Show-cause notices based solely on Form 26AS and third-party information quashed where assessee's records were not examined.

Show-cause notice issued solely on third-party TDS/Form 26AS information without examination of the assessee's books is unsustainable; reliance on such material gave only a prima facie view and did not substitute record scrutiny, so the SCN held invalid and was quashed. Precedent of the tribunal, upheld by the High Court, directly covers the factual posture. No evidence of suppression or willful misstatement was found, therefore invocation of the extended limitation period was inappropriate. Consequentially the impugned order was set aside and the appeal allowed with such relief as warranted by law.

---

---

Issues: Whether the Show Cause Notice dated 20-12-2020 issued on the basis of third-party information (Form 26AS) and without examination of the assessee's records is maintainable and whether the extended period of limitation and enhanced penalties could be invoked.

Analysis: The appeal record shows the SCN was issued solely on information received from the Income Tax Department (Form 26AS) without examination of the appellant's books or other records. The Tribunal's earlier decisions (Sharma Fabricators & Erectors Pvt. Ltd. v. CCE, Allahabad) as upheld by the High Court hold that demands founded only on third-party tax records or presumptions, without auditing the assessee's accounts, are not sustainable. There is no material in the SCN or record indicating suppression of facts or willful misstatement by the appellant that would warrant invoking the extended period of limitation. Consequently, the statutory conditions for extended limitation and for increasing penalties are not satisfied on the record.

Conclusion: The Show Cause Notice dated 20-12-2020 is not maintainable; the extended period of limitation could not be invoked; and the impugned order upholding demand and penalties is set aside. The appeal is allowed with consequential reliefs as per law.

---