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Showing contexts for: nonexistent entity in Manish Daryani vs Central Board Of Direct Taxes on 18 August, 2023Matching Fragments
2.3 For the sake of convenience, facts are taken from W.P. No.8854 of 2023.
3. Learned counsel for rival parties are heard on the question of admission so also final disposal.
4. The brief facts giving rise to the present case are that the petitioner being a partnership firm was issued with a notice u/S.148A(b) of the IT Act on 03.03.2023 along with annexure detailing reasons for the Assessing Officer to come to an opinion that certain income pertaining to assessment year 2019-20 chargeable to tax has escaped assessment. The information supplied along with the said notice in brief was to the effect that based on the information received regarding GST Invoice Fraudsters, the case of proprietorship firm Shri Sanket Santosh Sahu (Prop. Of M/s Sanket Steel Enterprises) was inquired into disclosing that the said enterprise does not exist at the declared place of business. The information further disclosed that the said enterprise utilized fraudulent ITC based on the strength of fake tax invoices issued by nonexistent entity based in Chhattisgarh, thereby raising the necessary inference that these entities in Chhattisgarh are engaged in transaction only on paper. The information further disclosed that the books of account found in the enquiry against M/s Sanket Steel Enterprises that parties which claimed to have availed purchases from Shri Sanket Santosh Sahu have only indulged in availment of purchase invoices without any actual movement of goods thereby artificially inflating their purchase expenses and correspondingly reducing their taxable income. The petitioner partnership 5 WP-8854-2023 WP-8990-2023 firm was found to be one such party which claimed purchases from the said firm Shri Sanket Santosh Sahu with aggregated transaction valued at Rs.1,16,88,503/-. On the basis of this information, it was noticed to the petitioner that the expenses of Rs.1,17,05,331/- is liable to be disallowed and added back to income. Consequently, the notice u/S. 148A(b) of IT Act, noticed the petitioner to show cause as to why notice u/S.148 be not issued as per the aforesaid information.