AEGIS FINSTATE LLP V. ACIT, CIR 43(1), DELHI & ANR.

W.P.(C)/9316/2024

AI Insights

The case involves AEGIS FINSTATE LLP, the petitioner, who challenged the orders and notices issued under Sections 148A(d) and 148 of the Income Tax Act, 1961, respectively. These were related to the reassessment of certain financial transactions including the sale of equity shares, purchase of mutual fund units, and future derivatives. The petitioner had responded to earlier notices with detailed explanations and documents, which the AO failed to adequately address in the subsequent orders. The High Court found that the AO did not properly evaluate the petitioner's explanations or objections, leading to the decision to set aside the AO's orders and remand the case for a fresh assessment.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 746423 (HC-DELHI)
• Appeal Type: Others
• Pronouncement Date: 10-07-2024
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: PUNEET RAI; ASHVINI KUMAR; NIKHIL JAIN; RISHABH NANGIA
• Assessee Lawyers: RANO JAIN; VENKETESH CHAURASIA; MAYANK PATAWARI; SHAKSHI RUSTAGI
• Keywords: Capital Gains; Equity Shares; Income Tax; Mutual fund units; Reassessment; Future Derivatives
• Section: 148; 148A(b); 148A(d); 203AA

Judgement Text

"$~195 * IN THE HIGH COURT OF DELHI AT NEW DELHI + W.P.(C) 9316/2024 AEGIS FINSTATE LLP .....Petitioner Through: Ms. Rano Jain, Mr. Venketesh Chaurasia, Mr. Mayank Patawari, Ms. Shakshi Rustagi, Advocates. versus ACIT, CIR 43(1), DELHI & ANR. .....Respondents Through: Mr. Puneet Rai, SSC with Mr. Ashvini Kumar, Mr. Nikhil Jain and Mr. Rishabh Nangia, Advocates. CORAM: HON'BLE MR. JUSTICE YASHWANT VARMA HON'BLE MR. JUSTICE RAVINDER DUDEJA O R D E R % 10.07.2024 CM APPL. 38146/2024 (Ex) Allowed, subject to all just exceptions. This application stands disposed of. W.P.(C) 9316/2024 & CM APPL. 38145/2024 (for interim relief) 1. The writ petitioner is aggrieved by the issuance of the order under Section 148A(d) of the Income Tax Act, 1961 [“Act”] dated 10 April 2024 as also the notice under Section 148 of the Act of the same date. 2. We note that the Section 148A(b) notice had been issued on 22 February 2024 and in terms of which the petitioner was called upon to explain certain transactions undertaken in respect of sale of equity shares, purchase of mutual fund units and future derivatives. In response to the aforesaid notice, the petitioner submitted a copious This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/07/2024 at 12:23:49 reply which has been dutifully reproduced in the order under Section 148A(d) of the Act. Further an additional notice under Section 148A(b) was issued on 30 March 2024, to which the petitioner filed its reply on 06 April 2024. 3. However, while dealing with the objections which were so raised to the proposed reassessment, all that the Assessing Officer [“AO”] has chosen to observe is as follows:- “6. Remarks of the AO: The assessee in his reply has submitted ITR, Computation of Income, Balance Sheet, Profit and Loss account, trading and manufacturing account, bank statement of current accounts, trading account with Almondz Global Securities Limited, capital account of Mr. Anubhav Poddar; Bonds Account with Almondz Global Securities Limited, AlmondzFinanz Limited, ledger account of HSBC Income Fund, calculation sheet for capital gain on sale of bonds, HSBC Income Fund units, equity shares, profit on intra day transaction, payment of STT on shares sold and other details. Further, on perusal of the details/documents filed by the assesse, all the transactions are duly reflected in the Insight Portal, TDS Statement and annual Tax Statement under section 203AA of the Income Tax Act 1961/26AS and Taxpayer Annual summary, it is established beyond doubt as under: a. The assesse has shown both long term and short term capital gains. Short term capital gains was declared at Nil by the assessee as per the ITR and replies submitted but the sale is with respect to sale of bonds for which no details have been submitted this was sold at 23,06,00,555. This needs to be verified during assessment proceedings. Long Term Capital Gain on sale of shares through stock exchange on which STT has been paid of Rs. 23,66,94,598/- (i.e.Sale Consideration of Rs. 23,84,1 0,509/. Again this sale amount needs to be verified and requires assessment proceedings as exact units of shares sold and whether it is a long term capital gain or not needs to be verified and third party verifications need to be done.” 4. It is thus ex facie evident that the AO has clearly failed to either evaluate the explanation which was tendered by the petitioner or to deal with the objections which were voiced to the proposed reassessment. We were thus inclined to set aside the order enabling the AO to commence proceedings afresh from the stage of Section This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/07/2024 at 12:23:49 148A(b) of the Act bearing in consideration the reply of the petitioner which had been submitted. 5. In view of the aforesaid, Mr. Rai, learned counsel appearing for the respondents submitted that the course as suggested would subserve the ends of justice. 6. Accordingly and for the reasons aforenoted, we allow the instant writ petition and set aside the order under Section 148A(d) of the Act dated 10 April 2024 as well as the notice referrable to Section 148 dated 10 April 2024. The matter shall stand remitted to the AO who shall commence proceedings afresh from the stage of Section 148A(b) and proceed in the matter after taking into consideration the replies which had been submitted by the writ petitioner. 7. All rights and contentions of respective parties on merits are kept open. YASHWANT VARMA, J. RAVINDER DUDEJA, J. JULY 10, 2024/vp This is a digitally signed order. The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 18/07/2024 at 12:23:49 "