The assessing officer must supply underlying material for assessment proceedings, and timelines for orders under Section 148A(d) may be extended based on nature of responses.

JUDGMENT

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

Rajiv Shakdher, J.: (ORAL)

CM APPL. 56129/2022

1. Allowed, subject to just exceptions.

W.P.(C) 17577/2022 & CM APPL. 56128/2022 [Application filed on behalf of the petitioner seeking interim relief]

2. Issue notice.

2.1. Mr Sanjay Kumar accepts notice on behalf of the respondent/revenue.

3. In view of the directions that we intend to pass, Mr Kumar says that counter-affidavit is not required to be filed.

4. Therefore, with the consent of 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 25.07.2022 passed under Section 148A(d) of the Income Tax Act, 1961 [in short, "the Act"] and the consequential notice of even date i.e., 25.07.2022 issued under Section 148 of the Act concerning Assessment Year (AY) 2016-2017.

6. The record appears to show that while the Assessing Officer (AO) was carrying out the assessment vis-a-vis AY 2017-2018, he came across certain unsecured loan transactions entered into amongst three entities [whose names are set forth hereafter] amounting to a cumulative sum of Rs.2.7 crores. The details concerning the read as follows:

7. Given this position, the assessing officer formed, broadly, the following view:

(i) That these were accommodation entries, and in this context, adverted to the fact that the parties were located at the same address; furthermore inspection/enquiry was conducted at two locations which revealed that the aforementioned lenders were either not found at the given address or exhibited typical characteristics of entry providing entities.

(ii) That there were common directors, and at least two out of the three companies referred to above had their names struck off, presumably, from the register maintained by the Registrar of Companies (ROC).

(iii) Likewise, directors of two out of the three companies i.e., Capital Introtech Pvt. Ltd. and NCR Buildtech Pvt. Ltd. did not respond to the summons issued by the assessing officer on 29.11.2019.

(iv) Most of the lenders had nominal incomes. In other words, they did not have the potential to lend the amounts to third parties.

8. We have, on record, the reply dated 31.05.2022 whereby the petitioner, inter alia, sought the following information/material from the AO.

(i) Enquiries made by the AO.

(ii) Inspection/ Enquiry Report.

(iii) Any other reports/documents incidental or related to the above.

(iv) Lastly, any other information and material relied upon by the revenue.

9. We may note that in the very same reply, the petitioner had indicated that it would file a further response once the aforementioned information/material is provided and that even if the information/material is not provided, it would reserve its the right to file a further response.

10. During the course of the proceedings, it has emerged, that at least, the information that the AO and/or Inspector gathered concerning the transactions in issue has not been furnished to the petitioner.

11. The record also shows that in view of the response dated 31.05.2022, the AO via communication dated 16.06.2022 granted further time to the petitioner to file a final response, albeit on or before 27.06.2022; making it clear that if no response is received, an order under Section 148A(d) of the Act would be passed based on the material