The court affirmed the validity of reassessment proceedings under the Income Tax Act when there are reasonable grounds to believe that income has escaped assessment, while also emphasizing the significance of compliance with statutory requirements.

JUDGMENT :

1. All the four writ petitions challenging the initiation of respective reassessment proceedings are taken up for disposal by this common judgment and order.

2. For the purpose of deciding the writ petitions, this Court finds it relevant to take note of the brief facts in respect to the four writ petitions.

WP(C)/5437/2016

3. The Petitioner herein is an assessee under the Income Tax Act, 1961 (for short “the Act of 1961”) having Permanent Account Number. The Petitioner filed his return of income for the Assessment Year 2011-12 relevant to the Financial Year 2010-11 in Form No. ITR-4 on 21.09.2011 vide acknowledgement No. 287799831210911 disclosing total income chargeable to tax at Rs.14,30,000/-. In the return of the income so filed by the Petitioner, it is the case of the Petitioner that the Long Term Capital Gains which were exempted under Section 10(38) of the Act of 1961 were duly reflected. The Petitioner had stated in the writ petition that in the said return, the Petitioner duly incorporated the details of the Long Term Capital Gains earned by him from the sale of the shares at Rs.57,58,923/- on the basis that the sale price was Rs.60,41,458/- and the purchase price was Rs.2,82,535/-. In the month of March, 2013, as stated in the writ petition, a detailed scrutiny assessment was made in respect to the income of the Petitioner for the Assessment Year 2011-12 under the provisions of Sub-Section (3) of Section 143 of the Act of 1961.

4. On 30.03.2016, the Respondent No.1 i.e. the Assistant Commissioner of Income Tax, Circle Jorhat issued a notice to the Petitioner under Section 148 of the Act of 1961 stating inter alia that he had reasons to believe that the income of the Petitioner chargeable to tax for the Assessment Year 2011-12 had escaped assessment within the meaning of Section 147 of the Act of 1961 and therefore proposed to assess/reassess the income for the said Assessment Year. The Petitioner was asked to deliver to him within 30 days from the date of service of the notice, a return in the prescribed form of the Petitioner’s income for the said Assessment Year. The Petitioner submitted a reply to the Respondent No.1 vide a letter dated 11.04.2016 on 21.04.2016 stating inter alia that the return which was filed by the Petitioner on 21.09.2011 for the Assessment Year 2011-12 be treated as the return submitted in response to the notice under Section 148 of the Act of 1961. Thereupon, the Petitioner issued a communication dated 10.06.2016 to the Respondent No.1 to provide the Petitioner the reasons for issuance of the notice under Section 148 of the Act of 1961.

5. Pursuant to the communication dated 10.06.2016 issued by the Petitioner, the Respondent No.1 issued a certified copy of the reasons for issuance of the notice under Section 148 dated 30.03.2016 for the Assessment Year 2011-12. The certified copy of the said reasons for issuance of the notice under Section 148 was enclosed as Annexure-9 to the writ petition. This Court finds it relevant to reproduce the contents of the said Annexure-9 as the same has relevance to the issues involved herein.

“REASON FOR ISSUING NOTICE U/S 148

Girish Kumar Agarwalla

PAN –ABYPA2937M A.Y. – 2011-12

The assessee sold shares (penny stock as identified by SEBI and investigation wing, Kolkata) during the FY 2010-11 details given as under:

Amount transaction date Script Amount Brokers name with code-502

20.09.2010 Odyssey corporation Ltd. 963900 National/multi commodity

29.03.2011 Splash media works Ltd 229838 National/multi commodity

23.03.2011 Splash media works Ltd. 308284 National/multi commodity

22.03.2011 Splash media works Ltd. 214465 National/multi commodity

23.03.2011 Splash media works Ltd. 706000 National/multi commodity

23.03.2011 Splash media works Ltd. 529500 National/multi commodity

28.03.2011 Splash media works Ltd. 791200 National/multi commodity

But as per return filed for A.Y. 2011-12 relating to F.Y. 2010-11, no income/loss in respect to sale of shares has been disclo