Appeal details
Counselvise Citation
[2020] 111 COUNSELVISE.COM (IT) 2607 (ITAT-KOLKATA)
Assessee PAN
Bench
Appeal Number
Duration Of Justice
7 month(s) 1 day(s)
Appellant
Respondent
Appeal Type
Income Tax Appeal
Pronouncement Date
18-03-2020
Appeal Filed By
Assessee
Order Result
Allowed
Bench Allotted
SMC
Next Hearing Date
06-02-2020
Assessment Year
2011-2012
Appeal Filed On
16-08-2019
Judgement Text
1 ITA NO. 1934/KOL/2019 A.Y 2011-12 RAVI CHOUDHARY (L/H OF LATE SUSHILA CHOUDHARI) IN THE INCOME TAX APPELLATE TRIBUNAL B-SMC BENCH : KOLKATA [BEFORE SHRI A. T. VARKEY, JM ] I.TA NO. 1934/KOL/2019 A.Y 2011-12 RAVI CHOUDHARY (L/H OF LATE SUSHILA CHOUDHARI) PAN: ADLPC9393E VS. I.T.O. (TDS), WARD 36(2), KOLKATA APPELLANT RESPONDENT DATE OF HEARING 06-02-2020 DATE OF PRONOUNCEMENT 18.03.2020 FOR THE APPELLANT SHRI SUSHIL KUMAR PRANSUKHA, FCA, LD.AR FOR THE RESPONDENT SHRI JAYANTA KHANNA, JCIT, LD.SR .DR ORDER THIS IS AN APPEAL PREFERRED BY THE ASSESSEE AGAINST THE ORDER OF LD. CIT (APPEALS) , 10, KOLKATA DATED 28-06-2019 FOR THE ASSESSMENT YEAR 2011-12. 2. AT THE OUTSET ITSELF, LEARNED COUNSEL FOR THE ASSESSEE POINTED OUT THAT IMPUGNED ORDER OF THE LD. CIT(A) IS BAD IN LAW SINCE THE NOT ICE U/S. 148 OF THE INCOME-TAX ACT, 1961 ( IN SHORT, HEREAFTER REFERRED TO THE ACT) W AS ISSUED ON A DEAD PERSON. TO BUTTRESS THIS ARGUMENT, LEARNED COUNSEL FOR THE ASS ESSEE DREW MY ATTENTION TO PAGE-1 OF THE P/B, WHICH IS A COPY OF NOTICE ISSUED U/S. 148 OF THE ACT UPON SMT. SUSHILA CHOUDHURI BY THE I.T.O., WARD 36(2), KOLKATA DATED 21-03-2018. IT WAS BROUGHT TO MY NOTICE BY THE LD. AR THAT SMT. SUSHILA CHOUDHURY EXPIRED ON 10-09-2012. IT WAS ALSO BROUGHT TO MY NOTICE THAT THE AO WAS INTIMATED ABOUT THE DEATH OF SMT. SUSHILA CHOUDHURI AND TO PROVE THIS FACT, THE LD. AR DREW OUR ATTENTION TO THE CORRESPONDENCE MADE BY THE INCOME-TAX DEPARTMENT TO THE ASSESSEE T O THE EFFECT THAT SHRI RAVI CHOUDHARY IS THE LEGAL HEIR OF SMT. SUSHILA CHOUDH ARI, WHO EXPIRED ON 10-09-2012. IT IS NOTED BY THE DEPARTMENT THAT SMT. SUSHILA CHO UDHARI HAD DEMISED ON 10-09- 2012. FURTHER, IT IS ALSO NOTED THAT SHRI RAVI CH OUDHARY INFORMED THE DEPARTMENT THAT HE WAS THE LEGAL HEIR OF THE DECEASED PERSON VIDE CORRESPONDENCE DATED AS EARLY AS 2 ITA NO. 1934/KOL/2019 A.Y 2011-12 RAVI CHOUDHARY (L/H OF LATE SUSHILA CHOUDHARI) JANUARY 09,2014. MOREOVER, IT IS NOTED THAT THE DES PITE THE ASSESSEE INFORMING THE DEPARTMENT AND THE DEPARTMENT HAVING ACKNOWLEDGED HIS REQUEST TO BE CONSIDERED