the case of Ashish Agarwal (supra) i.e., whether the respondents, under the facts of the pre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... any splits its shares. In this way beneficiary gets many shares of the listed company. Listed company may further issue bonus shares to the beneficiary. After this price of shares are jacked up by convoluted transactions by a limited number of persons. When price of shares reach an optimum level, information is passed on to the beneficiaries to sell the shares. These shares sold by the beneficiary are actually purchased by pre-identified persons / companies. These pre-identified companies/persons are of two kinds-One, they are persons who are having huge profit during the year on which they do not want to pay tax. These persons purchase shares by cash which has been moved to them through many intermediaries from the first beneficiary. In this way the first beneficiary has converted his untaxed income into white income as LTCG is non-taxable if Securities Transaction Tax is paid on it. After this share prices are again decreased artificially though convoluted transactions by these intermediaries/brokers. Once, the share prices have decreased to an optimum level, information is passed on to Beneficiaries of second type who sell shares to suffer short term capital loss. This beneficia ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nts have issued notice under Section 148A(b) of the Act on the premise that the judgment in Ashish Agarwal (supra) requires all notices issued under Section 148 of the Act between the period commencing from 01 April 2021 and ending on 30 June 2021 to be treated as show cause notices referable to Section 148A(b) of the Act. However, the said notice fails to consider that the final order had already been passed in the reassessment proceedings qua the petitioner on the same alleged escapement of income. For the sake of clarity, the notice issued under Section 148A(b) of the Act is reproduced as under:- "Sir/ Madam/ M/s, Subject: Subsequent proceedings with reference to section 148A(b) in consequence to Hon'ble SC Order dated 04.05.2022 - Letter In reference to the above, Hon'ble Supreme Court vide its judgment dated 04.05.2022 (2022 SCC Online SC 543), in the case of Union of India Vs Ashish Agarwal has held the notice issued u/s 148 during the period beginning on 1st April 2021 and ending with 30th June 2021, to be a show cause notice u/s 148A(b) of the Income Tax Act 1961. 2. Hon'ble Supreme Court has held that these reassessment notices issued u/s 148 under the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s converted his un-taxed income into white income as LTCG is non-taxable if Securities Transaction Tax is paid on it. After this share prices are again decreased artificially though convoluted transactions by these intermediaries/brokers. Once, the share prices have decreased to an optimum level, information is passed on to Beneficiaries of second type who sell shares to suffer short term capital loss. This beneficiary then sets off the loss with profit earned thereby saving on the taxes." 4. In accordance with the aforesaid judgment you are required to furnish the reply regarding why reassessment u/s 147 of the Income Tax Act may not be made in your case. The reply may be furnished by 15.06.2022. You may submit your response in e-proceedings facility through your account in e-filing portal of the Income Tax Department." 17. Undisputedly, the respondents have proceeded to pass an order under Section 148(A)(d) of the Act premised on an identical ground of escapement of income as alleged in the original notice for reassessment issued on 31 March 2021. It is also not the case of the respondents that they had sought to recommence the concluded reassessment proceedings based on certa ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... fied from the Supreme Court providing in para 8 of the report that "The respective impugned Section 148 notices issued to the respective assessees shall be deemed to have been issued under section 148A of the Income Tax Act as substituted by Finance Act, 2021 and treated to be show cause notices in terms of Section 148A(b)." As would be manifest from the aforesaid extract, the emphasis clearly was on the notices which formed the subject matter of challenge before various High Courts' and the aim of the Supreme Court being to salvage the process of reassessment. This is further evident from the Supreme Court observing that the AO would thereafter proceed to pass orders referable to Section 148A(d). We consequently find ourselves unable to construe Ashish Agarwal as an edict which required completed assessments to be invalidated and reopened. Ashish Agarwal cannot possibly be read as mandating the hands of the clock being rewound and reversing final decisions which may have come to be rendered in the interregnum. 26. .......... At the cost of being repetitive we deem it appropriate to observe that the Ashish Agarwal judgment neither spoke of completed assessments nor did it embody ..... X X X X Extracts X X X X X X X X Extracts X X X X
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