JUDGMENT : (PER : HONOURABLE MR. JUSTICE BHARGAV D. KARIA) 1. Heard learned advocate Mr.S.N.Divatia for the petitioner and learned Senior Standing Counsel Mr.Varun K.Patel for the respondent no.1. 2. Rule returnable forthwith. Learned Senior Standing Counsel Mr.Varun K.Patel waives service of notice of rule on behalf of respondents. 3. Learned Senior Standing Counsel Mr.Varun Patel has tendered the affidavits on behalf of the respondent no.2, pursuant to the order dated 24.07.2024, one of the affidavit is filed by the Additional Commissioner of Income Tax Range-2(1)- Ahmedabad and another is filed by the Additional Commissioner of Income Tax(Audit) Ahmedabad, who were holding the charge of Joint Commissioner of Income Tax, Range-2(1)-Ahmedabad at the relevant time. 4. Learned advocate Mr.Patel referring the to averments made in the aforesaid affidavits affirmed on 4th August, 2024, pointed out that both the Officers were under tremendous pressure due to faceless regime to be implemented from 01.04.2021 and therefore inadvertent mistake has been committed by granting sanction for reopening of the assessment for issuance of the notice dated 30.03.2021. 5. Considering such explanation, without going into the veracity of the same for according the sanction, this petition is disposed of on the facts and submissions made by the learned advocate for the petitioner on merits. 6. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice under Section 148 of the Income Tax Act, 1908 (for short ‘the Act’) dated 30.03.2021 for the Assessment Year 2017-18. 7. The reasons recorded for reopening of the Assessment are as under: “Issues as per reasons recorded for reopening As per the information received from the credible sources that a search action u/s.132 of the Income-tax Act, 1961 was carried on 05.02.2019 in the case of Kaushal Group. During the course of search action various incriminating documents were found and seized from the premises of Kaushal Group (Kaushal Limited). It is further worth to mention here that, on going through the information available in Insight Portal, it can be seen that, Investigation Wing, Ahmedabad during the investigation found that the Kaushal Group are managing and controlling multiple companies and concerns which are not carrying out any genuine business activity. It is further worth to mention here that, on going through the information available in Insight Portal, it can be seen that, Investigation Wing, Ahmedabad during the investigation found that the Kaushal Group are managing and controlling multiple companies and concerns which are not carrying out any genuine business activity. These concerns are involved into activity of providing accommodation entries of various kinds such as bogus Long Term Capital Gain/loss or Short Term Capital Gain/Loss, Unsecured Loans, Share Premium, Bogus Gains, Contrived Losses etc. On perusal of information so received from Investigation Wing, Ahmedabad, it is noticed that the assessee Shah Mohitbhai Somchand (HUF) (AADHS3845Q) is one of the beneficiaries who has availed/obtained accommodation entries to the tune of Rs.6,53,36,784/- from Kaushal Limited (AABCK7885P) under various head such as bogus Long Term Capital Gain/loss or Short Term Capital Gain/Loss, Unsecured Loans, Share Premium, Bogus Gains, Contrived Losses etc. who has controlled and managed by Kaushal Group of companies. Failure on the part of the assessee to disclose fully and truly all the material facts necessary for the assessment, the income of the assessee has escaped assessment to the tune of Rs.6,53,36,784/- for the AY 2017- 18 within the meaning of Section 147 of the Income-tax Act, 1961. I have, therefore, reason to believe that this is a fit case for reopening the assessment u/s. 147 of the Act and for issue of notice u/s. 148 of the Income-tax Act, 1961.” 8. It appears on perusal of the aforesaid reasons that the Assessing Officer has formed a reason to believe in view of the accommodation entries of Rs.6,53,36,784/- from Kaushal Limited under various heads such as Long Term Capital Gains/Loss or Short Term Capital Gains/Loss, Unsecured Loans, Share Premium, Bogus Gains, Contrived Losses etc. Thus the Assessing Officer was not sure as to on what basis and what type of accommodation entry was obtained by the petitioner. 9. Thus the Assessing Officer was not sure as to on what basis and what type of accommodation entry was obtained by the petitioner. 9. Learned advocate Mr.S.N.Divatia for the petitioner invited the attention of the Court to the Assessment Order dated 31.12.2019 passed under Section 143(3) of the Act for Assessment Year 2017-18 wherein, the Assessing Officer during the regular course of assessment has examined in detail, the Short Term Capital Gain/Loss, Long Term Capital Gain/Loss claimed by the assessee from the transaction with Kaushal Limited was considered in detail while making addition of Rs.6,40,19,689/- consisting of Short Term Capital Gains of Rs.4,91,74,232/- and Long Term Capital Gains of Rs.1,48,45,457/- was made in the total income of the petitioner as income from other sources. 