AS LEGAL HEIR HAS BEEN APPROVED VIDE LETTER CORRESPON DENCE DT. JANUARY 09,2014, STILL NOTICE U/S. 148 OF THE ACT HAS BEEN ISSUED ON 21-03 -2018 PROPOSING TO RE-OPEN THE ASSESSMENT FOR THE AY 2011-12 IN THE NAME OF LATE. SUSHILA CHOUDHURY. SINCE NOTICE HAS BEEN ISSUED ADMITTEDLY ON A DEAD PERSON, DESPI TE THE DEPARTMENT COMING TO KNOW OF THIS FACT AS EARLY AS ON 09 JANUARY, 2014 ACCORD ING TO THE LD. AR, THE AOS ORDER TO RE-OPEN THE ASSESSMENT ON A DEAD PERSON IS BAD IN LAW. 3. PER CONTRA, LD. DR VEHEMENTLY OPPOSED TO THE CON TENTIONS OF THE LD. AR AND CONTENDED THAT ASSESSEE AS LEGAL HEIR HAS PARTICIPA TED IN THE ASSESSMENT PROCEEDINGS AND THEREFORE, THE ORDER CANNOT BE FAULTED WITH THE ISSUANCE OF NOTICE U/S. 148 OF THE ACT ON DECEASED PERSON. ACCORDING TO THE LD. DR, THE ASSESSEE/ LEGAL HEIR HAD FULLY PARTICIPATED IN THE ASSESSMENT PROCEEDINGS AND HAVI NG ALSO RESPONDED TO ALL OTHER PROCEEDINGS BEFORE THE AO. ACCORDING TO THE LD. DR , ON THIS TECHNICAL GROUND RE- ASSESSMENT ORDER OF THE AO CANNOT BE FAULTED. 4. IN HIS REJOINDER, THE LD.AR REFERRED TO THE CASE LAWS TO THE PUNE BENCH OF TRIBUNAL IN SMT. ARCHANA ASHOK DUKRE VS. ITO, LATUR , ITA NO. 2237/PUN/2016 DT. 15-11-2019, WHEREIN THE TRIBUNAL ON SIMILAR CASE HA S QUASHED THE INITIATION OF REOPENING ITSELF BY REFERRING THE DECISION OF HON BLE BOMBAY HIGH COURT IN RUPA SHYAMSUNDAR DHMATKAR VS. ACIT IN WRIT PETITION NO. 404 OF 2019 AND HONBLE SUPREME COURTS DECISION IN PCIT VS. MARUTI SUZUKI INDIA LTD REPORTED IN (2019) 416 ITR 613 (SC). THE LD. AR ALSO REFERRED TO THE R EASONS RECORDED BY THE AO FOR REOPENING U/S. 147 AS UNDER:- REASONS FOR REOPENING U/S 147 OF THE I.T ACT. 1961: 1. THE ASSESSEE IS AN INDIVIDUAL WHO FILED ITS RETU RN OF INCOME ELECTRONICALLY FOR THE RELEVANT ASSESSMENT YEAR ON 26.03.2012 DECL ARING TOTAL INCOME OF RS. 3,02,358/-. 2. INFORMATION WAS RECEIVED FROM THE PR. DIT (INV.) , KOLKATA VIDE HIS LETTER BEARING F. NO. 75A/2015-16/2733 DATED 21-09-2015 TH AT THE INVESTIGATION CARRIED OUT BY THE DIRECTORATE REVEALED THAT A VERY LARGE NUMBER OF PERSONS HAD TAKEN ENTRIES OF HUGE BOGUS LONG TERM CAPITAL GAIN IN AN ORGANIZED MANNER THROUGH SHARE TRANSACTIONS OF PENNY STOCK CO MPANIES LISTED WITH CALCUTTA STOCK EXCHANGE WITH THE INVOLVEMENT OF THE PROMOTERS OF THE PENNY STOCK COMPANIES, UNSCRUPULOUS BROKERS AND ENTRY OPE RATORS. THE LETTER IS 3 ITA NO. 1934/KOL/2019 A.Y 2011-12 RAVI CHOUDHARY (L/H OF LATE SUSHILA CHOUDHARI) ACCOMPANIED BY A CD WHICH CONTAINS INVESTIGATION