The Delhi Bench of High Court has set aside the order passed under Section 148A(d) of the Income Tax Act 1961 as this was passed without considering the reply of the assessee. The assessing officer was directed for de novo exercise in lieu of the above order.
This writ petition Was filed against order passed under Section 148A(b) of the Income Tax Act, 1961.The principal allegation levelled against the petitioner was, that it was a beneficiary of accommodation entries provided by, 2 Enterprises. The revenue also placed value for the accommodation entry provided by Enterprise
The petitioner, Majestic Handicraft Private Limited was in the business of exporting readymade garments, which were sourced locally. It was asserted by the petitioner, that it had not taken accommodation entries from the aforementioned entities. The petitioner’s case was that it had purchased readymade garments from the aforementioned entities, and exported the same.
Besides other documents, the petitioner had placed on record, the GSTR returns filed under the Goods and Services Tax Act, 2017 and other documents, which set out the inward supplies from its registered supplier. The impugned order passed under Section 148A(d) of the Act was not dealing with this aspect of the matter.
The Division Bench of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju set aside the order passed under Section 148A(d), and the consequential notice observing that, “What the AO is required to prima facie establish, is that the stand of the petitioner, which is that it had obtained supply of the readymade garments from the aforementioned entities was false. It appears that the AO has not done his due diligence on that behalf.”
The Bench also held that the AO would have liberty to carry out a de novo exercise.
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