SNT Derivative Broking Pvt. Ltd. vs. ITO

Parties Involved

Facts Summary

The assessee, SNT Derivative Broking Pvt. Ltd., filed its return of income for the assessment year 2015-16 on 17.09.2015, declaring a total loss of Rs. (- ) Rs.93,178/-. The Assessing Officer (AO) issued a notice under section 148 of the Income-tax Act, 1961 on 31.03.2021, calling the assessee to file a return of income. The assessee filed the return on 08.03.2022, which was after a long delay just before the time assessment was getting time barred. The AO observed that the assessee had deliberately delayed filing of return of income in response to the notice issued by the AO under section 148 of the 1961 Act. The AO observed that the assessee had entered into sham transactions with a view to reduce the taxable income by taking bogus currency derivatives losses. The AO held that the assessee had booked bogus derivatives currency profits amounting to Rs.29,52,250/-. The AO added back the entire loss to the income of the assessee as it was being sham transactions. The assessee filed an appeal before the Commissioner of Income Tax (Appeals) (CIT(A)), which was set aside, and the matter was directed to be made afresh by the AO. The assessee further filed an appeal before the Tribunal.…

Legal Issues

• 1. Whether the CIT(A) erred in law and on facts of the case, in setting aside the order for making a fresh assessment and in not quashing the assessment order, despite holding that the very foundation of the assessment order is not valid?
• 2. Whether the notice issued u/s.148, as well as, the corresponding reassessment order passed u/s.147 r.w.s 144 are bad in law?
• 3. Whether assessment framed without issuing notice u/s.143(2), is bad in law?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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