ADM Agro Industries Private Limited v. Deputy Commissioner of Income Tax Circle 1-1, Delhi

1. Allowed, subject to just exceptions. W.P (C) 16718/2022 & CM APPL. 52748/22 (Application filed on behalf of the petitioner seeking interim relief)

2. The present Writ Petition has been filed challenging the notice dated 26.05.2022 issued under Section 148A(b)of the Income Tax Act, 1961 (hereinafter referred as “the Act”) along with order dated 23.07.2022 passed under Section 148A(d) of the Act and the consequent notice dated 23.07.2022 issued under Section 148 of the Act by the Respondent/Revenue.

2.1. To be noted, the period under consideration is Assessment Year („AY‟) 2014-15.

3. The notice dated 26.05.2022issued under Section 148A(b) of the Act states that the Petitioner had engaged in bogus sales transaction worth Rs 9,40,58,944/- with one Mr Rohit Bharat Nilakhe (Proprietor of Adima Impex) resulting in inexplicable cash credit. The relevant extract reads as follows: “3.1Detailed perusal of information shows that Shri Rohit Bharat Nilakhe and his concerns do not have business activity as during verification proceedings it was not able to produce the bills & vouchers to establish the genuineness of his business activity. It has been established that Shri Rohit Bharat Nilakhe alongwith others is engaged in providing accommodation entries transactions of various nature. Further, it is seen that there is layering of these entries' transactions involving various individuals/concerns/accounts During the year under consideration, assessee company, i.e. M/s ADM Agro Industries India Pvt Ltd, has also undertaken entry transactions totaling to Rs 9,40,58,944/-.”

4. The Petitioner filed its objections via reply dated 10.06.2022 whereby inter-alia it was submitted that during the period under consideration i.e., AY 2014-2015, it had not undertaken any sale, purchase, loan or any other kind of transaction with Adima Impex and that it had only received an advance amounting to Rs.4,50,000/- from the said entity. Besides this, it was submitted that the reassessment proceeding was time barred.

5. The Respondent/Revenue thereafter passed the impugned order dated 23.07.2022 under Section 148A(d) of the Act and issued a consequential notice of the even date i.e., 23.07.2022 under Section 148 of the Act.

6. A perusal of the order dated 23.07.2022 passed under Section 148A(d) of the Act, shows that the Respondent/Revenue have completely ignored the response of the Petitioner and have instead simply stated that the evidences had not been filed. 6.[1] The relevant part of the aforesaid order is extracted hereinafter:

6.[2] It is contended on behalf of the Petitioner that it is not possible for the Petitioner to prove the negative and file the “evidences” which it had not been asked for.

7. We are in agreement with the Counsel for the Petitioner. Clearly, there has been non-application of mind while passing the order under Section 148 A (d) of the Act.

8. Issue notice.

8.1. Mr Zoheb Hossain accepts notice on behalf of respondent/revenue.

9. In view of the directions we propose to pass, Mr Hossain says that in the instant matter, counter affidavit is not required to be filed.

10. Having regard to the fact that the reply filed had not been considered, the impugned order and the notice issued under Section 148 of the Act of even date,i.e.,23.07.2022 are set aside. 10.[1] The matter is remitted to the Assessing Officer for a de novo hearing. 10.[2] The Assessing Officer will grant a personal hearing to the authorised representative of the Petitioner and thereafter pass a speaking order taking into account the reply filed and the submissions tendered before him.

11. The Writ Petition is disposed of in the aforesaid terms. Consequently, the pending application shall stand closed. order.