RE PORT, TH~ DETAILS OF TRANSACTIONS AND OTHER RELATED INFORMATION. THE INVESTIGATION FOCUSED ON 9 PENNY STOCK COMPANIE S LISTED WITH CALCUTTA STOCK EXCHANGE. A CLOSE VIEW OF PRICE MOVEMENT OF T HESE 9 SCRIPS REVEALED THAT THERE WAS COMMON PATTERN IN THE TRADING OF ALL SUCH SCRIPS. AT FIRST THEIR PRICES START FROM A LOW RANGE, THEN IT RISES RAPIDL Y, STAYS THERE FOR A WHILE THEN IT , DECREASES MORE RAPIDLY. THE INVESTIGATION REVE ALED THAT VARIOUS PERSONS HAD SUBSCRIBED TO THE SHARES OF THESE PENNY STOCK C OMPANIES FOR THE PURPOSE OF CLAIMING LONG TERM CAPITAL GAIN TO BRING UNACCOU NTED MONEY INTO THEIR BOOKS WITHOUT PAYMENT OF TAX. AS PER THE MODUS OPER ANDI DISCUSSED IN THE INVESTIGATION REPORT, THOSE WHO WANTS TO BOOK BOGUS CAPITAL GAIN ARE ASKED TO BUY SHARES WHEN THE PRICE IS LOW AND SELL THE SHARE S AT A PRE-DETERMINED PARTICULAR DATE AND TIME TO AVAIL THE BOGUS ENTRY O F DESIRED CAPITAL GAIN. THE REPORT ALSO REVEALS THAT THESE TRANSACTIONS ARE ACC OMMODATED IN LIEU OF CASH OF EQUAL AMOUNT AND COMMISSION CHARGED OVER AND ABO VE AT CERTAIN FIXED PERCENTAGE FOR PROVIDING SUCH ACCOMMODATION ENTRY. INVESTIGATION CARRIED OUT BY THE DIRECTORATE OF INC OME TAX (INVESTIGATION), KOLKATA REVEALED THAT THE SHARE PRICE OF 'BLUEPRINT SECURITIES LTD.' IS ONE OF THOSE' PENNY STOCK COMPANIES LISTED WITH CA LCUTTA STOCK EXCHANGE (CSE) WAS ALSO ARTIFICIALLY RIGGED TO PROVIDE ENTR Y OF BOGUS LTCG. A LIST OF BENEFICIARIES HAD BEEN IDENTIFIED. AS PER THE INFOR MATION FURNISHED IN THE REPORT, THE ASSESSEE HAD TRANSACTED IN SHARES OF ' BLUEPRINT SECURITIES LTD.' AND SOLD SHARES OF 'BLUEPRINT SECURITIES LTD. ' INVOLVING TRADE VALUE AT RS. 3,05,800/- DURING A.Y. 2011-12 AND T HE SAID INFORMATION IS ALSO SUGGESTING LONG TERM CAPITAL GAIN (LTCG) BY THE ASS ESSEE ON SUCH SUM. 3. THOUGH, THE ASSESSEE HAD CLAIMED EXEMPT INCOME A S LONG TERM CAPITAL GAIN (LTCG) ON WHICH STT WAS PAID, THE TRANSACTIONS CANNOT BE CONSIDERED GENUINE MERELY FOR THE REASON THAT THEY WERE CARRIE D OUT ON THE EXCHANGE PLATFORM WITH THE INVOLVEMENT OF REGISTERED BROKER THROUGH BANKING CHANNEL IN A KNOWN SEQUENCE WITH NO APPARENT ABERRATIONS. VARI OUS JUDGMENTS HAVE ALSO HELD THAT THE MONEY CAME BY CHEQUE AND WAS PAID THR OUGH THE PROCESS OF BANKING TRANSACTIONS AS NOT BY ITSELF OF ANY CONSEQ UENCES. HOWEVER, AS DISCUSSED ABOVE THE SAID TRANSACTIONS ARE NEITHER V ERIFIABLE FROM THE DETAILS PROVIDED BY THE ASSESSEE NOR IT IS VERIFIABLE FROM THE RETURN OF INCOME. THE AO ALSO HAD NO SUCH INFORMATION BEFORE RECEIVING TH E SAID REPORT ALONG WITH THE DATA AS MENTIONED ABOVE FROM PR. DIT(INV.), KOLKATA . 