Suhel Khan V. Assessment Unit, National Faceless Assessment Center, Income Tax Department, Ministry of Finance, Delhi

WP/11758/2024

AI Insights

In this writ petition, the petitioner, Suhel Khan, challenged an assessment order by the National Faceless Assessment Center, which deemed his purchases as non-genuine due to lack of documentation. The Assessing Officer had added the expenses for these purchases back to the income of the petitioner, citing failure to substantiate the genuineness of the purchases and the nexus between purchases and sales. The petitioner argued that he could provide sufficient documentation, including GST returns and invoices, to prove the genuineness of the purchases if given another opportunity. The court, considering the submissions and the documents presented, decided to set aside the previous order and remand the case for further assessment, allowing the petitioner to substantiate his claims.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 799592 (HC-KARNATAKA)
• Appeal Type: Others
• Pronouncement Date: 23-07-2024
• Assessment Year: misc
• Laws Referred To: Articles 226 and 227 of the Constitution of India, Section 143(3) r.w.s. 144B of the Act
• Result in Favour of: Others
• Court: HIGH COURT
• Department Lawyers: E I SANMATHI
• Assessee Lawyers: CHANDRASHEKAR
• Keywords: Assessment Order; Genuineness of purchases; Income Tax; Non-genuine purchases; Writ petition
• Section: 143(3); 144B

Judgement Text

" - 1 - NC: 2024:KHC:28983 WP No. 11758 of 2024 IN THE HIGH COURT OF KARNATAKA AT BENGALURU DATED THIS THE 23RD DAY OF JULY, 2024 BEFORE THE HON'BLE MR JUSTICE S SUNIL DUTT YADAV WRIT PETITION NO. 11758 OF 2024 (T-IT) BETWEEN: SUHEL KHAN, S/O SARDAR KHAN, AGED ABOUT 32 YEARS, SEETHANAYAKANAHALLI VILLAGE, HOSAKOTE POST, LAKKUR HOBALI, MALUR TALUK, KOLAR DISTRICT - 563 130. FACTORY AT PLOT NO. 31, PART-4, 4TH PHASE INDUSTRIAL AREA, SY. NOS. 113 AND 114, H-HOSKOTE VILLAGE, KASABA HOBLI, MALUR TQ, KOLAR DISTRICT - 563 130. …PETITIONER (BY SRI. CHANDRASHEKAR, ADVOCATE FOR SRI. R. RAMAMURTHY, ADVOCATE) AND: ASSESSMENT UNIT, NATIONAL FACELESS ASSESSMENT CENTER, INCOME TAX DEPARTMENT, MINISTRY OF FINANCE, DELHI - 110 001. …RESPONDENT (BY SRI. E.I. SANMATHI, ADVOCATE) Digitally signed by YAMUNA K L Location: High Court of Karnataka - 2 - NC: 2024:KHC:28983 WP No. 11758 of 2024 THIS WP IS FILED UNDER ARTICLES 226 AND 227 OF THE CONSTITUTION OF INDIA PRAYING TO QUASH THE ORDER OF ASSESSMENT DATED 20/03/2024 MADE U/S 143(3) R.W.S. 144B OF THE ACT DIN: ITBA/AST/S/143(2)2023- 24/1063002304(1) (ANNEXURE-G) TO THIS WP AND ETC., THIS PETITION, COMING ON FOR PRELIMINARY HEARING, THIS DAY, ORDER WAS MADE THEREIN AS UNDER: CORAM: HON'BLE MR JUSTICE S SUNIL DUTT YADAV ORAL ORDER (PER: HON'BLE MR JUSTICE S SUNIL DUTT YADAV) The petitioner has sought for setting aside of the order at Annexure-G, whereby the assessing authority while considering the claim of purchases made, has recorded that in the absence of documentation, genuineness of the purchases are deemed to be not proved. 2. The Assessing Officer has treated the purchases as the non-genuine purchases for the year under consideration and that assessee's claim to establish the nexus between purchases and sales claimed by him is not established. It is further observed that the assessee was - 3 - NC: 2024:KHC:28983 WP No. 11758 of 2024 required to furnish daily stock register and other documents to establish the genuineness of the sales. 3. The Assessing Officer has concluded that the assessee has failed to substantiate its out of books sale of unaccounted goods. While holding that the purchases are bogus, the expenses for purchases claimed by the assessee were added back to the income of the assessee. 4. Learned counsel for the petitioner submits that matter may be relegated and assessee be provided an opportunity for substantiating genuineness of such purchases and has also filed the memo along with screenshots to demonstrate that the vendors have filed GST returns for relevant assessment year 2022-23 which is the assessment year in question. It is further submitted that the petitioner would produce invoice, e-way bill and weigh bridge bill for each of the transactions, if an opportunity is granted. - 4 - NC: 2024:KHC:28983 WP No. 11758 of 2024 5. Learned counsel appearing for the revenue submits that such exercise ought to have been made before the Assessing Officer and documents can also be produced before the first Appellate authority. 6. However, after hearing the petitioner and taking note of the observations made in the assessment order as referred to above, the petitioner may be permitted to demonstrate genuineness of the purchases by relying upon documents, some of which are produced along with the memo. It must be noticed that the grievance of the petitioner is as regards adding of expenses to the income and in light of the submissions made that he has documents to prove genuineness of such purchases and taking note of the memo and documents filed along with the memo, it would meet ends of justice by affording an opportunity to the petitioner to participate in the assessment proceedings before the Assessing Officer and produce documents to demonstrate genuineness of sales. - 5 - NC: 2024:KHC:28983 WP No. 11758 of 2024 7. Accordingly, the order at Annexure-'G' is set aside and matter is remitted to the stage post show cause notice. The petitioner is at liberty to produce documents for the purpose of demonstrating genuineness of the sales, as submitted. All contentions are kept open. 8. Accordingly, petition is disposed off. Sd/- (S SUNIL DUTT YADAV) JUDGE MCR "