TaxTMI 
TaxTMI 
2026 (9) TMI 1559
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....h August 2025, Respondent No. 1 issued a Notice under Section 142(1) of the Act stating that he had information that the Petitioner had imported material amounting to Rs. 1796,24,49,546/- which was not in line with its financial statements, and sought an explanation from the Petitioner in this regard. The Petitioner, on 9th September 2025, responded to the said query, forwarding a copy of its purchase register and requesting Respondent No. 1 to provide an invoice wise and bill of entry wise summary to enable it to furnish a detailed reconciliation. 5. On 5th January 2026, Respondent No. 1 issued another Notice under Section 142(1) of the Act revising the import numbers [on which clarification was sought] to Rs. 1476,04,04,909/- and in this regard provided the Petitioner with information under the following heads - (a) the transaction month, (b) the number of bills of entry in the relevant month, (c) consolidated invoice values for multiple bills of entry and (d) consolidated duty paid for multiple bills of entry. In response, the Petitioner by letter dated 12th January 2026 once again requested Respondent No. 1 to provide an invoice wise an....
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.... of the Act. Accordingly, Respondent No. 1 computed the total income of the Petitioner at Rs. 297,68,14,930/- and raised a demand of Rs. 308,30,37,290/-. 8. Being aggrieved, the Petitioner filed an appeal before the Commissioner of Income Tax (Appeals) on 24th April 2026. Simultaneously, the Petitioner filed an application with Respondent No. 1 seeking a stay against recovery of the said demand of Rs. 308,30,37,290/- and also approached the high-pitched committee by its application dated 24th April 2026. On 9th July 2026, Respondent No. 1 issued a Notice to the Petitioner, inter alia, calling upon it to make payment of the demand due for A.Y. 2023-24, which was responded to by the Petitioner highlighting the pendency of its application for stay and reiterating its contentions as set out therein. 9. On 20th July 2026, Respondent No. 3 issued a Notice for hearing of the Appeal for A.Y. 2023-24, calling upon the Petitioner to file its submissions. The Petitioner by its letter dated 27th July 2026 filed detailed submissions, inter alia, highlighting the discrepancy in the approach of Respondent No. 1. 10. Given that there was no response from Respondent No. 1 or the high-pitch....
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....rmation available with him. He submitted that not even a single specific error was pointed out by Respondent No. 1 before rejecting the submissions of the Petitioner and making an addition of a staggering amount of Rs. 290,61,87,535/-. In this regard the learned counsel relied upon the decision of this Court in the case of JSW Mineral Trading (P) Ltd. V/S Assessment Unit [(2026) 183 taxmann.com 28 (Bombay)]. He therefore submitted that the Petitioner has made out a strong prima facie case against the addition made by the Assessing Officer. 13. The learned counsel for the Petitioner further submitted that the assessment framed is exceedingly high pitched, 42 times the returned income, and therefore in view of Instruction No.96 dated 21st August 1969 read with Instruction No. 1914 dated 2nd February 1993, such a demand deserves to be stayed until the disposal of the first appeal pending before Respondent No. 3. Reliance was placed on the decisions of this Court in the case of Humuza Consultants V/S ACIT [(2022) 145 taxmann.com 495 (Bombay)] [being an interim order] and thereafter confirmed vide order dated 17th March 2023 which finally disposed of the Writ Petition, and the decisi....
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.... 1 has provided the following information:- Transaction Month No. of bills of entry Invoice Value (Rs.) Duty paid (Rs.) April 1 Rs. 198105861.95/- Rs. 3,56,59,055/- April 4 Rs. 31,19,74,837.72/- Rs. 5,61,55,471/- April 2 Rs. 68,17,07,828.72/- Rs. 12,27,07,410/- April 1 Rs. 198105861.59/- Rs. 3,56,59,055/- April 4 Rs. 31,19,74,837.72/- Rs. 5,61,55,471/- April 2 Rs. 68,17,07,828.72/- Rs. 12,27,07,410/- Similar information in a similar format has been provided for May 2022 to March 2023, aggregating to Rs. 1476,04,04,909/-. In the notice dated 11th March 2026, again, Respondent No. 1 has not provided any information in addition to that disclosed in his Notice dated 5th January 2026, save and except presenting it in a different format. We find that the Petitioner has repeatedly, by its letters dated 9th September 2025, 12th January 2026 and 18th March 2026, requested Respondent No. 1 to provide invoice wise and bill of entry wise details to enable it to submit a reconciliation. We find that the Petitioner in its letter dated 18th March 2026 has provided Respondent No. 1 with details of imports made b....
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....pondent No. 1 required the responses of the Petitioner to be re-filed. On 6th September 2023, Respondent No. 1 issued a show cause notice which yet again set out the aggregate figures of imports, and without any details whatsoever, stated the difference of Rs. 302,26,74,069/- remained unverified, and required the Petitioner to show cause why the same should not be treated as unexplained money as per Section 69A of the Act. Reply to the show cause notice was sought by 11:42 hours on 11th September 2023. On the Petitioner's request, an adjournment was granted upto 14th September 2023. On this date the Petitioner replied to the best of it's ability, given that no details of the data used by Respondent No. 1 was provided. All these facts narrated hereinabove are undisputed. 19. On examining these undisputed facts, apart from the question of whether sufficient time was allowed to the Petitioner, we are of the view that it is impossible for the Petitioner to reconcile and/or explain the alleged difference between the figures of imports as per the ITR/accounts of the Petitioner, and the data of the CBEC, in the absence of complete details of the break up of the CBEC data ....
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....ncing the interest of the assessee with the protection of the Revenue." We are of the opinion that these parameters have not been considered by the respondents in true letter and spirit as is evident from the orders passed that are based on the Petitioner's status as a Firm instead of as a Trust. 31. Apropos the judgment in the case of UTI Mutual Fund (supra) wherein this Court held that in considering whether a stay of demand granted, the Court is duty bound to consider not merely the issue of financial hardship if any, but also whether a strong prima facie case is made out and serious triable issues are raised that would warrant a dispensation of deposit. It was further held that calling upon Petitioner to deposit, would itself occasion undue hardship where a strong prima facie case has been made out. We are of the opinion that the respondents have failed to consider the ratio of the judgment in its true letter and spirit inasmuch as respondents called upon the Petitioner to deposit 10% of the demand when the Petitioner had a strong prima facie case. In our view, the deposit would itself occasion undue hardship to the Petitioner who are Trust created for the....