4. ON ANALYZING THE INFORMATION SO RECEIVED FROM PD IT(INVESTIGATION), KOLKATA VIS-A-VIS RETURN FILED BY THE ASSESSEE ON 26.03.2012, I AM OF THE FIRM BELIEVE THAT THE ASSESSEE ON SALE OF SHARE OF BLUE PRINT SECURITIES LTD.' HAS PLOUGH BACKED HIS UNACCOUNTED MONEY OF RS. 3,05,800/- INTO THE REGULAR BOOKS OF ACCOUNT IN THE GARB OF LONG TERM CAPITAL GAIN (LTCG) ON WHICH NO TAX HAS BEEN PAID BY CLAIMING THE SAME AS EXEMPT U/S. 10(38) OF THE I.T. ACT 1961 THROUGH ACCOMMODATION ENTRY IN LIEU OF CASH. 5. IN VIEW OF THE ABOVE FACTS AND AFTER ANALYZING T HE INFORMATION AVAILABLE ON RECORD, I HAVE THE REASON TO BELIEVE THAT THE ASSES SEE HAD SUPPRESSED ITS 4 ITA NO. 1934/KOL/2019 A.Y 2011-12 RAVI CHOUDHARY (L/H OF LATE SUSHILA CHOUDHARI) INCOME BY USING THE DEVICE OF LTCG TREATING IT AS EXEMPTED TO THE TUNE OF RS. 3,05,800/- WHICH IS/ARE REPORTED AS BOGUS BY THE D IRECTORATE OF INVESTIGATION AND BY DOING THIS, THE ASSESSEE IS FOUND TO HAVE F AILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSME NT. THUS, INCOME TO THAT EXTENT OF RS. 3,05,800/- AS LTCG HAS ESCAPED ASSES SMENT IN TERMS OF SECTION 147 OF THE INCOME TAX ACT, 1961. 6. IT IS PERTINENT TO MENTION HERE THAT IN THIS CAS E THE ASSESSEE HAS FILED RETURN OF INCOME FOR THE YEAR UNDER CONSIDERATION BUT NO A SSESSMENT AS STIPULATED U/S 2( 40) OF THE ACT WAS MADE AND THE RETURN OF INCOME WAS ONLY PROCESSED U/S 143(1) OF THE ACT. IN VIEW OF THE ABOVE, PROVISIONS OF CLAUSE (B) OF EXPLANATION 2 TO SECTION 147 ARE APPLICABLE OF FACTS OF THIS CA SE AND THE ASSESSMENT YEAR UNDER CONSIDERATION IS DEEMED TO BE A CASE WHERE IN COME CHARGEABLE TO TAX HAS ESCAPED ASSESSMENT. 7. IN THIS CASE, SINCE MORE THAN FOUR YEARS HAVE LA PSED FROM THE END OF ASSESSMENT YEAR UNDER CONSIDERATION, A PROPOSAL IS PUT UP BEFORE L.D. PR. C.I.T.-12, KOLKATA THROUGH ADD C.I.T., RANGE-36, K OLKATA FOR GIVING NECESSARY SANCTION TO ISSUE NOTICE II]. 148 OF THE I.T. ACT, 1961 FOR THE A.Y. 2011-12 AS PER THE PROVISIONS U/S 151 OF THE I.T. A CT, 1961. FORM ITNS-10 ALONG WITH RELEVANT ENCLOSURES IS PUT UP BEFORE THE LD. PR. CIT-12, KOLKATA FOR KIND PERUSAL AND APPROVAL. 