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September 2024

Reassessment — New procedure — Notice — Reason to believe — Necessity of live link between belief and material available — Information from “insight” portal that assessee had transacted with mutual fund found to be involved in scam — No nexus between belief and material — AO not clear whether assessee had claimed loss or dividend in mutual fund — Non-application of mind — Notices and order set aside.

By Keshav Bhujle and Ritu Punjabi, Advocates
Reading Time 4 mins

Karan Maheshwari vs. ACIT

[2024] 465 ITR 232 (Bom)

A.Y.: 2016–17

Date of order: 8th March, 2024

Ss. 147, 148, 148A(b) and 148A(d) of the ITA 1961

42. Reassessment — New procedure — Notice — Reason to believe — Necessity of live link between belief and material available — Information from “insight” portal that assessee had transacted with mutual fund found to be involved in scam — No nexus between belief and material — AO not clear whether assessee had claimed loss or dividend in mutual fund — Non-application of mind — Notices and order set aside.

For the A.Y. 2016–17, the Assessing Officer issued an initial notice u/s. 148A(b), an order u/s. 148A(d) and notices u/s. 148 of the Income-tax Act, 1961, based on the information from the “insight” portal, that the assessee was a beneficiary of dividend income from a mutual fund alleged to have been involved in a scam.

On a writ petition contending that without providing any information as requested, the Department had proceeded to pass the order u/s. 148A(d) and the notices u/s. 148 for reopening the assessment u/s.

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