2023 (7) TMI 1163 - HC - Income Tax

Reopening of assessment - Bogus import activities of assessee - DR stated Petitioner has not even submitted any documentary evidence regarding import to refute the claim that imports were bogus - HELD THAT - It is Petitioner s case that whatever documents were required has been submitted. Instead of issuing vague notices, it would help Assessee also to effectively respond, if the notices are clearly worded and a list of what information/document is required is also sent to Assessee. There is no allegation that Petitioner has made any imports. Petitioner has not been even called upon to produce documents regarding any imports. Therefore, we wonder how could Respondent No. 1 make an allegation that Petitioner has not submitted any documentary evidence regarding imports to refute the claim that imports were bogus. We quash and set aside the order issued u/s 148A(d) of the Act and remand the matter for de-novo consideration.

Summary

Issues involved:
The issues involved in the judgment are related to the assessment of income tax u/s 143(1) of the Income Tax Act, 1961, and the subsequent notice issued u/s 148A(b) alleging accommodation entries through imports from a partnership firm.

Assessment of Income Tax:
The Petitioner initially filed a return of income for AY 2019-20 declaring a total income, later revised. The assessment was completed u/s 143(1) of the Act. Subsequently, a notice u/s 148A(b) was received, alleging accommodation entries for imports from M/s. Jogi Gems to evade transfer pricing compliance.

Challenges and Responses:
The Petitioner responded to the notice by requesting detailed information and providing various financial documents of M/s. Jogi Gems. Despite this, an order was passed u/s 148A(d) without providing the necessary investigation details to the Petitioner. The order alleged accommodation entries without clear basis or evidence.

Judgment and Remand:
The High Court quashed the order issued u/s 148A(d) and remanded the matter for fresh consideration. The consequential notice u/s 148 was also set aside. Respondent No. 1 was directed to provide all investigation documents related to M/s. Jogi Gems to the Petitioner within two weeks for further response.

Further Proceedings:
Upon receiving the documents, the Petitioner was given the opportunity to file a further reply within two weeks. Any subsequent order u/s 148A(d) should be reasoned and address all submissions made by the Petitioner. A personal hearing was mandated before passing any order, with a notice period of at least five working days in advance.

Conclusion:
The petition was disposed of with no order as to costs, emphasizing the importance of providing detailed information to the taxpayer and ensuring a fair and transparent assessment process.