PRINCIPAL COMMISSIONER OF INCOME TAX 13 KOLKATA vs. MANISH PARASRAMPURIA

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ITAT/283/2023HC CalcuttaWBCHCO005813202331 January 2024Bench: THE HON'BLE THE CHIEF JUSTICE T.S SIVAGNANAM,HON'BLE JUSTICE SUPRATIM BHATTACHARYA3 pages
AI SummaryDismissed

What did the High Court hold?

The High Court held that the reopening of the assessment under Section 148 of the Income Tax Act, 1961, was not justified. The Tribunal had examined the facts and found that the assessee had demonstrated that the income from the share transactions was already disclosed in the original return and was subjected to scrutiny assessment under Section 143(3). The taxes on this income were paid at the special rate under Section 111A. The Court agreed with the Tribunal's conclusion that the reopening amounted to a 'change of opinion' by the Assessing Officer, which cannot be a valid ground for reassessment. Consequently, the High Court found no substantial question of law arising for consideration and dismissed the appeal filed by the revenue.

What were the facts?

The appeal was filed by the Principal Commissioner of Income Tax, Kolkata (revenue) against an order dated February 23, 2023, passed by the Income Tax Appellate Tribunal (Tribunal) in ITA No.654/Kol/2022 for assessment year 2015-16. The revenue challenged the Tribunal's decision regarding the reopening of assessment under Section 148 of the Income Tax Act, 1961. The Tribunal had found that the assessee, Manish Parasrampuria, had already disclosed the share transactions in AMM Ltd & EML shares, which were considered during the original scrutiny assessment under Section 143(3). The assessee had also paid taxes at the special rate under Section 111A on this income.

What were the issues?

1. Whether the Learned Tribunal committed a substantial error in law by not considering that the reassessment was initiated based on information received from the Investigation Wing, Mumbai, pertaining to AMM Ltd & EML shares, which are identified as penny stocks? Assessee's contentions: The assessee argued that the share transactions in question were already reflected in the original return and were considered by the Assessing Officer during the scrutiny assessment under Section 143(3). Therefore, the reopening of the assessment constituted a 'change of opinion' and was not justified. Revenue's contentions: The revenue contended that the reassessment was justified because it was based on information received from the Investigation Wing regarding penny stocks, implying that the original assessment might have overlooked or not properly considered this information.

Which sections of the Income-tax Act were involved?

Section 260A,Section 148,Section 143(3),Section 111A

AI-generated summary — verify with the full judgment below

OD – 29 IN THE HIGH COURT AT CALCUTTA Special Jurisdiction [Income Tax] ORIGINAL SIDE ITAT/283/2023 IA NO: GA/2/2023

PRINCIPAL COMMISSIONER OF INCOME TAX 13 KOLKATA VS MANISH PARASRAMPURIA

BEFORE : THE HON’BLE CHIEF JUSTICE T.S. SIVAGNANAM

And THE HON’BLE JUSTICE SUPRATIM BHATTACHARYA Date : 31st January, 2024

Appearance : Mr.Tilak Mitra, Adv. Mr.Soumen Bhattacharjee, Adv. ...for the appellant.

Mr.Govind Jephalia, Adv. Mr.Rajshee Chatterjee, Adv. ...for the respondent.

The Court : This appeal filed by the revenue under Section 260A of the Income Tax Act, 1961 (the Act) is directed against the order dated 23rd February, 2023 passed by the Income Tax Appellate Tribunal, A-Bench, Kolkata (the Tribunal) in ITA No.654/Kol/2022 for the assessment year 2015-16. The revenue has raised the following substantial questions of law for consideration : “Whether the Learned Tribunal has committed substantial error in law in not considering that the reassessment has been done by the A.O. in view of the information received from investigation Wing, Mumbai pertaining to AMM Ltd & EML shares which is a Penny Stock?”

We have heard Mr. Tilak Mitra, learned senior standing counsel assisted by Mr. Soumen Bhattacharjee, learned senior standing counsel appearing for the appellant/revenue and Mr. Rajshee Chatterjee, learned counsel appearing for the respondent/assessee.

The short issue which falls for consideration in the instant case is whether the reopening of the assessment done by the assessing officer under Section 148 of the Act was justified. The learned Tribunal has examined the factual position and found that the assessee has demonstrated from materials placed on record that the income has already been applied in the original return subject to scrutiny assessment under Section 143(3) of the Act on which taxes at special rate under Section 111A of the Act have been paid. The learned counsel appearing for the respondent/assessee has produced the copy of the paper book filed before the Tribunal and we find that the share transaction in respect of the said company, namely, AMML was reflected in the original return and was considered by the assessing officer and the factual conclusion arrived at by the learned Tribunal stating that the reopening was change of opinion cannot be faulted. For the above reasons, we find no substantial question of law arises for consideration.

Hence, the appeal fails and the same is dismissed. The connected application stands closed.

(T.S. SIVAGNANAM)

(CHIEF JUSTICE)

(SUPRATIM BHATTACHARYA, J.) S.Das/

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