5. REFERRING TO THE ABOVE REASONS, THE LD. AR SUBMI TTED THAT THE AO HAVING RECEIVED AN INFORMATION FROM THE LD. PR. DIT (INV.) KOLKATA VIDE LETTER DT. 21-09-2015 HAS RECORDED THE REASONS AND ISSUED NOTICE DT. 21-0 3-2018 TO SMT. SUSHILA CHOUDHARI, WHO EXPIRED ON 10-09-2012. ACCORDING TO THE LD. AR A PERUSAL OF SAID REASONS AS RECORDED/MENTIONED HEREINABOVE, WOULD REVEAL THAT T HERE WAS AN INFORMATION THAT A VERY LARGE NUMBER OF PERSONS HAD TAKEN ENTRIES OF H UGE BOGUS LONG TERM CAPITAL GAIN (LTCG) IN AN ORGANISED MANNER THROUGH SHARE TRANSAC TIONS OF PENNY STOCK COMPANIES LISTED WITH CALCUTTA STOCK EXCHANGE WITH THE INVOLV EMENT OF THE PROMOTERS OF THE PENNY STOCK COMPANIES, UNSCRUPULOUS BROKERS AND ENT RY OPERATORS. THE INVESTIGATION FOCUSSED ON 9 PENNY STOCK COMPANIES LISTED WITH CAL CUTTA STOCK EXCHANGE. INVESTIGATION REVEALED THAT VARIOUS PERSONS HAD SU BSCRIBED TO THE SHARES OF THESE PENNY STOCK COMPANIES FOR THE PURPOSE OF CLAIMING LONG TERM CAPITAL GAIN TO BRING UNACCOUNTED MONEY INTO THEIR BOOKS WITHOUT PAYING O F TAX. ACCORDING TO THE AO AS INFORMATION FURNISHED IN THE REPORT OF DIT (INV.), KOLKATA, THAT ASSESSEE HAD TRANSACTED IN SHARES OF BLUEPRINT SECURITIES LTD AND SOLD SH ARES OF BLUEPRINT SECURITIES LTD INVOLVING TRADE VALUE AT RS. 3,05,8 00/- DURING AY 2011-12 AND 5 ITA NO. 1934/KOL/2019 A.Y 2011-12 RAVI CHOUDHARY (L/H OF LATE SUSHILA CHOUDHARI) THE ASSESSEE HAD LONG TERM CAPITAL GAIN (LTCG) ON S UCH SUM. AFTER NOTING DOWN GENERAL MODUS OPERANDI, THE AO CONCLUDES AS UNDER:- 4. ON ANALYZING THE INFORMATION SO RECEIVED FROM PD IT(INVESTIGATION), KOLKATA VIS-A-VIS RETURN FILED BY THE ASSESSEE ON 26.03.2012, I AM OF THE FIRM BELIEVE THAT THE ASSESSEE ON SALE OF SHARE OF BLUE PRINT SECURITIES LTD.' HAS PLOUGH BACKED HIS UNACCOUNTED MONEY OF RS. 3,05,800/- INTO THE REGULAR BOOKS OF ACCOUNT IN THE GARB OF LONG TERM CAPITAL GAIN (LTCG) ON WHICH NO TAX HAS BEEN PAID BY CLAIMING THE SAME AS EXEMPT U/S. 10(38) OF THE I.T. ACT 1961 THROUGH ACCOMMODATION ENTRY IN LIEU OF CASH. 5. IN VIEW OF THE ABOVE FACTS AND AFTER ANALYZING T HE INFORMATION AVAILABLE ON RECORD, I HAVE THE REASON TO BELIEVE THAT THE ASSES SEE HAD SUPPRESSED ITS INCOME BY USING THE DEVICE OF LTCG TREATING IT AS EXEMPTED TO THE TUNE OF RS. 3,05,800/- WHICH IS/ARE REPORTED AS BOGUS BY THE D IRECTORATE OF INVESTIGATION AND BY DOING THIS, THE ASSESSEE IS FOUND TO HAVE F AILED TO DISCLOSE FULLY AND TRULY ALL MATERIAL FACTS NECESSARY FOR ITS ASSESSME NT. THUS, INCOME TO THAT EXTENT OF RS. 3,05,800/- AS LTCG HAS ESCAPED ASSES SMENT IN TERMS OF SECTION 147 OF THE INCOME TAX ACT, 1961. 