Suhel Khan vs. Assessment Unit

Facts

The petitioner, Suhel Khan, challenged an assessment order dated March 20, 2024, passed by the Assessment Unit, National Faceless Assessment Center, under Section 143(3) read with Section 144B of the Income Tax Act. The Assessing Officer treated purchases made by the petitioner as non-genuine due to a lack of documentation, deeming the purchases unproved. Consequently, the expenses for these purchases were added back to the petitioner's income. The petitioner argued that the vendors had filed GST returns for the relevant assessment year (2022-23) and sought an opportunity to produce invoices, e-way bills, and weighbridge bills to substantiate the genuineness of the purchases.

Held

The Court held that it would meet the ends of justice to permit the petitioner to demonstrate the genuineness of the purchases. The Court noted the petitioner's grievance regarding the addition of expenses to income and their submission that they possessed documents to prove the genuineness of purchases. Taking into account the memo and documents filed, the Court found it appropriate to provide an opportunity to the petitioner to participate in the assessment proceedings before the Assessing Officer and produce evidence to establish the genuineness of sales. The assessment order dated March 20, 2024, was set aside, and the matter was remitted to the stage post show cause notice. All contentions were kept open. The petitioner was granted liberty to produce documents to demonstrate the genuineness of sales.

Key Issues

1. Whether the assessment order dated March 20, 2024, passed under Section 143(3) read with Section 144B of the Income Tax Act, is liable to be quashed for treating purchases as non-genuine in the absence of sufficient documentation? Petitioner's contention: The petitioner argued that the assessment order should be set aside and an opportunity granted to substantiate the genuineness of purchases. They submitted screenshots demonstrating that the vendors had filed GST returns for the assessment year 2022-23 and expressed willingness to produce invoices, e-way bills, and weighbridge bills if given a chance. Revenue's contention: The revenue contended that such substantiation should have been done before the Assessing Officer or could be presented before the first appellate authority.