2023 (5) TMI 165

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....under Section 139 of the Act on 30.10.2018 declaring its income of Rs.42.44 crores along with tax audit report under Section 44AB of the Act and the assessment in terms of Section 115JB of the Act was completed by the assessing authority, who also made addition by ad hoc disallowance of certain expenses. 3. A notice under Section 148A(b) of the Act was issued on 10.03.2022 providing an opportunity of hearing against proposed re-opening of the assessment on receipt of information based on search and survey action under Section 132 and 133 of the Act conducted on M/s APCO Infratech Private Limited and other associates on 15.09.2021 by DDIT (Investigation) Unit-4(4) Mumbai. As the re-opening was without the authority of law, the petitioner submitted a detailed reply by stating that at the time when original assessment was carried out, all books of accounts, relevant documents, informations including the information relating to all transactions between the petitioner M/s Chetak Enterprises Limited and M/s. APCO Infratech Private Limited were disclosed and only after due consideration of the entire materials, assessment order was passed. 4. The submission of the learned senior cou....

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.... analysis of the statement of evidence gathered during the search, issue of circular transactions on which escapement/concealment of income or ineligible deductions/expenses claimed were notified for the assessment year 2018-2019. The order further shows that from the perusal of the GST returns that M/s. APCO Infratech Private Limited has entered into circular transactions with the petitioner M/s. Chetak Enterprises Limited in financial year 2017-2018 wherein bogus bills have been raised by M/s. APCO Intratech Private Limited on the petitioner M/s. Chetak Enterprises Limited and vice versa in order to artificially inflate turn over without executing any work. The competent authority further noticed that the petitioner M/s. Chetak Enterprise Limited had raised invoice of Rs.72 crores on M/s. APCO Infratech Private Limited on 31.03.2018, which in turn had raised invoice of almost identical amount i.e. Rs.75 crores on 31.03.2018. The giving of sub-contract to each other at the fag end of the year and that too, for almost same amount gave rise to suspicion that no actual work was actually being done and fictitious circular transactions may have been executed for the purpose of raising ....

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....ection 148A(d) has been passed. 11. The Supreme Court in the case of 'Raymond Woollen Mills Limited vs. Income Tax Officer, Centre XI, Range Bombay and others'(Civil Appeals No.1972 of 1992 with No.1973 of 1992. dated 17.12.1997), held that - "3. In this case, we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the asse....

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....of penalty and for obtaining relief in respect of any improper orders passed by the Revenue Authorities, and the assessee could not be permitted to abandon that machinery and to invoke the jurisdiction of the High Court under Article 226 of the Constitution when he had adequate remedy open to him by an appeal to the Commissioner of Income-tax (Appeals). 31. Having held so, it is not expedient for this Court to express its opinion on the rival submissions as it may unwittingly cause prejudice to either party. Suffice it to say that no case to quash the notice(s) issued under section 148 read with Section 147 of the Act or the order(s) rejecting the objections, is made out at this premature stage." 15. The Delhi High Court in W.P.(C) 5787/2022 titled as Gulmuhar Silk Pvt. Ltd. vs. Income Tax Officer Ward 10(3) Delhi, while considering the same question held that: "6. Though it is the petitioner's case that the impugned order is erroneous on facts, yet this Court is of the opinion that the petitioner would have ample opportunity during the course of proceedings before different statutory forums to show that the finding of fact arrived at was erroneous. Moreove....