6. THEREFORE, THE LD. AR CONTENDED THAT THERE IS NO DETAILS OF THE ASSESSEE TRANSACTING WITH THESE SCRIPS OTHER THAN THE INFORM ATION THAT THE ASSESSEE HAD DEALT WITH SALE OF SHARES OF M/S. BLUEPRINT SECURITIES LT D. ACCORDING TO THE LD.AR, THE INFORMATION RECEIVED FROM THE INVESTIGATION WING OF THE INCOME-TAX DEPARTMENT CAN ONLY TRIGGER THE REASONS TO SUSPECT AND CANNOT BE EQUATED TO REASONS TO BELIEVE ESCAPEMENT OF INCOME WHICH IS THE JURISDICTIONAL CONDITION PRECEDENT F OR REOPENING THE ASSESSMENT. THEREFORE, ACCORDING TO THE LD.AR IN ANY EVENT NOTICE ISSUED U/S. 148 AGAINST A DEAD PERSON IS BAD IN LAW SINCE THE REASO NS RECORDED IS VAGUE AND SHOWS THAT IT WAS RECORDED WITHOUT APPLICATION OF MIND. SO AC CORDING TO LD AR THE AO LACKED JURISDICTION TO REOPEN THE ASSESSMENT OF ASSESSEE. THEREFORE, ACCORDING TO LD. AR THE INITIATION OF RE-OPENING IS BAD IN LAW. 7. AFTER HEARING OF BOTH THE PARTIES AND ON PERUSAL OF RECORD, I NOTE THAT THE AO HAS REOPENED THE ASSESSMENT ON THE DECEASED PERSON, LATE. SUSHILA CHOUDHARI, WHO EXPIRED ON 10-09-2012, WHICH FACT HAD BEEN INTIMATE D TO THE DEPARTMENT AND THE DEPARTMENT HAD RESPONDED TO SHRI RAVI CHOUDHARI AD DRESSED AS LEGAL HEIR OF LATE. SUSHILA CHOUDHARI, THEREBY ACKNOWLEDGED THAT SHRI R AVI CHOUDHARI IS THE LEGAL HEIR OF LATE SUSHILA CHOUDHARI . HOWEVER, IT IS NOTED T HAT AO ISSUED NOTICE DT. 21-03-2018 6 ITA NO. 1934/KOL/2019 A.Y 2011-12 RAVI CHOUDHARY (L/H OF LATE SUSHILA CHOUDHARI) ISSUED U/S. 148 OF THE ACT IN THE NAME OF SMT.SUSHI LA CHOUDHARI PROPOSING TO REOPEN THE ASSESSMENT FOR THE A.Y 2011-12 AND THEREAFTER M ADE ADDITIONS OF RS. 5,12,240/- U/S. 68 AND RS. 12,806/- U/S. 69C OF THE ACT, TOTAL LING TO RS.5,25,046/- VIDE ORDER PASSED U/S. 143(3) R.W.S 147 OF THE ACT DT. 11-12-2 018. THIS ACTION OF THE AO STANDS CONFIRMED BY THE LD. CIT(A) BY IMPUGNED ORDER. EVEN THOUGH IT IS NOTED THAT THE REASONS RECORDED BY THE AO ON 13-03-2018 FOR REOPEN ING OF ASSESSMENT SHOWS THAT THE AO RECEIVED INVESTIGATION REPORT FROM THE PR. DIT V IDE LETTER DT. 21-09-2015 ABOUT THE ASSESSEE HAVING SOLD SHARES TO BLUEPRINT SECURI TIES LTD AND HAD OBTAINED CAPITAL GAIN (LONG TERM) OF RS. 3,05,800/-, WHICH ACCORDING TO THE INVESTIGATION DEPARTMENT WAS A RIGGED TRANSACTION. BASED ON THIS INFORMATIO N, THE AO HAS REOPENED WITHOUT MAKING ANY PRELIMINARY ENQUIRY AND RECORDED THE REA SONS TO RE-OPEN. THE AO BEFORE RE-OPENING THE ASSESSMENT SHOULD HAVE SATISFIED TH E CONDITION PRECEDENT REQUIRED TO USURP JURISDICTION UNDER SECTION 147 OF THE ACT THA T IS HE HAS THE REQUISITE REASON TO BELIEVE ESCAPEMENT OF INCOME. IT HAS TO BE KEPT IN