Abhinav Mittal V. Union of India and Principal Commissioner of Income Tax (Central) Guwahati and Assistant Commissioner of Income Tax Central Circle-2 Guwahati

WP(C)/3067/2022

AI Insights

The case involves Abhinav Mittal, the petitioner, who was accused of making bogus purchases from two companies during the financial year 2017-18, as per a notice under Section 148A of the Income Tax Act, 1961. The petitioner contested these allegations, claiming instead that he had sold goods to the same companies for the amounts cited in the notice. The Assistant Commissioner of Income Tax initially responded to the petitioner's claim by noting the 'strangeness' of the situation but did not provide a substantive evaluation or conclusion regarding the petitioner's response. The High Court found this approach inadequate and remanded the case for a proper assessment.

• Counselvise Citation: [2022] 140 COUNSELVISE.COM (IT) 800604 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 11-05-2022
• Assessment Year: misc
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: S G I
• Assessee Lawyers: P AGARWAL
• Keywords: Bogus purchases; Income Tax; Remand; Show cause notice
• Section: 148A

Judgement Text

"Page No.# 1/4 GAHC010087812022 THE GAUHATI HIGH COURT (HIGH COURT OF ASSAM, NAGALAND, MIZORAM AND ARUNACHAL PRADESH) Case No. : WP(C)/3067/2022 ABHINAV MITTAL S/O- SHRI SANTOSH KUMAR JASRASARIA, R/O- HOUSE NO. 17, AOYIMKUM VILLAGE, NEAR EROS CINEMA, DIMAPUR-797112, NAGALAND. VERSUS UNION OF INDIA AND 2 ORS. THROUGH THE SECRETARY, MINISTRY OF FINANCE, NORTH BLOCK, NEW DELHI-110001. 2:PRINCIPAL COMMISSIONER OF INCOME TAX (CENTRAL) GUWAHATI AAYAKAR BHAWAN CHRISTIAN BASTI G.S. ROAD GUWAHATI-781005 ASSAM 3:ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE-2 GUWAHATI AAYAKAR BHAWAN CHRISTIAN BASTI G.S. ROAD GUWAHATI-781005 ASSA Advocate for the Petitioner : MS P AGARWAL Advocate for the Respondent : ASSTT.S.G.I. Page No.# 2/4 BEFORE HONOURABLE MR. JUSTICE ACHINTYA MALLA BUJOR BARUA ORDER 11.05.2022 Heard Mr. A Jain, learned counsel for the petitioner. Also heard Mr. H Gupta, learned counsel for the respondents in the Income Tax Department. 2. A notice under Section 148A of the Income Tax Act, 1961 dated 21.03.2022 was issued to the petitioner assessee wherein in paragraph 1 of the Annexure thereto it was provided as extracted: “1.Information has been received through Insight Portal under High RiskCase Related Information that Sri Abhinav Mittal had made bogus purchases from M/s. Swastik traders, Prop. Shri Rahul Bhuraria for Rs.40,86,573/- and M/s Kalki Trading Company, Prop. Shri Deepesh Goel for Rs.25,94,075/- during the financial year 2017- 18.” 3. A reading of the said paragraph 1 prima facie indicates that the allegation against the petitioner is that he had made bogus purchase from M/s. Swastik Traders whose proprietor is Rahul Bhuraria for an amount of Rs.40,86,573/- and M/s Kalki Trading Company whose proprietor is Shri Deepesh Goel for an amount of Rs.25,94,075/- during the financial year 2017-18. 4. The petitioner in response thereof had given a reply before the Assessment Officer that he had not made any purchase as alleged in the notice under Page No.# 3/4 Section 148(A), but on the other hand for an equivalent amount for the period 2017-18, he has sold Kabuli Channa and Rajma to M/s. Swastik Traders and Kalki Trading Company of the said amount. 5. A transaction of purchase and a transaction of sale are two different transactions in two opposite directions. If the allegation is that bogus purchases were made and the reply given thereof is that no such purchases were made, but in fact it was a sale by the assessee, it was for the Income Tax officials to apply their own mind on the reply given by the petitioner. 6. By the order dated 31.03.2022 of the Assistant Commissioner the only satisfaction that was arrived at is as extracted: “….It is rather strange that the assessee had made the exact sale amount towards sale of kabuli chana, as against the alleged bogus sale reported in the information received through Risk Management Strategy of the Board…” 7. Conveniently, the Assistant Commissioner converts the allegation made in the show cause notice from a bogus purchase to that of a sale after the reply of the petitioner and also instead of arriving at any satisfaction, the Assistant Commissioner merely expressed that it is rather strange that the assessee had acted in the manner indicated therein. 8. In view of the above, we interfere with the order dated 31.03.2022 and remand the matter back to the Assistant Commissioner for an appropriate order to be passed as required under the law by arriving at a satisfaction regarding Page No.# 4/4 acceptability/non-acceptability of the reply given by the petitioner vis-à-vis the allegation in the show cause notice under Section 148A of the Income Tax Act. 9. We make it clear that we are not interfering with the order for any other reason other than what is indicated above and the Assistant Commissioner would proceed de-novo from the stage of show cause reply being submitted by the petitioner. 10. Writ petition stands disposed of in the above terms. JUDGE Comparing Assistant "