The court emphasized the importance of addressing the petitioner's submissions and complying with the time limit for filing the reply, leading to the order for a de novo exercise by the AO.

JUDGMENT

[Physical Hearing/Hybrid Hearing (as per request)]

Rajiv Shakdher, J. (Oral)

CM APPL. 7037/2023

1. Allowed, subject to just exceptions.

W.P.(C) 1840/2023 & CM APPL. 7036/2023 [Application filed on behalf of the petitioner seeking interim relief]

2. Issue notice.

2.1. Mr Ruchir Bhatia, learned senior standing counsel, accepts notice on behalf of the respondents/revenue.

3. In view of the directions that we propose to pass, Mr Bhatia says, that no counter-affidavit is required to be filed.

4. Therefore, with the consent of the counsel for the parties, the writ petition is taken up for hearing and final disposal, at this stage itself.

5. This writ petition is directed against the order dated 10.04.2022 passed under Section 148A(d) of the Income Tax Act, 1961 [in short `the Act'], and the consequent notice dated 11.04.2022 issued under Section 148 of the Act.

5.1. The impugned order and notice concern Assessment Year (AY) 2018-19.

6. Besides laying challenge to the aforementioned notice and order, the petitioner has also sought a direction for grant of copies of the three approvals stated to have been given by respondent no.2 under Section 151 of the Act, and the information and material, based on which reassessment proceedings were triggered.

7. For the purpose of adjudication of the instant writ petition, the following essential facts need to be noticed.

7.1. The allegation against the petitioner is, that it is a beneficiary of "fictitious purchase" amounting to Rs.25,24,728/-. The source of this transaction is an entity, going by the name Balaji Enterprises.

7.2. Interestingly, it is not indicated in the Annexure appended to the notice dated 24.03.2022 issued under Section 148A(b) of the Act, as to what the fictitious purchase relates to. What muddles i.e., complicates the issue further, is the assertion made in paragraph 3 of the very same annexure. For the sake of convenience, the said part is extracted hereafter:

"3. Further, a perusal of return of income filed by the assessee, RISHAB GARG, for the year under consideration, it is noticed that the assessee had shown total income of Rs.632350/- of the Income Tax Act, 1961. No capital gain has been shown by the assessee in his return of income."

8. A perusal of the said extract would show, that there appears to be a confusion, as regards the fictitious purchase made by the petitioner. This is evident, as there is a reference to the fact, that the petitioner has not showed capital gains in his Income Tax Return.

9. Concededly, the petitioner was granted time to file a reply to the notice issued under Section 148A(b) of the Act. The reply had to be filed "on or before 31.03.2022".

10. The record shows, that the petitioner did file a reply on 28.03.2022, where he had made several assertions, including the fact that he had factored in the purchase made from the Balaji Enterprises, and that, in any event, he had paid tax on a presumptive basis, by taking recourse to the provisions of Section 44 AD of the Act. Therefore, the assertion of the petitioner was, that whether or not the purchase was fictitious would have no tax impact insofar as the petitioner was concerned.

11. However, a perusal of the order dated 10.04.2022 passed under Section 148A(d) of the Act discloses, that the Assessing Officer (AO) has not dealt with the various grounds and/or submissions made by the petitioner in his reply dated 28.03.2022. Inter alia, the AO had not dealt with the aspect, that he has paid tax on a presumptive basis under the provisions of Section 44-AD of the Act.

12. Besides this, clearly, the time limit for filing the reply provided under Section 148A(b) of the Act also stood breached. However, since the petitioner, in any case, had filed its reply, this aspect, at least in the instant matter, has lost its significance.

13. Therefore, according to us, the best course forward, would be to set aside the order dated 10.04.2022 passed under Section 148A(d) of the Act.

13.1. It is