THE HON’BLE SRI JUSTICE P.SAM KOSHY AND THE HON’BLE SRI JUSTICE NARSING RAO NANDIKONDA WRIT PETITION Nos.1194, 10020 and 10752 of 2023

COMMON ORDER:

(per the Hon’ble Sri Justice P.Sam Koshy)

Heard Mr. V.Aneesh, learned counsel for the petitioner, and Ms. J.Sunita, learned Junior Standing Counsel for the respondents.

2. The instant three writ petitions have been filed by the petitioner assailing three different orders passed by respondent No.3 under Section 148A(b) of the Income Tax Act, 1961 (briefly ‘the Act’ hereinafter) and the notice dated 31.07.2022 issued by respondent No.3 under Section 148 of the Act along with the subsequent notice dated 02.11.2022 passed by respondent No.4 proposing to complete the assessment under Section 144B of the Act and the subsequent notice issued, and also, challenging all consequential proceedings contending it to be violative of Article 14 and 19 of the Constitution of India and also Section

31 of the Insolvency and Bankruptcy Code, 2016.

3. The instant writ petitions pertain to the same assessee in respect of three different assessment years i.e. 2014-15, 2015-16 and 2016-17. Writ Petition No.1194 of 2023 is in respect of assessment year 2014-15, Writ Petition No.10020 of 2023 is in respect of assessment year 2015-16 and, Writ Petition No.10752 of 2023 is in respect of assessment year 2016-17.

4. So far as the assessment year 2014-15 is concerned, the petitioner was issued with a notice dated 29.06.2021, under Section 148 of the Act intimating the petitioner as regards the decision to propose assess and reassess of the income / loss for the assessment year 2014-15 pertaining to certain incomes chargeable to tax which has escaped assessment within the meaning of Section 147 of the Act. Meanwhile, after the decision of the Hon’ble Supreme Court in the case of Union of India and Others vs. Ashish Agarwal, (2023) 1 Supreme Court Cases 617, a fresh notice was issued on 18.05.2022 to the petitioner under Section 148 of the Act. The reason for issuance of the notice was that, certain manipulative reversal trades emerged from the trading data received under the project Falcon, wherein it was seen that the assessee has undertaken trades through its broker M/s. Expro Securities and, from the said data, it was reflected of the petitioner to have undertaken both sale as well as purchase trades from eight unique contracts and, on further scrutiny, it was also found that there were certain chief characteristics which were reflected from the said transactions like:

(i) Identical purchase and sale quantity

(ii) Huge variation in purchase price and sale price.

(iii) Trades carried out between same party and counter-party i.e. if a client A purchased X qty from a counter-party client B, then A sells X qty to B only.

(iv) Time gap between purchase and sale transactions few seconds and not more than an hour.

(v) Insignificant change in the price of the underlying scrip as compared to the change in buy rates and sell rates.

(vi) Trading separately in deep in-the-money options and deep out-of-the-

money options on individual stocks, which were thinly traded.

(vii) The trades by these loss-making entities, in many cases, contribute to

70% to 100% of total traded volume for the contracts on those days.”

5. Based on the aforesaid suspicious transactions, prima facie, the Income Tax authorities found the petitioner to be indulged in generating non-genuine transactions by reversing trading in currency derivatives on the BSE / USE during the previous year 2013-14 and believing the income chargeable to tax having escaped assessment, the notices were issued.

6. There is no dispute so far as the petitioner having not received the said notices. Moreover, it also goes to show that the petitioner in fact had responded to the said notices by giving a detailed reply on 18.06.2022 and, it is only thereafter, after a due consideration of his reply, the Income Tax authorities passed the order under Section 148A(d) of the Act on 31.07.2022.

7. S