TaxTMI 
TaxTMI 
2026 (9) TMI 1078
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....led upon to furnish its return of income for Assessment Year (for short "A.Y.") 2019- 20. BRIEF FACTS: 3. The petitioner-company, engaged in the business of manufacturing CNC machines, filed its original return of income for A.Y. 2019-20 on 30.11.2019, declaring total income of Rs.45,05,86,190/-. The said return was processed under Section 143(1) of the Act on 18.05.2020, determining the total income at Rs. 45,20,60,740/-. 3.1 Subsequently, the assessment proceedings were reopened and a notice under Section 148 of the Act dated 30.03.2023 came to be issued on the basis of information received from the Investigation Wing alleging that the petitioner-company was a beneficiary of an accommodation entry of Rs. 78,34,409/- received from M/s. GSD Trading and Financial Services Pvt. Ltd. The petitioner participated in the reassessment proceedings and furnished the details and documents called for from time to time. Eventually, an assessment order came to be passed on 16.03.2024 under Section 147 read with Section 143(3) of the Act, determining the total income at Rs. 45,98,95,153/- after making various additions. The petitioner has preferred an appeal against the said assessment ....
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....he impugned notice is vitiated not only on account of nondisclosure of the relevant material but also because it proceeds on factually incorrect premises. 4.2 It is further submitted that the petitioner had undertaken sales transactions with M/s. Arco Trading Est LLP aggregating to Rs. 1,18,97,361/- and with M/s. Blue Cross Commodities Pvt. Ltd. aggregating to Rs. 28,59,62,668/-. The said transactions were duly recorded in the petitioner's books of account and financial statements and the corresponding income had been duly offered to tax. Consequently, there was no escapement of income as alleged. In support thereof, the petitioner had furnished voluminous material, including ledger accounts, sales invoices and relevant extracts of bank statements evidencing the transactions. 4.3 Learned advocate submitted that the information forming the basis of the proposed reassessment was thus not only factually erroneous but had also been accepted by the respondent without any independent verification or application of mind. It was contended that the respondent had merely relied upon the information uploaded on the Insight Portal without examining the petitioner's books of accou....
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.... petitioner had furnished documents such as E-way bills, tax invoices and transport receipts in respect of its transactions with M/s. Blue Cross Commodities Pvt. Ltd., it had failed to furnish E-way bills in respect of the transactions with M/s. Harshvardhan Commercials LLP and M/s. Arco Trading Est LLP. According to the learned Senior Standing Counsel, the said documents were produced before this Court only subsequently. 5.2 Learned Senior Standing Counsel further submitted that the information received by the respondent revealed that the petitioner had undertaken sales and purchase transactions with the aforesaid entities during the year under consideration, which were suspected to form part of a circular transaction structure involving no actual supply or delivery of goods or services. It was contended that the routing of funds through banking channels was undertaken merely to lend an appearance of genuineness to the transactions. 5.3 It was, therefore, submitted that the Assessing Officer had sufficient information to form the requisite prima facie belief regarding escapement of income and had duly exercised the jurisdiction vested in him under Section 148A of the Act. Le....
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....dertaken, nor were the basic particulars or nature of the transactions referred to in the notice disclosed. Along with the notice, however, the petitioner was furnished screenshots containing the Case Related Information Detail pertaining to three entities, namely, (i) M/s. Harshvardhan Commercials LLP; (ii) M/s. Arco Trading Est LLP; and (iii) M/s. Blue Cross Commodities Pvt. Ltd. The said Case Related Information Detail merely contain the PAN numbers and the information value relating to the respective entities. Among the documents referred to therein was the dissemination report. 8.1 Admittedly, the dissemination reports pertaining to the aforesaid three entities were not furnished to the petitioner along with the impugned notice. It is only during the pendency of the present writ petition that the said reports were furnished to the learned advocate for the petitioner and have thereafter been placed on record. The Revenue has unable to offer any satisfactory justification for withholding the dissemination reports from the petitioner at the stage of issuance of the notice under Section 148A(1) of the Act. 8.2 The consequence is significan....
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....ssessing Officer has not demonstrated any independent application of mind to the dissemination reports. The said reports are exhaustive and primarily concern M/s. Alfara's Infraprojects Pvt. Ltd., which is stated to have dealt with several entities, including the three entities referred to in the impugned notice. The reports contain references to numerous transactions and entities associated with M/s. Alfara's Infraprojects Pvt. Ltd. 10.2 In such circumstances, the Assessing Officer was required to examine the material contained in the dissemination reports and ascertain, at least prima facie, the specific role, if any, attributable to the petitioner. The Assessing Officer was also required to indicate the material which, in his opinion, connected the petitioner with the alleged fictitious or accommodation transactions. Such an exercise was necessary to afford the petitioner a meaningful opportunity to respond to the allegations. 10.3 The mere reproduction of the transactions and the screenshots of the Case Related Information Detail pertaining to the three entities cannot, in our considered opinion, satisfy the statutory requirement under Section 148A(1) of the Act. The oppo....