10. It was pointed out that the Assessing Officer has observed as under for making the addition: “7. In view of the facts and circumstances discussed supra and circumstantial evidence available on record, it has been concluded that the share transactions in the scrip Kushal Tradelink Ltd. were sham transactions and aimed only to bring unaccounted money in the guise of capital gains and paperwork has been got up and done merely to give a colour of authenticity to the transaction and by creating a facade of legitimate transactions. Further, this stock has no financial value as such to reach to the level of Rs.304.75 in such a short span of time and the assessee. Reliance is placed on the decision of the Hon'ble Delhi High Court in the case of Suman Poddar V/s. ITO [TS-567-HC-2019 (DEL)] wherein Delhi High Court held as under: “Delhi HC dismisses assesseeindividual's appeal against ITAT-order rejecting claim of 'exempt' long term capital gains ('LTCG') arising on sale of 'penny stocks' during AY 2014-15, states that "The ITAT has extensively discussed the evidence and materials on the basis of which the Assessing Officer recorded his findings with regard to the genuineness of the transaction in question.......... No question of law, therefore arises in the present case and the consistent finding of fact returned against the Appellant are based on evidence on record." During subject AY, AO had found that the transaction pertaining to purchase of shares by the assessee of M's Smartchamps IT and Infra Ltd., which was merged with Mis Cressanda Solutions Ltd. (Company), to be a bogus transaction by holding that the company's share was a penny stock: Takes note of ITAT's observations holding that the LTCG booked by assessee were bogus & a major part of accommodation entries scheme on account of the following: (1) The assessee had failed to fumish evidences[as to financials, growth & operations of Company] regarding the sale of shares, except the copies of the contract notes, as against the overwhelming evidences collected by the Revenue regarding the operation of the entire affairs of the assessee, (2) The earnings @ 491% over a period of 5 months from the date of allotment was beyond human probability and defied business logic of any business enterprise dealing with share transactions etc.. (3) the net worth of company as also the brokers who co-ordinated the transactions were also unknown to the assessee; Lastly, observes that "Cressanda Solutions Ltd. was in fact identified by the Bombay Stock Exchange as a penny stock being used for obtaining bogus Long Term Capital Gain. NO evidence of actual sale except the contract notes issued by the share broker were produced by the assessee, takes note of ITAT's reliance on SC judgment in Sumati Dayal, coordinate bench on Udit Kalra & plethora of other rulings on facts.” Further, Supreme Court dismissed the appeal filed by the assessee in this case. Hence, the argument forwarded by the Delhi High Court on this issue is binding and squarely applicable to the facts of this case. 8. Therefore, the total amount of Rs.6,40,19,689/-(STCG Rs.4,91,74,232 + LTCG Rs.1,48,45,457) is added under the head income from other sources. As the assessee has deliberately and willfully concealed its unaccounted income, penalty under section 271AAC is initiated separately.” 11. On perusal of the above observation made by the Assessing Officer, it is clear that the during the course of the regular assessment, the Assessing Officer has considered the Short Term Capital Gain as well as Long Term Capital Gain claimed by the assessee from the script Kaushal Tradelink Limited. On perusal of the above observation made by the Assessing Officer, it is clear that the during the course of the regular assessment, the Assessing Officer has considered the Short Term Capital Gain as well as Long Term Capital Gain claimed by the assessee from the script Kaushal Tradelink Limited. Therefore the Assessing Officer has already considered the issue during the regular course of assessment and the impugned notice under Section 148 of the Act issued by the respondent no.1 for reopening of the assessment is nothing but based on the general information received from the investigation wing pertaining to the script Kaushal Limited. The reasons recorded also does not disclose as to the particular escapement of the income. Thus, the Assessing Officer has issued the impugned notice on the borrowed satisfaction without application of mind and the respondent no.2 has also granted the sanction mechanically under the pressure of work as explained in the aforesaid affidavits. 12. In view of the above, the impugned notice is issued only on the basis of the information which has already been considered for making addition during the regular course of assessment, could not have been issued if the respondent authorities would have perused the material available on record in form of the Assessment Order dated 31.12.2019 passed under Section 143(3) of the Act. The impugned notice, therefore cannot be sustained and therefore is accordingly quashed and set aside. The petition is accordingly allowed. Rule is made absolute to the aforesaid extent. No order as to cost.