Dismissed¶60

Sandeep Stocks Pvt. Ltd. v. Assistant Commissioner of Income Tax

Rajasthan HC7 Aug 2025CW/11782/2025

Case brief

AI extract

What is this about?

Section 148 Income Tax Act 1961; reassessment; objections to notice; bogus share loss transactions; bogus LTCG accommodation entries; escapement of income Rs.23,02,91,301; assessment year 2011-2012; GKN Driveshafts; SLP (C) No.10014/2025 dismissed, questions of law kept open; writ petition dismissed; D.B. Civil Writ Petition No. 11782/2025; Rajasthan HC Jaipur; Sandeep Stocks Pvt. Ltd.

What did the court decide?

None; writ petition dismissed with pending applications disposed of, leaving the petitioner-Company free, in terms of the Supreme Court's directions, to canvass all its arguments (including limitation) before the authority concerned ¶60

Sandeep Stocks Pvt. Ltd. Vs Assistant Commissioner of Income Tax — Income Tax | Rajasthan HC (2025)

What the court decided

AI extract

Outcome

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Issue for consideration

Whether the order dated 23.05.2025 disposing of the petitioner's objections to the notice under Section 148 of the Income Tax Act, 1961 warrants interference by this Court. +2 more

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Court's answer

The authorities committed no error in disposing of the original objections of 02.02.2017 and supplying therewith the material relied upon for arriving at satisfaction of escapement of income; the assessee cannot now contend that the details were provided to it only along with the order.

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Ratio / Principle

At the stage of consideration of objections to a Section 148 notice, the only aspect to be looked into is whether the income chargeable to tax has escaped assessment.

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Key takeaways

The impugned order dated 23.05.2025 does not warrant any interference by this Court.ratio¶51
In view of the Supreme Court's dismissal of SLP (C) No.10014/2025 while keeping all questions of law (including limitation) open, the Court finds no reason to interfere and leaves the petitioner-Company, in terms of the Supreme Court's directions, to canvass all its arguments before the authority concerned; the writ petition is dismissed and pending applications disposed of.ratio¶60

Detailed headnote1 paragraphs

Rajasthan High Court (DB, Jaipur) dismisses writ petition challenging the order dated 23.05.2025 disposing of the assessee's objections to a notice under Section 148 of the Income Tax Act, 1961 for assessment year 2011-2012, founded on alleged bogus share loss / bogus LTCG accommodation entries with claimed escapement of income of Rs.23,02,91,301/-. The Court's earlier judgment dated 12.02.2025 in S.B. Civil Writ Petition No.7463/2017 had set aside the objection-disposal order dated 17.02.2017 and remitted the matter for reconsideration in light of GKN Driveshafts (India) Ltd.; the Supreme Court thereafter dismissed the petitioner's SLP (C) No.10014/2025 keeping all questions of law, including limitation, open. Holding that at the objection stage the only aspect to be examined is whether income chargeable to tax has escaped assessment, and that the material relied upon for such satisfaction was supplied along with the disposal order, the Court declines interference and leaves the petitioner to urge all contentions before the assessing authority.

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[2025:RJ-JP:30642-DB]

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HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR

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D.B. Civil Writ Petition No. 11782/2025

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Sandeep Stocks Pvt. Ltd., having Its Registered Office At A-40 A, Bajaj Nagar, Opposite Gandhinagar Railway Station, Jaipur302015, Through Its Director Mr. Sandeep Sharma S/o Budhi Prakash Sharma, Aged About 45 Years, R/o Aa-5, Anita Colony, Bajaj Nagar, Jaipur-302015.

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----Petitioner

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Versus

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Assistant Commissioner Of Income Tax, Circle 6, Jaipur 2. Deputy Commissioner Of Income Tax, Central Circle-4, Jaipur.

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----Respondents

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For Petitioner(s)	: Mr. Sanjay Jhanwar, Sr. Adv. assisted
	by Mr. Rajat Sharma & Mr. Saksham
	Pandey,Adv.
For Respondent(s)	: Mr. SandeepPathak

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HON'BLE MR. JUSTICE SANJEEV PRAKASH SHARMA HON'BLE MR. JUSTICE SANJEET PUROHIT

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Order

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07/08/2025

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Present writ petition has been filed impugning the order dated 23.05.2025 passed by the respondents, whereby the objection notice under Section 148 of the Income Tax Act, 1961 (for short ‘Act of 1961’) has been disposed of.

