The Delhi High Court set aside the assessment order under section 148 of the Income Tax Act, 1961 since the revenue failed to provide material information based on which allegation was levelled against the assessee.
Shukla Enterprises Private Limited, the petitioner challenged the order dated 29.07.2022 passed under Section 148A(d) of the Income Tax Actand consequential notice dated 30.07.2022 passed under Section 148 of the Income Tax Act, 1961 and to the show cause notice dated 25.05.2022 issued under Section 148 A(b) of the Income Tax Act.
The principal allegation against the petitioner is that it is one of the beneficiaries of accommodation entries provided by BKR Capital Pvt. Ltd. This entity, according to the respondents/revenue, is controlled by one, Bajrang Lal Periwal. It was alleged that the petitioner had received, in Financial Year (FY) 2016-2017 [Assessment Year (AY) 2017-2018], Rs.50,00,000/- as unsecured loans.
The petitioner argued that it had not taken a loan from BKR, as alleged, but had repaid Rs.50,00,000/- to the said entity and stated that, concededly, the entire set of documents was not furnished to the petitioner.
It is stated that at the relevant point in time, the stand taken was that since the material/information exceeded 5MB, it could not be uploaded on the ITBA portal and that it would be sent separately to the petitioner.
It was evident that the petitioner had not received the material/information based on which allegations have been levelled against the petitioner.
The Two judge bench comprising Justice Rajiv Shakdher and Justice Tara VitastaGanju set aside the impugned order dated 29.07.2022 and the notice issued under section 148 of the Income Tax Act.
The court further held that “before the AO proceeds further in the matter, he will furnish the entire material/information which is in his possession and that which finds mention in the CRID. In such an eventuality, i.e., if material/information is furnished, the AO will provide an opportunity for the petitioner to file a supplementary reply ”
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