Court Orders New Assessment in Fraudulent ITC Claim Case; Original Order Set Aside for Failing to Address Objections.

The HC addressed a writ petition challenging an order under Section 148A(d) of the Income Tax Act, 1961, concerning alleged fraudulent ITC claims. The petitioner was accused of fictitious transactions worth Rs. 8,48,86,110 for AY 2018-19. The Court found the Assessing Officer failed to adequately consider the petitioner's objections and directed a de novo assessment. The impugned order and notice were set aside, requiring the Assessing Officer to provide information linking the petitioner to the entities and allowing a supplementary reply. An extension until 31.05.2023 was granted for a fresh order, without affecting the case's merits. The writ petition was disposed of accordingly.

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Issues:
Challenging order under Section 148A(d) of the Income Tax Act, 1961; Allegations of fraudulent Input Tax Credit (ITC) based on bogus transactions; Assessment Year 2018-19 transactions worth Rs. 8,48,86,110; Lack of information linking petitioner to entities in notice under Section 148A(b); Inadequate consideration of petitioner's reply by Assessing Officer; Direction for de novo assessment exercise and provision for supplementary reply; Extension of time for fresh order by Assessing Officer.

Analysis:
The High Court considered a writ petition challenging an order under Section 148A(d) of the Income Tax Act, 1961, alleging fraudulent Input Tax Credit (ITC) through bogus transactions. The respondent/revenue accused the petitioner of engaging in transactions totaling Rs. 8,48,86,110 with various entities during Assessment Year 2018-19. However, the petitioner denied these transactions, highlighting a lack of information linking them to the mentioned entities in the notice under Section 148A(b).

The Court noted that the Assessing Officer had not adequately considered the petitioner's objections before initiating reassessment proceedings based on information from the insight portal. Consequently, the Court directed a de novo assessment exercise, setting aside the impugned order and notice dated 31.03.2022. The Assessing Officer was instructed to provide necessary information linking the petitioner to the entities, allowing for a supplementary reply within two weeks.

Furthermore, the Court granted an extension until 31.05.2023 for the Assessing Officer to pass a fresh order, considering the de novo assessment. It was clarified that these directions would not impact the merits of the case. The writ petition was disposed of accordingly, with parties instructed to act based on the digitally signed copy of the order.

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