Information /Material Which Triggers Assessment Proceeding Needs to be Furnished to Assesee: Delhi HC [Read Order]
Information – material – triggers – Assessment – proceeding – Delhi – HC – TAXSCAN
Information – material – triggers – Assessment – proceeding – Delhi – HC – TAXSCAN
The Delhi High Court has held that the underlying information or material that formed the basis for triggering the assessment or reassessment proceedings needs to be furnished to the assessee.
Charu Chains and Jewels Pvt ltd, the petitioner challenged the order dated 25.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 and the consequential notice under the Income Tax Act, 1961.
The Assessing Officer (AO) observed certain unsecured loan transactions entered into amongst three entities amounting to a cumulative sum of Rs.2.7 crores. Further viewed that these were accommodation entries.
Inspection/enquiry was conducted at two locations which revealed that the lenders were either not found at the given address or exhibited typical characteristics of entry-providing entities.
The bench comprising of Justice Rajiv Shakdher and Justice Tara Vitasta Ganju observed that the petitioner had indicated that it would file a further response once the aforementioned information/material is provided and that even if the information/material is not provided, it would reserve it the right to file a further response.
The respondent contended that it was a “partial” reply and that taking into account the assertions raised therein, the AO via communication dated 16.06.2022 granted further time to the petitioner to submit a final response.
Further argued that the period of one month would commence only from 30.06.2022, being the end of the month i.e., the date on which the extended time to furnish the reply expired.
It was observed by the Court that since the reply of the petitionerwas partial, and the petitioner itself had indicated that even if no material is supplied, it will file a further response to the notice issued under Section 148A(b) of the Act, the one-month timeframe would kick in only from 30.06.2022.
The Court set aside the impugned order dated 25.07.2022 passed under Section 148A(d) of the Act and the consequential notice of even date i.e., 25.07.2022 issued under Section 148 of the Act.
To Read the full text of the Order CLICK HERE
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