The Assessing Officer must establish the jurisdictional requirement for reopening and cannot rely solely on information without verifying if the issue had been disclosed during the original assessment. Reassessment proceedings deemed a 'change of opinion' and unsustainable.

JUDGMENT

Dhiraj Singh Thakur, J. - The petitioner challenges the notice under section 148 of the Income Tax Act, 1961 ('the Act') dated 31st Mach 2021 for the assessment year 2014-15 seeking to reopen the assessment for the said year on the ground that the Assessing Offcer had reasons to believe that income chargeable to tax for the assessment year 2014-15 had escaped assessment within the meaning of section 147 of the Act. The petitioner also challenges the order dated 8th February 2022 rejecting the objections of the petitioner to the validity of the notice under section 148 of the Act.

2. Briefy stated the material facts are as under :

2.1 The petitioner is stated to be engaged in the business of stock broking services as well as Undertaking Stock Trades (Pro-Trade) on BSE and NSE in derivative and cash segments which constitutes its business activity.

2.2 It is stated that the resultant Proft/Loss arising from such Pro-trade activity of the petitioner is offered to tax as 'business income/loss' in its return of income. It is stated that delivery based transactions in the nature of purchase and sales of equity shares in the cash segment, as also the sales and purchase of shares on Intra-day basis undertaken on the stock exchanges and sale of futures and options undertaken on the derivative segments on BSE and NSE are subjected to Security Transaction Tax ('STT') which is levied and recovered by the exchanges on a daily basis.

2.3 Return of income was fled by the petitioner for the assessment year 2014-15 on 24th September 2014 declaring a total income of Rs.2,74,720/-. The case of the petitioner was selected for scrutiny assessment by issuing notice under section 143(2) of the Act, dated 28th August 2015.

2.4. By virtue of notice dated 7th July 2016 under section 142(1) of the Act, the petitioner was asked to give details of the business activity and fle the basic documents like computation of income, audit reports etc. which details, the petitioner claims were provided vide letter dated 22nd August 2016.

3. By virtue of notice under section 142(1) of the Act, dated 7th November 2016, the petitioner was asked to inter-alia fle the following details :

(i) Reconciliation of TDS claimed as per certifcates and the income offered in the proft and loss account.

(ii) Statement refecting separately, trading account of delivery based/non-delivery based share transactions and derivative transactions

(iii) Complete details of STT along with the return.

(iv) Details of the information received through AIR and the corresponding bank entries and sources/utilization thereof.

Vide communication dated 21st November 2016, the petitioner states that a response was fled giving the relevant details. Vide communication dated 2nd December 2016, details of STT and the reconciliation with the Annual Information Report (AIR) were submitted.

Finally, the Assessing Offcer passed the order of assessment on 28th December 2016 under section 143(3) accepting the income disclosed by the petitioner.

4. On 31st March 2021, notice under section 148 of the Act was issued by the Assessing Offcer seeking to reopen the assessment for the assessment year 2014-15 on the ground that the income had escaped assessment for the said year. Reasons were furnished to the petitioner, which read as under :

In this case, assessee has e-fled return on 24.09.2014 declaring total income at Rs. 274720/- and assessment u/s.143(3) was completed on 28.12.2016.

In this case, information is received with regard to the fact that assessment has entered into sale/purchase of equity share with or without actual delivery in recognized stock exchange, the details are under :