ORANGE TRADEX PRIVATE LIMITED V. INCOME TAX OFFICER, WARD 3(1)(1), AHMEDABAD

SCA/1324/2023

AI Insights

The case involves Orange Tradex Private Limited challenging notices issued under Section 148 of the Income Tax Act, 1961 for the assessment years 2015-16, 2016-17, and 2017-18. The notices were based on high-value transactions flagged by the Income Tax Department's risk profiling. The petitioner sought interim relief to stay the reassessment proceedings. The court, referencing the Supreme Court's decision in Anshul Jain vs. Principal Commissioner of Income Tax, dismissed the writ petition, advising the petitioner to agitate grievances during the reassessment proceedings before the Assessing Officer. Subsequently, the petitioner decided to withdraw the petitions, leading to their disposal as withdrawn.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 746503 (HC-GUJARAT)
• Appeal Type: Others
• Pronouncement Date: 20-02-2023
• Assessment Year: misc
• Other Referred Cases: Anshul Jain versus Principal Commissioner of Income Tax \\ Special Leave to Appeal (C) No. 14823 of 2022, Union of India versus Ashish Aggarwal reported in 444 ITR 1, Satva Merchandize (P.) Ltd. versus Income Tax officer reported in [2021] 133 taxmann.com 92 (Gujarat)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: KALPANAK RAVAL
• Assessee Lawyers: HARDIK VORA
• Keywords: High value transactions; Income Tax; Interim relief; Re-assessment; Statutory Mechanisms; Risk Profiling
• Section: 148; 149

