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Judgment
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER :
This captioned appeal has been filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-NFAC, Delhi [‘CIT(A)’ in short] dated 27.05.2024 arising from the assessment order dated 25.05.2023 passed by the Assessing Officer, New Delhi under Section 147 r.w.s 144B of the Income Tax Act, 1961 (‘the Act’) concerning Assessment Year (A.Y.) 2016-17.
The grounds raised by the assessee are as under :
1.“On the facts and in the circumstances of the case and in law, the order of learned lower authority is bad in law & against the facts and circumstances of the case and hence is unsustainable.
2.On the facts and in the circumstances of the case and in law, Ld. CIT(A), grossly erred in law in sustaining the addition of Rs.25,03,275/- being part of sale consideration of shares u/s 69A r.w.s 115BBE of the Act on account of alleged bogus transactions while said amount is either credited to book of accounts in the absence of any accounts nor source of said amount is under-doubt, hence addition is beyond the scope of provision.
3.Because, Ld. СIT(A), has erred in sustaining the rejection of claim u/s 10 (38) on sale of listed equity shares, sale/purchase of which is duly supported with all the possible evidences without rejecting/ finding any defect in evidences.
4.Because, Id. CIT(A) further failed to appreciate that, addition is based on surmises and conjectures being :
a. Reliance on behind the back statement for addition and reproduced In order is wrong in as much as none of party charged the transaction under question or assessee etc.
b. No Opportunity to cross the Statements reproduced is provided. ever
c. There is no evidence against the assessee except ref, to general modus 143(3) of the I.T, Act, 1961. The Assessee seeks leave to add to, modify, forego, or otherwise alter al or any of the grounds of appeal as above.”
Brief facts of the case are that assessee is an individual and has sources of income from remuneration as well as income from interest and he also doing investment and trading in shares or derivatives. Assessee had filed return of income for A.Y. 2016-17 on 30.07.2016 declaring taxable income of Rs.15,84,430/-.
The AO, subsequently, received information, collected during search on M/s Tradenext Securities Ltd on 25.02.2021 that the assessee had made a bogus claim of an amount of Rs.24,29,398/- as exempt as Long Term Capital Gain u/s 10(38) of the Act through investment in shares of IndusInd Bank during F.Y. 2015-16 relevant to 2016-17. The assessee was issued notice u/s 148 dated 29.06.2021 which was treated as show cause notice u/s 148A(b) in light of Ashish Agarwal case of Hon’ble Supreme Court. Assessee was issued show cause dated 02.06.2022 which was replied to by the assessee on 17.06.2022. Thereafter the AO passed an order u/s 148A(d) dated 29.07.2022 and issued a notice u/s 148 dated 30.07.2022. Not satisfied with the explanation of the assessee, the AO made an addition of Rs.25,03,275/- as bogus LTCG claimed as exempt u/s 10(38) of the Act. On appeal, the CIT(A) confirmed the said addition.
Aggrieved, assessee is before us.
At the outset, learned Counsel of the assessee challenged the validity of notice u/s 148 and stated that the AO had issued notice u/s 148 of the Act on 30.07.2022 which is time barred in the light of the decision of the hon’ble Supreme Court in the case of Rajeev Bansal.
Per contra the ld DR relied on the orders of the AO and the CIT(A).
We have heard the rival submissions and have perused the material on record. It is an admitted fact that the assessee was initially issued notice u/s 148 dated 29.06.2021 which in terms of TOLA and CBDT instruction, gives the surviving period of one day in terms of the decision of hon’ble Supreme Court in case of Rajeev Bansal. The assessee was issued a show cause notice u/s 148A(b) in light of Ashish Agarwal case of Hon’ble Supreme Court on 02.06.2022 which was replied to by the assessee on 17.06.2022. This leaves the surviving period of only one day, till 18.06.2022, for issuance of notice u/s 148 of the Act. We find that the AO passed an order u/s 148A(d) on 29.07.2022 and issued the notice u/s 148 on 30.07.2022. Thus, the AO has exceeded the surviving period for issuance of notice u/s 148 in accordance with the decision of Supreme Court in case of Rajeev Bansal. Accordingly, the notice u/s 148 of the Act is quashed being barred by limitation. Accordingly, the resultant reassessment order u/s 147 is also rendered unsustainable in the eyes of law.
In the result, appeal of the assessee ITA No. 4598/Del/2024 is allowed.