Full Judgment Text
$~28
* IN THE HIGH COURT OF DELHI AT NEW DELHI
% Date of Decision: 24.08.2023
+ W.P.(C) 7187/2023 & CM APPL. 27973/2023
SRIVENKATESHWAR TRADEX PRIVATE LIMITED THROUGH ITS
DIRECTOR, RAHUL SOLANKI ..... Petitioner
Through: Mr A.K. Babbar with Mr Surinder Kumar, Advs.
versus
PRINCIPAL COMMISSIONER OF INCOME TAX,
PCIT 7 & ANR. ..... Respondents
Through: Mr Ruchir Bhatia, Sr Standing Counsel with Ms
Deeksha Gupta, Adv.
CORAM:
HON'BLE MR. JUSTICE RAJIV SHAKDHER
HON'BLE MR. JUSTICE GIRISH KATHPALIA
[Physical Hearing/Hybrid Hearing (as per request)]
RAJIV SHAKDHER, J.: (ORAL)
1. Issue notice.
1.1 Mr Ruchir Bhatia, learned senior standing counsel, accepts notice on
behalf of the respondents/revenue.
2. Given the directions that we propose to pass, Mr Bhatia says that no
counter-affidavit is required to be filed in the matter and he will rely on the
record presently available with the court.
2.1 Therefore, with the consent of the counsels for the parties, the writ
petition is taken up for final hearing and disposal at this stage itself.
3. This writ petition concerns Assessment Year (AY) 2019-20.
Signature Not Verified
W.P.(C) 7187/2023 Page 1 of 5
Digitally Signed By:TARUN
RANA
Signing Date:31.08.2023
15:13:24
4. The record shows that the petitioner was issued a notice dated
05.03.2023 under Section 148A(b) of the Income Tax Act, 1961 [in short,
“1961 Act”], with regard to the bogus purchases allegedly made by it from
two suppliers i.e., Jatalia Global Ventures Ltd. [in short, “JGVL”] and RCI
Industries & Technologies Ltd. [in short, “RCI”].
4.1 The value of the bogus purchases qua each of these suppliers was
placed at Rs.21,00,24,258/-. The cumulative value of the transactions with
these two entities was, thus, pegged at Rs.49,40,45,269/-.
4.2 It appears that as per the said notice, the petitioner was required to file
its response on or before 13.03.2023.
5. The record shows that on 13.03.2023, based on the request of the
petitioner, an extension was granted, and accordingly, the petitioner was
called upon to file its response on or before 16.03.2023.
6. It appears that, thereafter, another notice dated 27.03.2023 was issued
to the petitioner under Section 148A(b) of the 1961 Act, whereby the
petitioner was called upon to respond to the allegations contained therein,
albeit , on or before 29.03.2023.
6.1 Apart from the fact that the time granted for filing the response was
short, the allegations made against the petitioner were different from that
which were subject matter of the earlier notice dated 05.03.2023.
6.2 This time around, the allegation levelled against the petitioner was that
it had entered into a transaction with an entity going by the name Reema
Polychem Private Limited [in short, “RPPL”].
6.3 The respondent/revenue, insofar as this entity was concerned, placed
the value of the transaction of Rs.2,79,09,300/-.
Signature Not Verified
W.P.(C) 7187/2023 Page 2 of 5
Digitally Signed By:TARUN
RANA
Signing Date:31.08.2023
15:13:24
7. It is not in dispute that the petitioner had filed responses to both
notices issued under Section 148A(b) of the 1961 Act. These responses are
dated 16.03.2023 and 30.03.2023.
8. The Assessing Officer (AO), however, was not persuaded by the
responses furnished on behalf of the petitioner and, thus, proceeded to pass
the impugned order dated 31.03.2023 under Section 148A(d) of the Act.
9. Mr A.K. Babbar, who appears on behalf of the petitioner, says that the
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 [in short, “CGST Act”], read with the corresponding
provisions of the State Goods and Services Tax Act, 2017 [in short, “SGST
Act”] as also the Integrated Goods and Services Tax Act, 2017 [in short,
“IGST Act”].
9.1 It is Mr Babbar’s contention that the adjudication concerning these
show-cause notices is pending and therefore, the fact that the proceedings
were triggered under the allied statutes, simpliciter , could not be taken as
information, without due application of mind for triggering reassessment
proceedings under the 1961 Act.
10. Besides this, Mr Babbar also submits that insofar as the allegations
made against the petitioner with regard to the fictitious purchases made from
RPPL was concerned, the AO gave the petitioner barely two (2) days to file
a response, which is contrary to the provisions of the 1961 Act.
10.1 It is Mr Babbar’s contention that the timeframe granted did not permit
the petitioner to file a more exhaustive and detailed reply to the said show-
cause notice.
Signature Not Verified
W.P.(C) 7187/2023 Page 3 of 5
Digitally Signed By:TARUN
RANA
Signing Date:31.08.2023
15:13:24
11. Mr Bhatia, on the other hand, says that no prejudice was caused to the
petitioner, since both the replies have been considered in the impugned
order.
11.1 Mr Bhatia, however, cannot but concur that the minimum statutory
timeframe provided under the provisions of Section 148A(b) of the 1961 Act
for filing the response is seven (7) days, which, in this case, was clearly not
provided to the petitioner.
12. 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.
13. The statute, as indicated above, provides a specific timeframe and
therefore, that leeway would have to be granted to the assessee.
14. 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) of the 1961
Act, 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.
14.1 It is ordered accordingly.
15. Since Mr Babbar 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.
15.1 The 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.
15.2 The AO will, thereafter, proceed to pass a speaking order; a copy of
Signature Not Verified
W.P.(C) 7187/2023 Page 4 of 5
Digitally Signed By:TARUN
RANA
Signing Date:31.08.2023
15:13:24
which will be furnished to the petitioner.
16. The writ petition is disposed of, in the aforesaid terms.
17. Consequently, the pending application shall stand closed.
18. Parties will act based on the digitally signed copy of the order.
RAJIV SHAKDHER, J
GIRISH KATHPALIA, J
AUGUST 24, 2023 /pmc
Signature Not Verified
W.P.(C) 7187/2023 Page 5 of 5
Digitally Signed By:TARUN
RANA
Signing Date:31.08.2023
15:13:24