Judgement Text

"C/SCA/1323/2023 ORDER DATED: 20/02/2023 IN THE HIGH COURT OF GUJARAT AT AHMEDABAD R/SPECIAL CIVIL APPLICATION NO. 1323 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 1324 of 2023 With R/SPECIAL CIVIL APPLICATION NO. 1325 of 2023 ========================================================== ORANGE TRADEX PRIVATE LIMITED Versus INCOME TAX OFFICER, WARD 3(1)(1), AHMEDABAD ========================================================== Appearance: MR. HARDIK V VORA(7123) for the Petitioner(s) No. 1 for the Respondent(s) No. 1 MRS KALPANAK RAVAL(1046) for the Respondent(s) No. 1 ========================================================== CORAM:HONOURABLE THE CHIEF JUSTICE MS. JUSTICE SONIA GOKANI and HONOURABLE MR. JUSTICE SANDEEP N. BHATT Date : 20/02/2023 COMMON ORAL ORDER (PER : HONOURABLE THE CHIEF JUSTICE MS. JUSTICE SONIA GOKANI) 1 . T h i s C o u r t , o n 3 1 . 0 1 . 2 0 2 3 , i s s u e d t h e n o t i c e a n d n o t i c e f o r t h e i n t e r i m r e l i e f . R e s p o n s e t o t h e s a m e , a f f i d a v i t - i n - r e p l y i s f i l e d b y t h e r e s p o n d e n t , w h e r e i t h a s a t t e m p t e d t o j u s t i f y t h e c h a l l e n g e t o t h e n o t i c e d a t e d 3 1 . 0 8 . 2 0 2 2 i s s u e d u n d e r S e c t i o n 1 4 8 o f t h e I n c o m e T a x A c t , 1 9 6 1 ( ‘ t h e A c t ’ f o r s h o r t ) f o r A . Y . 2 0 1 5 - 1 6 , 2 0 1 6 - 1 7 a n d 2 0 1 7 - 1 8 . O n t h e g r o u n d o f Page 1 of 7 C/SCA/1323/2023 ORDER DATED: 20/02/2023 a l t e r n a t i v e e f f i c a c i o u s r e m e d y a v a i l a b l e , i t i s u r g e d t h a t s t a t u t o r y m e c h a n i s m s t i p u l a t e d u n d e r t h e A c t s h o u l d b e r e s o r t e d t o . 2 . O n m e r i t , i t h a s b e e n u r g e d t h a t a s t h e r e q u e s t i s f o r s t a y o f r e a s s e s s m e n t p r o c e e d i n g s p u r s u a n t t o t h e i m p u g n e d n o t i c e , l e t n o m e r i t b e c o n s i d e r e d r e l y i n g o n t h e o r d e r o f t h e A p e x C o u r t i n c a s e o f A n s h u l J a i n v e r s u s P r i n c i p a l C o m m i s s i o n e r o f I n c o m e T a x – S p e c i a l L e a v e t o A p p e a l ( C ) N o . 1 4 8 2 3 o f 2 0 2 2 , d a t e d 0 2 . 0 9 . 2 0 2 2 , w h i c h i s r e p r o d u c e d a s u n d e r : “What is challenged before the High Court was the re-opening notice under Section 148A(d) of the Income Tax Act, 1961. The notices have been issued, after considering the objections raised by the petitioner. If the petitioner has any grievance on merits thereafter, the same has to be agitated before the Assessing Officer in the re-assessment proceedings. Under the circumstances, the High Court has rightly dismissed the writ petition. No interference of this Court is called for. Page 2 of 7 C/SCA/1323/2023 ORDER DATED: 20/02/2023 The present Special Leave Petition stands dismissed. Pending applications stand disposed of.” 3 . I t i s a l s o t h e s a y o f t h e r e s p o n d e n t t h a t t h e r e t u r n o f i n c o m e f o r A . Y . 2 0 1 5 - 1 6 w a s f i l e d o n 1 4 . 1 0 . 2 0 1 5 . T h e i n f o r m a t i o n h a s b e e n f l a g g e d o n t h e i n s i g h t p o r t a l a s u p l o a d e d b y t h e D i r e c t o r a t e o f I n c o m e T a x ( S y s t e m s ) a f t e r r i s k p r o f i l i n g b a s e d o n e n q u i r y r e p o r t s a n d f i n d i n g o f D i r e c t o r a t e o f I n c o m e T a x ( I n v e s t i g a t i o n ) a n d D i r e c t o r a t e o f I n v e s t i g a t i o n & C r i m i n a l I n v e s t i g a t i o n . T h e r e w e r e f r e q u e n t h i g h v a l u e t r a n s a c t i o n s t h r o u g h t r a n s f e r a n d t h r o u g h R T G S i n t h e a c c o u n t . T h e d e t a i l s o f w h i c h h a v e b e e n g i v e n r u n s i n t o c r o r e o f r u p e e s . S t a t e m e n t o f o n e o f t h e D i r e c t o r s w a s r e c o r d e d , w h o c o u l d n o t s u b s t a n t i a t e h o w t h e t r a n s a c t i o n s i n b a n k a c c o u n t w e r e g e n u i n e . 4 . I t i s t h e s a y o f t h e r e s p o n d e n t f u r t h e r t h a t t h e g e n u i n e n e s s o f t r a n s a c t i o n s Page 3 of 7 C/SCA/1323/2023 ORDER DATED: 20/02/2023 a p p e a r i n g i n t h e B a n k a c c o u n t s s i n c e r e m a i n e d u n s u b s t a n t i a t e d , i t w a s n o t i c e d t h a t s o m e f a k e t r a n s a c t i o n s o f t h e B a n k a c c o u n t s w e r e c a r r i e d o u t w i t h t h e p e r s o n s o f A r d o r G r o u p , a g a i n s t t h e D i r e c t o r s o f w h o s e , t h e C B I h a s r e g i s t e r e d t h e c o m p l a i n t , w h o s u b m i t t e d t h e f r a u d u l e n t b o o k d e b t s t a t e m e n t s t o t h e b a n k . 