MIND THAT REASON TO BELIEVE POSTULATES A FOUNDATION BASED ON INFORMATION AND BE LIEF BASED ON REASON. EVEN IF THERE IS FOUNDATION BASED ON INFORMATION, THERE STILL MUS T BE REASON WARRANT HOLDING A BELIEF THAT INCOME CHARGEABLE TO TAX HAS ESCAPED INCOME. ACCORDING TO ME, A BARE READING OF THE REASONS RECORDED TO REOPEN REVEALS THAT THERE WAS NON APPLICATION OF MIND BEFORE REOPENING THE ASSESSMENT. BASED ON AN INFORMATION/ INVESTIGATION REPORT, THE AO HAS JUMPED INTO THE CONCLUSION THAT THE ASSESSEE IS INV OLVED IN THE ACTIVITIES OF PENNY STOCK RIGGING ETC. IT HAS TO BE KEPT IN MIND THAT INFOR MATION FROM THE INVESTIGATION WING(INCOME-TAX DEPARTMENT) CAN ONLY TRIGGER THE REASONS TO SUSPECT . THEN THE AO TO MAKE SOME PRELIMINARY INQUIRY AND COLLECT SOME MATE RIAL WHICH WOULD SUGGEST THE ESCAPEMENT OF INCOME. HOWEVER, THE AO BASED ONLY ON INVESTIGATION REPORT HAS RECORDED HIS SATISFACTION WITHOUT CONDUCTING PRELIM INARY INQUIRY, WHICH IS NOTHING BUT THE BORROWED SATISFACTION FROM THE REPORT OF INVEST IGATION WING. THE CONDITION PRECEDENT TO REOPEN AN ASSESSMENT THAT IS REASON TO BELIEVE SHOULD BE THAT OF THE AO NOT THAT OF THE INVESTIGATION WING, SO IN THE ABSEN CE OF THE CONDITION PRECEDENT TO REOPEN, THE AO LACKS JURISDICTION TO REOPEN THE ASS ESSMENT. MOREOVER, EVEN THOUGH THE DEPARTMENT WAS AWARE AS ON 09 JAN. 2014 ITSELF ABOU T THE DEMISE OF LATE SUSHILA CHOUDHARI, THE NOTICE ISSUED U/S. 148 IN THE NAME OF DECEASED PERSON IS ALSO BAD IN 7 ITA NO. 1934/KOL/2019 A.Y 2011-12 RAVI CHOUDHARY (L/H OF LATE SUSHILA CHOUDHARI) LAW. SO I FIND THAT REASON RECORDED BY AO DOES NOT SATISFY THE JURISDICTIONAL REQUIREMENT AS PER THE SETTLED LAW ON THE SUBJECT A ND THEREFORE AO LACKS JURISDICTION TO REOPEN AND THEREAFTER NOTICE U/S. 148 IS BAD IN LAW AND THEREFORE, THE SAME CANNOT BE SUSTAINED IN THE EYES OF LAW AND THEREFORE, THE SAM E IS HEREBY QUASHED. 8. IN THE RESULT, THE APPEAL OF ASSESSEE IS ALLOWE D. ORDER PRONOUNCED IN THE OPEN COURT ON 18 -03-2020 SD/- A.T. VARKE Y JUD ICIAL MEMBER D ATED 18 -03 -2020 *PP(SR.P.S.) COPY OF THE ORDER FORWARDED TO: 1. APPELLANT/ASSESSEE: RAVI CHOUDHARY (L/H OF LATE SUS HILA CHOUDHARI) C/O TAVI R. CHOUDHARY & CO. 7 TH FLOOR, ROOM NO. 25 FORTUNA TOWER, 23A, N.S ROAD, KOLKATA-700 001. 2 RESPONDENT/REVENUE: THE ITO , WARD 36(2), AAYKAR B HAWAN POORVA, 8 TH FL., 110 SHANTIPALLY, KOLKATA-107. 3. CIT, 4. CIT(A), KOLKATA. 5. DR, KOLKATA BENCHES, KOLKATA **PP/SPS TRUE COPY BY BY ORDER ASSISTANT REGISTRAR ITAT KOLKATA
