Harsh Jindal vs ITO, Ward 48(1)

PER MADHUMITA ROY, JM:

The instant appeal filed by the assessee is directed against the order dated 12.03.2025 passed by the Commissioner of Income Tax (Appeals)-Delhi under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as 'the Act') arising out of the Assessment Order dated 19.03.2023 passed by the Assessment Unit, Income Tax Department under Section 147 r.w.s. 144 r.w.s. 144B of the Act for Assessment Year 2018-19.

The assessee, an individual, filed his return of income declaring income of Rs. 9,67,501/- including capital gains of Rs. 3,92,880/- and income from other sources of Rs. 74,823/-. On the gross total of income of Rs. 14,35,204/-, the assessee claimed deduction under Chapter VI-A of Rs. 1,65,235/- and declared ultimate taxable income of Rs. 12,69,970/- which was processed under Section 143(1) of the Act on 05.12.2018.

Subsequently, on the basis of information received through Insight Portal under the High Rish CRIU/VRU that the assessee was a beneficiary of bogus purchases amounting to Rs. 77,71,894/- from Shri Deepak Sharma, proceeding under Section 148A of the Act was initiated by serving notice upon the assessee. However, no response was made by the assessee and, therefore, finally proceeding was completed upon making addition the hands of the assessee which was is turn confirmed by the Ld. CIT(A). Hence the instant appeal before us.

The brief facts leading to this case is this that a search under Section 132 of the Act was conducted in the case of Shri Deepak Sharma Group of Mandi, Gobindgarh. Further, information was available on the official GST Portal, that two GST Nos. being 03BGPPS4292E2Z4 (Shri Salasar Balaji Industry) & 03BGPPS4292E1Z5 (GS Industries) were registered against PAN of Shri Deepak Sharma.

It is the case of the assessee that the satisfaction recorded was on the basis of his statement recorded on 14.07.2022 whereas, the reason for reopening was sought to be recorded on 17.03.2022 i.e. much prior to the statement of Shri Deepak Sharma and thus, the reassessment is void-ab-initio and liable to be quashed.

However, it appears from the records that on the basis of information available on official GST Portal, “services.gst.gov.in”. two GST numbers03BGPPS4292E2Z4 (Shri Salasar Balaji Industries) and 03BGPPS4292E1Z5 (GS Industries) were registered against PAN BGPPS4292E of Sh. Deepak Sharma. The said GST number in favour of GS Industries was cancelled by GST Authorities suo-moto w.e.f 10.10.2017. There was also allegation that the Assessee was beneficiary of bogus accommodation entries with respect to purchases made from Shri Deepak Sharma. In the form 3CD, further Shri Deepak Sharma stated that he maintains books of accounts at 431, Sector-10A, Mandi Gobindgarh, but on such books of accounts was found. It was further mentioned in Form 3CD that Shri Sharma does wholesale trading of metal and metal ores but no such goods related to the said business was found. In that view of the matter, the Ld. A.O. was of the view that no genuine business activities was undertaken by Shri Deepak Sharma at the declared business address. It further appears that during the assessment proceedings in-spite of several notices having been served, no compliance was received from the Assessee. Finally on receipt of the show cause notice, a written submission dated 02.02.2023 along with some documents that too partial compliance to the notice before under Section 142(1) of the Act was made by the Assessee. However, no explanation has been rendered by the Assessee in regard to the issues raised in show cause notice but adjournment for compliance were sought for which was also granted. However, since nothing was forthcoming from the Assessee, the assessment was finalized upon making addition in the hands of the assessee. Therefore, it is clearly evident that the Assessee never participated in the proceeding under Section 148A(b)/148A(d) of the Act.

Even before the Ld. CIT(A) no written explanation was filed by the Assessee except uploading paperbook containing documents, whereas the Assessee was granted liberty to adduce evidence in support of the case made out. We further note that the statement made by Sh. Deepak Sharma, under these facts and circumstances of the matter, having no relevance as the information from GST as narrated hereinabove which is found enough to record satisfaction of prima facie view of escapement of assessment by the Assessee and, therefore, the argument advanced by the Ld. AR that the satisfaction recorded dated 14.07.2022 was on the basis of the statement recorded on 17.03.2022 since much prior to the statement of Shri Sharma, the entire proceeding is vitiated is found to be no legs to stand upon. In that view of the matter, in our considered opinion the matter may be sent for consideration of the issue before the Ld. CIT(A). Thus, with the above observation we set aside the issues to the file of the Ld. CIT(A) for consideration of the same afresh upon granting an opportunity of being heard to the assessee. The Ld. CIT(A) is further directed to pass a reasoned order upon considering the evidences on record or any other evidence which the assessee choose to file at the time of hearing of the matter.

In the result, appeal filed by the Assessee is allowed for statistical purposes.