Calcutta HC Grants Stay on Reassessment Proceedings Beyond 6 Years for Stock Exchange Fraudulent Stock Reversals.

Court Name : Calcutta High Court

Parties : RPC Commercial LLP vs Assistant Commissioner of Income Tax & Ors

Decision Date : 15 June 2023

Judgement ref : WPA 491 of 2023

n the High Court at Calcutta

Circuit Bench at Jalpaiguri

Constitutional Writ Jurisdiction

Appellate Side

WPA 491 of 2023

RPC Commercial LLP

-versus-

Assistant Commissioner of Income Tax & Ors.

Mr. Himangshu Kr. Ray,Adv.

Mr. Arijit Ghosh,Adv.

...for the petitioner.

Mr. Sudipto Kr. Mazumdar,Adv.

Mr. Ajoy Kr. Singhania,Adv.

Mr. Saptak Sarkar,Adv.

...for Income Tax.

Affidavit of service filed by the

petitioner be kept with the record.

Counsel for the respective parties are

present. The petitioner has challenged the

notice dated 28th July, 2022 issued under

Section 148 (of Income Tax Act, 1961)

relating to the assessment year 2015-16, and

all subsequent proceedings based on the

impugned notice dated 28th July, 2022 under

Section 148 (of Income Tax Act, 1961),

mainly on the ground of jurisdiction of the

assessing officer in issuance of the impugned

notice under Section 148 (of Income Tax Act, 1961) being

barred by limitation under Section 149(1) (of Income Tax Act, 1961)

(a)/149(1)(b) of the Income Tax Act, 1961. In

the impugned order under Section 148(d) (of Income Tax Act, 1961) of

the Act, the assessing officer has tried to

justify the initiation of the proceeding by

relying on instruction of 01/22 dated 11th

May, 2022 issued by CBDT. Admittedly,

issuance of notice and initiation of

reassessment proceedings are beyond the

period of six years and, prima facie, it is

barred by limitation – both under old Act as

well as under new amendment provisions

relating to Section 149 (of Income Tax Act, 1961).

Learned Counsel for the State

vehemently opposed the interim order as

prayed for by the petitioner on the ground

that the limitation is not applicable in the

case of the petitioner and the assessment of

tax is the fraudulent reversal of the Stock

Exchange.

Considered the rival submissions of

the respective parties, this Court finds that

the matter is required to be heard on merit

only after exchange of affidavits and, as

such, this Court, prima facie, is of the view

that if, at this stage, no stay is granted, the

petitioner will be prejudiced. Accordingly, the

respondents are directed to file affidavit-in-

opposition within eight weeks from date;

reply thereto, if any, within three weeks

thereafter.

In the meantime, there will be no

further proceedings on the basis of the

impugned order dated 28th July, 2022, being

annexure P-4 of the writ petition till disposal

of the writ application.

Let the matter appear before the next

available Circuit Bench after completion of

the period of 11 weeks.

(Krishna Rao, J.)