TaxTMI 
TaxTMI 
2025 (5) TMI 2155
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....lar information, which suggested the petitioner's income for AY 2020-21 had escaped assessment. The petitioner also claims that the proceedings initiated in respect of the petitioner were not dropped despite the Principal Director of Income Tax (Inv.), Kanpur recommending that no action be taken in respect of the petitioner as well as one M/s Gold Feather Pvt. Ltd. [GFPL]. He states that pursuant to the said recommendation, the proceedings against GFPL - which were commenced on the basis of the same information - were dropped. However, the proceedings against the petitioner are continuing. 3. The impugned notice issued under Section 148A (b) of the Act indicates that it was issued on the basis of certain information available on the insight portal. The AO found that the said information suggested that the petitioner's income for AY 2020-21 had escaped assessment. We consider it apposite to set out the said information, which is reproduced below: "..Information was received in this office duly sent by DDIT(INV.), Rourkela in the case of M/s Devat Ram and Company Pvt. Ltd. as per the case Related information Details" wherein the beneficiary has bogus purchases from dummy companies....
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....ciliation statement of GSTR-2A with the party ledger to support the purchases made from MSIPL. The petitioner also provided a bank statement to evidence the payments made to MSIPL for the said purchases. 7. It is important to note that it is the petitioner's case that all goods that were purchased from MSIPL were directly sent on the same day through sales invoices and E-way bills to the entities to whom the goods were sold. The purchases were made on "bill to ship to" basis. The petitioner explained that the goods were transported directly from MSIPL to the persons to whom the goods were sold [the purchasers]. 8. It is material to note that none of the facts as set out by the petitioner in its reply were controverted. Notwithstanding the same, the AO passed an order under Section 148A (d) of the Act holding that it was a fit case for re-opening of the assessment solely on the basis that DDIT (Inv.), Rourkela had mentioned that MSIPL was a dummy entity with no business transactions. The AO disregarded the fact that the purchase consideration had been paid to MSIPL through banking channels and that the goods had moved directly from MSIPL to the purchasers. 9. It is also necessary....
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....are minimum, to examine the material placed by the petitioner and verify whether the same could be faulted. However, the AO did not undertake any such exercise but rejected the overwhelming evidence furnished by the petitioner merely on assuming that information available on the portal was correct. 13. The petitioner had also submitted that the Investigation Wing had conducted an enquiry and found that no action in the case of GFPL and the petitioner, was recommended. The letter dated 28.02.2024 sent by the Principal Director of the Income Tax (Investigation), Kanpur to other Income Tax Authorities advising that no action against the petitioner and GFPL was recommended, is set out below: "To, The Addl. Director of Income Tax (Inv.) Kanpur Sir, Sub: Submission of inquiry report in the case of M/s Chachan Metal Pvt. Ltd. M/s. Devat Ram and Company Pvt. Ltd. and M/s. Gold Feather Pvt. Ltd. - Reg. Kindly refer to your inquiry report bearing F. No. JDIT/KNP/TEP/2023-24/1991 dated 27.02.2024 on the REIC shared information disseminated by Commissioner, Commercial Tax, U.P. 2. In this connection, I am directed to convey that as per report, remedial action is recommended vi....
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.... Gold Feather) 5. Accordingly, notices proposing to reopen the assessment of Gold Feather were also issued. The petitioner states that on verification, the said proceedings in respect of Gold Feather were dropped. It is contended that it is clear that Madhumita Steel was not a dummy company, as alleged, and thus the foundation for commencing the reassessment proceedings does not stand. The petitioner also relies on a letter dated 28.02.2024, issued by the Office of the Principal Director of Income Tax (Investigation), Kanpur, recommending that no action be taken in the case of the assessee and Gold Feather. The letter also indicates that the same is based on an inquiry conducted earlier. 6. The learned counsel appearing for the Revenue seeks time to file a counter-affidavit. 7. Let the same be filed within a period of four weeks from date. Rejoinder, if any, be filed within a period of two weeks thereafter. 8. In the meanwhile, further proceedings relating to the impugned notice are stayed. 9. List on 13.01.2025." 15. The Revenue in its counter affidavit has not traversed the contention that the proceedings had been initiated in the case of GFPL on the basis of the....