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Brief facts need to be noted are that the petitioner is a Company engaged in the business of trading in shares and securities. It had filed return for assessment year 2011-2012 which was scrutinized under Section 143(2) of the Act of 1961. Notice under Section 148 of the Act of 1961 was served on the

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[2025:RJ-JP:30642-DB]

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[CW-11782/2025]

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(2 of 7)

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petitioner-Company upon disclosure of bogus share loss transaction and reasons were supplied to the assessee vide letter dated 26.09.2016 pointing out that the assessee was one of the beneficiaries who received bogus share, which was on the basis of their admittedly accommodation entries in the form of bogus LTCG. Upon recording of statement of such promoters/Directors under Section 132(4) of the Act and upon duly conducting survey/ search operations, it was found that the assessee was one of such beneficiaries and, therefore, a notice under Section 148 of the Act of 1961 providing the reasons was issued on 27.09.2016 of escapement of tax assessment worth income of Rs.23,02,91,301./-. Objections and reply to the notice were filed by the petitioner-Company wherein, after raising objections to maintainability of the assessment proceedings under Section 148 of the Act, to submit detailed reply, the documents may be provided.

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Based on such reply, the respondents passed an order disposing of the objections and rejected the same. It was also stated that so far as details of information with regard to survey and search are concerned, the same cannot be entertained at the said stage.

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Feeling aggrieved, petitioner-Company preferred S.B.Civil Writ Petition No.7463/2017- Sandeep Stocks Pvt. Ltd. Vs. Assistant Commissioner of Income Tax & Anr., which came to be decided on 12.02.2025 and this Court proceeded to set aside the order dated 17.02.2017 and remitted the matter back to the respondents to decide the objections in accordance with law after

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[2025:RJ-JP:30642-DB]

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[CW-11782/2025]

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(3 of 7)

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considering the law laid down by the Supreme Court in GKN

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Driveshafts (India) Ltd. Vs. Income Tax Officer and Ors.259 IRT Page 19 . Personal hearing was also directed to be given to the petitioner-Company in terms of the directions of the High Court in Sandeep Stocks Pvt. Ltd. ( supra ) dated 12.02.2025. The respondents proceeded to dispose of the objections raised on 02.02.2017 and also at the same time, provided the available material sought by the assessee. Having received the entire documents as demanded, the petitionerCompany with the purpose to delay the proceedings, has again preferred writ petition and submits that the Court intended the petitioner-Company to allow it to again make objection after receiving the documents. The petitioner submits that despite specific directions, the respondents have failed to produce any material evidence or recorded the material linking the petitionerCompany and there was no reason which was available or recorded for initiating re-assessment. The petitioner further submits that respondents were seeking to reopen the concluded assessment solely on the basis of third-party allegations and that no tangible nexus existed between the petitioner-Company and the purported entry operators.

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We have considered the submissions and find that the petitioner-Company has been avoiding the proceedings under Section 148 of the Act of 1961 initiated against it with reference to assessment year 2011-2012 on 26.09.2016. Section 148 of the of the Act of 1961 as it stood provided as under:-

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(4 of 7)

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[2025:RJ-JP:30642-DB]

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[CW-11782/2025]

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“148. Issue of notice where income has escaped assessment.- Before making the assessment, reassessment or recomputation under section 147, and subject to the provisions of section 148A, the Assessing Officer shall serve on the assessee a notice, along with a copy of the order passed, if required, under clause (d) of section 148A, requiring him to furnish within a period of three months from the end of the month in which such notice is issued, or such further period as may be allowed by the Assessing Officer on the basis of an application made in this regard by the assessee, a return of his income or the income of any other person in respect of which he is assessable under this Act during the previous year corresponding to the relevant assessment year, in the prescribed form and verified in the prescribed manner and setting forth such other particulars as may be prescribed; and the provisions of this Act shall, so far as may be, apply accordingly as if such return were a return required to be furnished under section 139:

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Provided that no notice under this section shall be issued unless there is information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment in the case of the assessee for the relevant assessment year and the Assessing Officer has obtained prior approval of the specified authority to issue such notice:

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Provided further that no such approval shall be required where the Assessing Officer, with the prior approval of the specified authority, has passed an order under clause (d) of section 148A to the effect that it is a fit case to issue a notice under this section:

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Provided also that any return of income, required to be furnished by an assessee under this section and furnished beyond the period allowed shall not be deemed to be a return under Section 139.

