2023 (9) TMI 116 - HC - Income Tax

Validity of Reopening of assessment u/s 147 - notice u/s 148A(b) - shorter period provided to resposd to assessee - bogus purchases - reassessment proceedings have been triggered pursuant to show-cause notices issued under Sections 74 and 132 of the Central Goods and Services Tax Act, 2017 - as contented timeframe granted did not permit the petitioner to file a more exhaustive and detailed reply to the said show-cause notice - HELD THAT - Respondent cannot but concur that the minimum statutory timeframe provided under the provisions of Section 148A(b) for filing the response is seven (7) days, which, in this case, was clearly not provided to the petitioner. Therefore, we would be entering into an area of uncertainty if we were to accept that in this case, the two (2) days granted to the petitioner via the notice dated 27.03.2023 was sufficient.The statute, as indicated above, provides a specific timeframe and therefore, that leeway would have to be granted to the assessee. Having regard to the fact that the responses to notices form part of the impugned order dated 31.03.2023 passed under Section 148A(d) in our view, the best way forward would be to set aside the said order with liberty to the AO to pass a fresh order. Petitioner has indicated to us that the petitioner would like to file a further reply, accordingly, two (2) weeks are granted to file a comprehensive reply to both notices issued under Section 148A(b) of the Act.AO, upon receipt of the reply, will issue a notice to the petitioner for according personal hearing in the matter. The notice will indicate the date and time of the hearing. AO will, thereafter, proceed to pass a speaking order; a copy of which will be furnished to the petitioner. 16. The writ petition is disposed of, in the aforesaid terms.

Summary

Issues involved:
The judgment concerns a writ petition related to Assessment Year 2019-20 under the Income Tax Act, 1961. The issues revolve around notices issued to the petitioner regarding alleged bogus purchases from specific suppliers and a subsequent transaction with another entity, as well as the adequacy of the time provided for the petitioner to respond to these notices.

Bogus Purchases Allegations:
The petitioner received a notice under Section 148A(b) of the Income Tax Act, 1961, regarding alleged bogus purchases from two suppliers, Jatalia Global Ventures Ltd. and RCI Industries & Technologies Ltd. The cumulative value of these transactions was significant. Subsequently, another notice was issued concerning a transaction with Reema Polychem Private Limited. The petitioner responded to both notices within the specified timelines.

Reassessment Proceedings and Timeframe for Response:
The Assessing Officer passed an order under Section 148A(d) of the Act, triggering reassessment proceedings based on show-cause notices under the Central Goods and Services Tax Act, 2017. The petitioner argued that the reassessment was premature as adjudication under the allied statutes was pending. Additionally, the petitioner contended that the timeframe provided for responding to the RPPL transaction notice was insufficient, contrary to the statutory requirement of seven days.

Court Decision:
The Court acknowledged that the petitioner was not given the minimum statutory timeframe of seven days to respond to the RPPL transaction notice. As a result, the impugned order was set aside, granting the petitioner two weeks to file a comprehensive reply to both notices. The Assessing Officer was directed to conduct a personal hearing and pass a speaking order based on the petitioner's response. The writ petition was disposed of accordingly, with parties instructed to act based on the digitally signed copy of the order.