Delhi High Court - Orders
Amit Gupta vs Assistant Commissioner Of Income Tax ... on 4 September, 2023
Author: Rajiv Shakdher
Bench: Rajiv Shakdher
$~56
* IN THE HIGH COURT OF DELHI AT NEW DELHI
+ W.P.(C) 11709/2023
AMIT GUPTA ..... Petitioner
Through: Mr Abhimanyu Jhamba, Adv.
versus
ASSISTANT COMMISSIONER OF INCOME TAX
CIRCLE 34 1 & ANR. ..... Respondents
Through: Mr Sanjeev Menon, Standing
Counsel.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MR. JUSTICE GIRISH KATHPALIA
ORDER
% 04.09.2023 [Physical Hearing/Hybrid Hearing (as per request)] CM Appl.45680/2023
1. Allowed, subject to the petitioner filing legible copies of the annexures, at least (3) days before the next date of hearing. W.P.(C) 11709/2023 & CM Appl.45679/2023 [Application filed on behalf of the petitioner seeking interim relief]
2. This writ petition concerns Assessment Year (AY) 2018-19.
3. The petitioner, inter alia, seeks to challenge the order dated 07.04.2022 passed under section 148A(d) of the Income Tax Act, 1961 [in short, "Act"].
3.1 Besides this, a challenge is also laid to the consequential notice of even date, i.e., 07.04.2022 issued under Section 148 of the Act.
W.P.(C) 11709/2023 1/5This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 16:04:59
4. The principal allegation against the petitioner is that he had engaged in bogus sales and returned the money received against the said sales in cash to the purported buyer.
4.1 In this regard, three transactions were flagged by the Assessing Officer (AO) in the notice under section 148(A)(b) dated 23.03.22. The cumulative value that the AO pegged on the transactions was Rs.1,91,27,786/-.
5. The record also shows that the proceedings were triggered against the petitioner/assessee on account of a survey conducted qua the entities going by the name VKC Nuts Pvt. Ltd. [in short, "VKCPL]" and Arham Foods, a proprietorship concern of one Smt Veena Jain.
6. The petitioner/assessee filed a reply to the notice dated 23.03.2022 issued under Section 148A(b) of the Act, where he offered the following explanation:
"1. That we have sold goods worth to Rs.9088744/- inclusive GST to M/s VK Chander Shekher & Co. vide bill no. 19 dated 11.07.2017. The goods were sent through data jee freight carriers (Regd) vide GR No. 27552 Dt.11.07.2017 and Truck No. JK02AQ0941 Dt.11.07.2017 and copy of Toll tax of Lakhim Pur Border, Jammu is enclosed along with copy of GR and copy of Bill.
2. That we had sold goods worth of Rs.966849/- inclusive of GST to M/s A M Trading Co, 519, Katra Ishwar Bhawan, Khari Baoli, Delhi vide Bill No. 343 Dated: 21.06.2017. This firm is located near our shop in the same market.
3. That all the payments to these parties were made through banking channalles (sic) and copy of account is enclosed for your kind reference.W.P.(C) 11709/2023 2/5
This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 16:04:59
4. That we had not received any cash from M/s Big Wave Traders and we do not know this party. If the said party had paid nay cash to us then the same may be confronted to us."
7. The AO, while passing the impugned order dated 07.04.2022, after noticing the reply filed by the petitioner/assessee, in paragraph 5 of the said order, recorded the following reasons as to why the explanation given by the petitioner/assessee was not satisfactory:
"5. The Reply and explanations offered by the assessee in response to SCN u/s 148A(b) has been examined and considered u/s 148(1)(c) of the Income Tax Act and is not accepted on account of the following :-
1. The information received through Directorate of Investigation, Jammu pertain to enquiries and investigation carried out by Deputy Directorate of investigation-2, Jammu. This information fulfils the conditions of section 148.
2. The information on the basis of which proceeding were initiated and a show cause notice u/s 148A(a) has been issued is explicit and leaves no room for carrying out further enquiries prior to issue of the show cause notice under Section 148A(a).
3. M/s VKC Nuts Pvt. LTD. and M/s Arham Foods (Prop. Smt. Veena Jain), PANAAQPJ0824K, were involved in practice of receiving payment through banking channel in lieu of bogus purchase and paying the amount in cash which received through banking channels."
8. It is in this backdrop that the AO, as noticed above, concluded that income amounting to Rs. 1,91,27,786/- has escaped assessment. In sum, the allegation was that VKCPL and Arham Foods were in the business of recording bogus purchases and in that behalf, their modus operandi was that W.P.(C) 11709/2023 3/5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 16:04:59 to pay the money to entities like the petitioner/assessee via banking channels and receiving the same in cash.
9. Counsel for the petitioner/assessee says that no material has been provided to demonstrate that the petitioner/assessee had paid money to VKCPL and/or Arham Foods in cash.
9.1 It is the submission of the counsel for the petitioner/assessee that the sales are genuine and that out of three entities, the petitioner/assessee has entered into sales transactions with only two entities and the documents concerning the same have been furnished to the AO.
10. Counsel for the petitioner has not been able to give a satisfactory answer as to the delay in approaching the Court after the order dated 7.04.2022 was passed under Section 148(A)(d) of the Act.
11. That said, while we are inclined to issue notice, we do not intend to interdict the inquiry by the AO at this juncture.
12. Issue notice.
12.1 Mr Sanjeev Menon, learned senior standing counsel, accepts notice behalf of the respondent/revenue.
13. A counter-affidavit will be filed within eight (8) weeks. 13.1 Rejoinder thereto, if any, will be filed at least five (5) days before the next date of hearing.
14. The AO will have liberty to continue with the assessment proceeding. However, if an order is passed which is adverse to the interest of the petitioner/assessee, the same shall not be given effect to, till further directions of this Court.
W.P.(C) 11709/2023 4/5This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 16:04:59
15. We make is clear that before the AO proceeds further, he will furnish the material, if any, which is in his possession to demonstrate that the petitioner, inter alia, has repaid the sale consideration received by him in cash to VKCPL and Arham Foods.
16. List the matter on 20.02.2024.
17. Partis will act based on the digitally signed copy of the order.
RAJIV SHAKDHER, J GIRISH KATHPALIA, J SEPTEMBER 4, 2023/pmc Click here to check corrigendum, if any W.P.(C) 11709/2023 5/5 This is a digitally signed order.
The authenticity of the order can be re-verified from Delhi High Court Order Portal by scanning the QR code shown above. The Order is downloaded from the DHC Server on 16/09/2023 at 16:04:59