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Explanation 1 .—For the purposes of this section and section 148A, the information with the Assessing Officer which suggests that the income chargeable to tax has escaped assessment means,—

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(i) any information in the case of the assessee for the relevant assessment year in accordance with the risk management strategy formulated by the Board from time to time; or

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(5 of 7)

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[2025:RJ-JP:30642-DB]

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[CW-11782/2025]

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(ii) any audit objection to the effect that the assessment in the case of the assessee for the relevant assessment year has not been made in accordance with the provisions of this Act; or

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(iii) any information received under an agreement referred to in section 90 or section 90A of the Act; or

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(iv) any information made available to the Assessing Officer under the scheme notified under section 135A; or (v) any information which requires action in consequence of the order of a Tribunal or a Court; or

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Explanation 2 .—For the purposes of this section, where,—

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(i) a search is initiated under section 132 or books of account, other documents or any assets are requisitioned under section 132A, on or after the 1st day of April, 2021, in the case of the assessee; or

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(ii) a survey is conducted under section 133A, other than under sub-section (2A) of that section, on or after the 1st day of April, 2021, in the case of the assessee; or

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(iii) the Assessing Officer is satisfied, with the prior approval of the Principal Commissioner or Commissioner, that any money, bullion, jewellery or other valuable article or thing, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, belongs to the assessee; or

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(iv) the Assessing Officer is satisfied, with the prior approval of Principal Commissioner or Commissioner, that any books of account or documents, seized or requisitioned under section 132 or section 132A in case of any other person on or after the 1st day of April, 2021, pertains or pertain to, or any information contained therein, relate to, the assessee, the Assessing Officer shall be deemed to have information which suggests that the income chargeable to tax has escaped assessment in the case of the assessee [where] the search is initiated or books of account, other documents or any assets are requisitioned or survey is conducted in the case of the assessee or money, bullion, jewellery or other valuable article or thing or books of account or documents are seized or requisitioned in case of any other person.

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(6 of 7)

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[2025:RJ-JP:30642-DB]

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[CW-11782/2025]

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Explanation 3 .—For the purposes of this section, specified authority means the specified authority referred to in section 151.”

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Thus, the only aspect which is to be looked into at this stage is whether the income chargeable to tax has escaped assessment, since the objection of the petitioner-Company was that the material has not been found to it which was the basis of arriving to the satisfaction and the Court allowed to raise the said objection, the authorities cannot be said to find out any error in disposing of the original documents made by it on 02.02.2017 and also supplying it with the said disposal order, the material which was relied upon for the purposes of arriving to the satisfaction of the escapement of income of the assessee. The assessee, therefore, cannot be allowed to state now that the details have been provided to it only alongwith the order passed. The order, therefore, does not warrant any interference by this Court. It may be noticed that earlier judgment passed by this Court in Sandeep Stocks Pvt. Ltd. ( supra ) was challenged by the petitionerCompany before the Supreme Court in SLP (C) No.10014/2025 where the Supreme Court passed following order:-

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“1. Having heard the learned counsel appearing for the petitioner and having gone through the materials on record, we find no good ground to interfere with the impugned order passed by the High Court.

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The Special Leave Petition is, accordingly, dismissed.

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However, all questions of law are kept open to be canvassed before the authority concerned including the issue of limitation.

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Pending application(s), if any, stands disposed of.”

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In view thereof, we do not find any reason to interfere with the order passed by the respondents and leave the

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[CW-11782/2025]

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[2025:RJ-JP:30642-DB]

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(7 of 7)

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petitioner-Company in terms of the directions of the Supreme Court to canvass all its arguments before the authority concerned. 7. The writ petition is accordingly, dismissed. Pending applications, if any, also stand disposed of.

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(SANJEET PUROHIT),J (SANJEEV PRAKASH SHARMA),J

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NAVAL KISHOR /83

Sandeep Stocks Pvt. Ltd. v. Assistant Commissioner of Income Tax

Case brief

What is this about?

What did the court decide?

Sandeep Stocks Pvt. Ltd. v. Assistant Commissioner of Income Tax

Case brief

What is this about?

What did the court decide?

Why is it important?

What the court decided

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