Deepak Natvarlal Pankhiyani (HUF) Vs ACIT (Gujarat High Court)
The petitioner, Deepak Natvarlal Pankhiyani (HUF), engaged in trading shares and securities, filed their original income tax return for the Assessment Year (AY) 2015-16 on September 21, 2015, declaring a total loss of ₹2,00,23,842. The case was selected for limited scrutiny by issuing a notice under Section 143(2) of the Income Tax Act, 1961, on September 20, 2016, focusing on “Derivative (Future) transactions.” The petitioner responded with detailed information regarding these transactions. After further scrutiny, the assessment under Section 143(3) was completed on December 30, 2017, determining an income of ₹1,11,49,610. The petitioner filed an application for rectification on January 24, 2018, and the order under Section 154 was passed on February 1, 2018, accepting the error and rectifying it.
Reopening of Assessment:
The petitioner filed an appeal challenging the assessment order, which was partially allowed on August 30, 2018. Subsequently, the respondent issued a notice under Section 148 on March 27, 2021, asking the petitioner to file a return of income for AY 2015-16. The petitioner complied and sought the reasons for reopening, which were provided on May 24, 2021. The petitioner then filed objections on July 22, 2021, challenging the validity of the notice under Section 148, which the respondent dismissed on January 10, 2022. This led the petitioner to file a writ petition under Article 226 of the Constitution of India, seeking to quash the notice dated March 27, 2021, and the order disposing of the objections.
