Ms Vija Y Steel Traders vs. The Assistant Commissioner Of Income Tax, Circle 7, Pune

Held

The Court held that the impugned order dated March 31, 2023, passed under Section 148A(d) of the Income Tax Act, 1961, was liable to be quashed and set aside. The Court found merit in the petitioner's submission that the AO rejected the reply on the ground of failing to submit documents that were never requested in the notice issued under Section 148A(b). The Court also noted that the allegation of KMPL indulging in non-genuine transactions was introduced for the first time in the impugned order, without sufficient basis despite the petitioner providing tax invoices, E-way bills, bank statements, and proof of GST payment. The Court reasoned that the AO needed to provide a clear justification for considering the transactions non-genuine, especially when the petitioner had submitted substantial documentary evidence. The matter was remanded for de novo consideration. The petitioner was directed to file the alleged missing documents within two weeks, and the AO was to dispose of the notice under Section 148A(b) within four weeks thereafter, after providing a personal hearing. The AO was specifically instructed to make out a case as to why the transactions would still be considered non-genuine despite the submitted evidence.

Facts

The petitioner, M/s. Vijay Steel Traders, filed its return of income for Assessment Year 2019-20 on October 30, 2019. Subsequently, the petitioner received a notice dated March 4, 2023, under Section 148A(b) of the Income Tax Act, 1961, alleging that income of Rs. 3,64,97,625/- had escaped assessment. A subsequent notice dated March 15, 2023, under Section 148A(b) was issued, admitting the earlier notice contained incorrect information. This new notice alleged the petitioner was a beneficiary of accommodation entries amounting to Rs. 27,50,000/- from M/s. Kusum Multitrade Pvt. Ltd. (KMPL). The petitioner replied on March 20, 2023, providing details of three transactions with KMPL, along with tax invoices and E-way bills. The Assessing Officer (AO) rejected this reply via an order dated March 31, 2023, under Section 148A(d), stating the petitioner failed to submit E-way bills, weigh bridge slips, etc. The petitioner challenged this order.

Key Issues

1. Whether the order passed under Section 148A(d) of the Income Tax Act, 1961, is valid, considering the alleged failure of the petitioner to submit certain documents not specifically requested in the notice under Section 148A(b)? Petitioner's Arguments: The petitioner argued that the AO rejected their reply and passed the order under Section 148A(d) on the grounds of non-submission of documents like E-way bills, weigh bridge slips, etc., which were never requested in the notice under Section 148A(b). The petitioner also contended that the allegation of KMPL indulging in non-genuine transactions and passing accommodation entries was raised for the first time in the impugned order. Furthermore, the petitioner asserted that they had submitted tax invoices, E-way bills, financial statements, ledger details, and bank statements showing payments through banking channels, and had paid the GST component. The petitioner claimed that the AO's conclusion of non-genuine transactions was made without adequate justification, despite the submitted evidence. Revenue's Arguments: The judgment does not record any specific arguments made by the Revenue in response to the petitioner's contentions regarding the validity of the order and the alleged non-submission of documents.