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RAJIV SHAKDHER, GIRISH KATHPALIA
Aadi India Private Limited – Appellant
Versus
Assistant Commissioner of Income Tax, Circle 1 (1) , Delhi – Respondent
JUDGMENT
Rajiv Shakdher, J. (Oral) - We heard the matter at length on 12.09.2023, whereupon we had etched out the broad contours of the matter. Thus, for the sake of convenience, the relevant parts of the order dated 12.09.2023 are extracted hereafter:
"2. This writ petition concerns Assessment Year (AY) 2019-20.
3. Via the instant writ petition, a challenge is laid by the petitioner to the following order and notices:
(i) Notice dated 23.02.2023 issued under Section 148A(b) of the Income Tax Act, 1961 [in short, "Act"].
(ii) Order dated 31.03.2023 passed under Section 148A(d) of the Act.
(iii) Notice dated 31.03.2023 issued under Section 148 of the Act.
4. A perusal of the notice dated 23.02.2023 issued under Section 148A(b) of the Act would show that the principal allegation against the petitioner, to begin with, was that there were unexplained credits in its bank account amounting to Rs.1,33,89,087/-.
4.1 It was alleged that the said credit entries arose on account of transactions with three entities going by the name M.K. Traders, Luxmi Agencies, and Lucky Traders.
5. The record shows that the petitioner filed a reply to the aforementioned notice on 07.03.2023. The stand taken by the pe
The court emphasized the importance of the AO seeking explanations before considering investments as unexplained, especially when the focus of the allegations had shifted.
The court emphasized the importance of ensuring that allegations made by the Assessing Officer are put to the petitioner and that the next steps are taken in accordance with the law.
The central legal point established in the judgment is the requirement for actionable material and the significance of discrepancies in assessment proceedings under the Income Tax Act, 1961.
S.69A inapplicable to book-recorded credits with proved identity, source; reassessment invalid on factually incorrect information.
The Assessing Officer must provide adequate opportunity and conduct thorough inquiries before issuing a notice under Section 148, ensuring compliance with statutory requirements.
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