5 . T h e s h o w - c a u s e n o t i c e , a c c o r d i n g t o p e t i t i o n e r , i n c a s e o f p o s t U n i o n o f I n d i a v e r s u s A s h i s h A g g a r w a l , r e p o r t e d i n 4 4 4 I T R 1 n e e d n o t b e i n t e r f e r e d w i t h a n d n o i n t e r i m r e l i e f a l s o i s r e q u i r e d t o b e g r a n t e d . 6 . W e h a v e l e a r n e d a d v o c a t e M r . H a r d i k V o r a f o r t h e p e t i t i o n e r s , w h o h a s s t r a n e o u s l y u r g e d t h a t t h e i n f o r m a t i o n , w h i c h h a s b e e n r e l i e d u p o n , i s f r o m t h e i n s i g h t p o r t a l a n d m o r e o v e r , t h e d e t a i l s w h i c h h a v e b e e n s p e c i f i e d i n t h e r e p l y d o n o t a n y w h e r e c o v e r i s t o b e ‘ t h e a s s e t ’ a s p r o v i d e d u n d e r t h e s t a t u t e . T h e e x p l a n a t i o n t o Page 4 of 7 C/SCA/1323/2023 ORDER DATED: 20/02/2023 S e c t i o n 1 4 9 o f t h e A c t w i t h t h e p u r p o s e o f C l a u s e ( b ) o f S e c t i o n p r o v i d e s t h a t ‘ a s s e t ’ w o u l d i n c l u d e m o v a b l e p r o p e r t y , b e i n g l a n d o r b u i l d i n g o r b o t h , s h a r e s a n d s e c u r i t i e s , l o a n s a n d a d v a n c e s , d e p o s i t s i n b a n k a c c o u n t . A s t h e t r a n s a c t i o n s , a c c o r d i n g t o t h e r e s p o n d e n t , d o n o t c o v e r a n y o f t h e s e , t h i s s h o u l d b e t h e g r o u n d f o r t h e C o u r t n o t t o a l l o w i n g t h e f u r t h e r a s s e s s m e n t p u r s u a n t t o t h e n o t i c e i m p u g n e d . I t i s a l s o f o r t h e y e a r 2 0 1 6 - 1 7 a n d 2 0 1 7 - 1 8 r a i s e d t h e o b j e c t i o n o f t h e a p p r o v a l g r a n t e d b y t h e P r i n c i p a l C o m m i s s i o n e r a n d n o t t h e P r i n c i p a l C h i e f C o m m i s s i o n e r . 7 . L e a r n e d a d v o c a t e M r . K a r a n S a n g h a n i , a p p e a r i n g f o r t h e l e a r n e d s e n i o r s t a n d i n g c o u n s e l M r s . K a l p a n a k R a v a l f o r t h e r e s p o n d e n t a u t h o r i t i e s h a s f o r c e f u l l y a r g u e d b e f o r e t h i s C o u r t t h a t t h e c a s e i s c o v e r e d u n d e r t h e E x p l a n a t i o n i n S e c t i o n 1 4 9 o f t h e A c t , w h e r e t h e a s s e t a l s o i n c l u d e s t h e d e p o s i t s i n t h e b a n k a c c o u n t , m o r e o v e r , i t i s n o t a n e x h a u s t i v e Page 5 of 7 C/SCA/1323/2023 ORDER DATED: 20/02/2023 d e f i n i t i o n b u t , b y a l l m e a n s a n i n c l u s i v e d e f i n i t i o n . H e a l s o f u r t h e r h a s u r g e d t h a t i n s i g h t p o r t a l h a s r e v e a l e d t h e s e d e t a i l s , t h e A r d o r G r o u p t r a n s a c t i o n s h a v e b e e n q u i t e s u s p i c i o u s a n d t h e c o m p l a i n t b y t h e C B I h a d r e s u l t e d i n t o t h e a c t i o n s a g a i n s t t h a t G r o u p . I n t h e i n s t a n t c a s e , a c c o r d i n g t o h i m , t h e l a r g e s t b e n e f i c i a r y o f t h e t r a n s a c t i o n s o f t h e b a n k a c c o u n t o f t h i s c o n c e r n A r d o r G r o u p a n d i t h a s b e e n m a d e q u i t e c l e a r t h a t d i v e r s i o n h a s c a u s e d w r o n g f u l l o s s . H e i s a l s o r e l i e d o n t h e o r d e r o f t h i s C o u r t i n c a s e o f S a t v a M e r c h a n d i z e ( P . ) L t d . , v e r s u s I n c o m e T a x o f f i c e r , r e p o r t e d i n [ 2 0 2 1 ] 1 3 3 t a x m a n n . c o m 9 2 ( G u j a r a t ) . 8 . H a v i n g h e a r d b o t h t h e s i d e s a n d h a v i n g a l s o c o n s i d e r e d t h e m a t e r i a l o n t h e r e c o r d , t h e a s p e c t t h a t n e e d s t o b e c o n s i d e r e d b y t h i s C o u r t i s a s t o w h e t h e r a n y i n t e r i m r e l i e f a t t h i s s t a g e i s n e c e s s a r y , s i n c e t h e r e - a s s e s s m e n t f o r t h e A Y 2 0 1 5 - 1 6 , 2 0 1 6 - 1 7 a n d 2 0 1 7 - 1 8 c o n t i n u e , p u r s u a n t t o t h e Page 6 of 7 C/SCA/1323/2023 ORDER DATED: 20/02/2023 n o t i c e i s s u e d u n d e r S e c t i o n 1 4 8 o f t h e A c t i n p o s t U n i o n o f I n d i a v e r s u s A s h i s h A g g a r w a l ( s u p r a ) . 9 . A t t h i s s t a g e , l e a r n e d a d v o c a t e , M r . H a r d i k V o r a s e e k s p e r m i s s i o n t o w i t h d r a w t h e s e p e t i t i o n s . 1 0 .P e r m i s s i o n , a s p r a y e d f o r w i t h d r a w a l , i s g r a n t e d k e e p i n g a l l c o n t e n t i o n s o p e n f o r t h e p e t i t i o n e r s . 1 1 .T h e s e p e t i t i o n s s t a n d d i s p o s e d o f a s w i t h d r a w n . P r a y e r f o r i n t e r i m r e l i e f s t a n d s v a c a t e d f o r t h w i t h . (SONIA GOKANI,CJ) (SANDEEP N. BHATT,J) M.M.MIRZA/ M.H.DAVE Page 7 of 7 "