HARIOM INGOTS Vs. PRINCIPAL COMMISSIONER

JUDGEMENT

(1.) Petitioner aggrieved by issuance of notice under Sec. 148 of the Income Tax Act, 1961 (in short 'IT. Act') has filed this writ petition seeking following relief :-

(2.) Mr. Mool Chand Jain, learned counsel for petitioner would submit that petitioner is a private limited company and engaged in the business of manufacturing and sales of M.S. Ingots and Re-Rolled Products. During Assessment Year 2014-15, petitioner's company had issued 25,000 shares in the name of Amarnath Agrawal and Smt. Ramadevi Agrawal at face value of Rs.100.00 per share. The sale of share has been disclosed in their return. After receiving notice under Sec. 142(1) of the IT. Act, petitioner has submitted details as required to be submitted by petitioner under notice. Petitioner vide letter dtd. 22/12/2016 had very clearly mentioned that due to losses suffered by Steel Industry and no buyers in the market, company was facing paucity of funds and therefore, shares have been allotted on its face value. After considering the reply to notice, final assessment order under Sec. 143(3) of the IT. Act has been passed. He contended that notice issued under Sec. 148 of the IT. Act is after lapse of 4 years and once petitioner has disclosed all the transactions, particularly, sale of share and also explained the authority the reason for transferring of share on the face value, which was accepted by Assessing Officer, there was no ground available for the respondents to issue notice under Sec. 148 of the IT. Act as there was no failure on the part of assessee to make return and disclosing all the material facts fully and truly. He further submits that notice issued under Sec. 148 of the IT. Act is also not sustainable because, the reason assigned for issuance of notice is transfer of shares, attracts provision of Sec. 56(2) (vii)(c)(ii) of the IT. Act. He contended that the provison relied for forming reason to belief is for the 'Individual and Hindu undivided Family'. Petitioner is a company. As there was no valid reason/ground for issuance of notice under Sec. 148 of the IT. Act, notice issued to the petitioner/company be quashed.

(3.) Per contra, Mr. Amit Chaudhari, learned counsel for respondents opposes the submissions of learned counsel for petitioner and would submit that notice under Sec. 148 of the IT. Act has been issued after following due procedure as provided under the IT. Act. In Annexure to notice, reason and ground for issuance of notice has been specifically mentioned. However, he does not dispute the submission of learned counsel for petitioner with respect to the provision under Sec. 56 of the IT. Act.