Facts of the Case

The petitioner, Puneet Kumar Bansal HUF, challenged the order dated 30.03.2023 passed under Section 148A(d) along with the consequential notice issued under Section 148 for Assessment Year 2019-20.

The reassessment proceedings were initiated on allegations that the petitioner had:

  • Generated bogus long-term capital gains through stock trading,
  • Used ante-dated contract notes, and
  • Conducted transactions through Karnam Securities Pvt. Ltd.

Additionally, the petitioner was treated as a “non-filer” by the Revenue authorities.

However, the petitioner contended that:

  • The income tax return had already been filed on 28.02.2020 and revised on 10.01.2021,
  • No supporting material was provided by the Assessing Officer for the allegations, and
  • Requests for accommodation and proper opportunity were ignored.

 Issues Involved

  1. Whether reassessment proceedings under Sections 148 and 148A(d) were valid when the assessee had already filed returns.
  2. Whether failure to provide material/information violates principles of natural justice.
  3. Whether passing an order without considering requests for accommodation and without granting proper hearing is legally sustainable.

 Petitioner’s Arguments

  • The petitioner denied allegations of bogus long-term capital gains.
  • It was argued that no incriminating material or information was supplied by the Assessing Officer.
  • The petitioner emphasized that returns had already been filed, contradicting the “non-filer” allegation.
  • It was further contended that requests for adjournment/accommodation were ignored, violating procedural fairness.

 Respondent’s Arguments

  • The Revenue relied on available records and allegations of bogus transactions.
  • It contended that reassessment was justified based on information indicating manipulation of capital gains and involvement of intermediaries.

 Court’s Findings / Order

The Delhi High Court held:

  • The Assessing Officer failed to take into account that the petitioner had already filed returns.
  • The reassessment order was passed without considering the petitioner’s requests for accommodation.
  • Principles of natural justice were not adhered to.

Final Order

  • The impugned order under Section 148A(d) and notice under Section 148 were set aside.
  • The matter was remanded for de novo consideration.
  • The Assessing Officer was directed to:
    • Provide relevant material/information to the petitioner,
    • Grant an opportunity of personal hearing, and
    • Proceed in accordance with law.

Important Clarification by Court

  • Reassessment proceedings must be based on complete and correct factual appreciation, including acknowledgment of filed returns.
  • Authorities must provide material relied upon before passing adverse orders.
  • Opportunity of hearing is mandatory, and ignoring adjournment requests vitiates proceedings.
  • Procedural safeguards under Section 148A are not mere formalities but substantive rights.

 Link to download the order -  https://delhihighcourt.nic.in/app/showFileJudgment/RAS25042023CW52532023_223633.pdf

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