The Delhi High Court directed a De novo adjudication against the notice under Section 148A(b) of the Income Tax Act, 1961 issued by the Assessing Officer (AO) without furnishing the relevant material or information against the alleged bogus purchases.
Based on the available records, the primary accusation against the petitioner is that they have benefited from an accommodation entry arranged by a person named Mr. Sanjay Jain.
The petitioner was accused of engaging in bogus purchases. The alleged value of these bogus purchases is set at Rs. 11,98,577/-. In relation to this matter, the petitioner received a notice dated 29.03.2023 under Section 148A(b) of the Income Tax Act.
The petitioner submitted a response on 04.04.2023 to the Assessing Officer (AO). However, the response was not based on the merits of the case but rather aimed to inform the AO that the essential information or materials forming the basis of the allegations against the petitioner had not been provided to them.
The bench observed that statements made by Mr. Sanjay Jain and found that the AO, without furnishing the relevant information/material, proceeded to pass the order dated 13.04.2023 under Section 148A(d) of the Income Tax Act.
Considering the circumstances, the bench decided that the most appropriate course of action would be to invalidate the challenged order dated 13.04.2023. Also instruct the Assessing Officer (AO) to conduct a fresh evaluation after providing the petitioner with the necessary information and documents.
The bench of Justice Rajiv Shakhder and Justice Girish Kathaplia granted liberty to AO to issue a new order, as mentioned earlier, after providing the petitioner with the relevant documents and information. Also stated that it was important to furnish these materials to the petitioner before further proceedings are conducted in the case within 2 weeks.
Additionally, the petitioner is required to submit a response within four (4) weeks of receiving the pertinent material/information. The petitioner and the Assessing Officer (AO) will address all the arguments raised by the petitioner in their response, including those related to the merits of the case and jurisdictional issues. As a result, the high court has disposed of the appeal.
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