A.T. Invofin India Private Limited Vs DCIT (ITAT Delhi)
Reopening Beyond Four Years Without Alleging Assessee’s Failure Is Invalid: Delhi ITAT Quashes 148 Notice in Penny-Stock Case
Assessee, a NBFC managing investments & securities transactions, filed return declaring loss of Rs.2.98 crore. Assessment u/s 143(3) was completed on 25.03.2016. After lapse of four years, AO issued notice u/s 148 on 30.03.2021 based on Investigation Wing alleging fictitious losses in transactions of Stampede Capital Ltd. & Atlanta Infra & Finance Ltd. AO stated that assessee failed to disclose fully & truly all material facts, thereby invoking proviso to Sec.147.
Assessee contended that reopening was purely a change of opinion as complete details of share transactions—including ledger, contract notes, stock-in-trade inventory—were already furnished during original assessment. Tribunal examined the paper book and found that assessee had indeed disclosed entire LTCG/LTCL details during scrutiny, including contract notes & share movement. Tribunal further noted that reasons recorded by AO merely reproduced information from Investigation Wing without any independent application of mind to demonstrate how assessee failed to disclose material facts. Even the allegation of fictitious transactions was based on generalized assumptions, not on any omission in original assessment.
Tribunal observed that AO added both “loss” and “profit” figures in reasons without identifying whether it was LTCL or STCL, showing mechanical recording of reasons. As reopening was after four years, the statutory pre-condition—failure of assessee to disclose fully & truly—had to be clearly established, which AO failed to do. Revenue’s reliance on penny-stock case laws was held irrelevant because the issue before Tribunal was jurisdiction, not merits. Holding that proviso to Sec.147 was violated & AO proceeded without proper satisfaction, Tribunal annulled the assumption of jurisdiction, declared the entire reassessment invalid, and allowed the appeal in full.
