Reassessment Triggered by 175% Spike in Penny Stock Gains Allegedly Manipulating Capital Gains: Madras HC Quashes S. 148 Notice Issued Beyond Limitation

The Madras High Court has quashed a Section 148 income tax reassessment notice, ruling it was issued beyond the limitation period. The reassessment was triggered by a 175% spike in penny stock gains, alleging manipulation of capital gains. However, the court found that the notice, issued under the old regime, was time-barred. This decision provides relief to the assessee, emphasizing the strict adherence to statutory deadlines for issuing reassessment notices by tax authorities. It reinforces the principle that while tax evasion is serious, procedural compliance and limitation periods must be respected.