M/S The Indure Private Limited v. The Principal Commissioner Of Income Tax, Delhi &Anr

$~8 IN THE HIGH COURT OF DELHI AT NEW DELHI +W.P.(C) 10307/2022 M/S THE INDURE PRIVATE LIMITED ..... Petitioner Through:Mr.Sandeep Chilana withMs.Shambhavi Sinha, Mr.PriyojeetChatterjee, Mr.Shekhar Sharma andMr.Abdullah Tanveer, Advocates.Ms.Shambhavi Sinha, Mr.PriyojeetChatterjee, Mr.Shekhar Sharma andMr.Abdullah Tanveer, Advocates. versus THE PRINCIPAL COMMISSIONER OF INCOME TAX, DELHI &ANR...... RespondentsANR...... Respondents Through:Mr.Puneet Rai, senior standingcounsel for the Revenue withMs.Adeeba Mujuheed, Advocate.counsel for the Revenue withMs.Adeeba Mujuheed, Advocate. Date of Decision: 08[th]July, 2022 % CORAM:HON'BLE MR. JUSTICE MANMOHANHON'BLE MS. JUSTICE MANMEET PRITAM SINGH ARORA J U D G M E N T MANMOHAN, J (Oral): C.M.Nos.29717/2022 & 29719/2022 Exemption allowed, subject to all just exceptions.Accordingly, the applications stand disposed of.Accordingly, the applications stand disposed of. W.P.(C) No.10307/2022 & C.M.No.29718/2022 1.Present writ petition has been filed challenging the order dated 29[th]June, 2022 passed by the Respondent No. 2 under Section 148A(d) of theIncome Tax Act, 1961 (hereinafter referred to as the ‘Act’) and notice dated30[th]June, 2022 issued by the Respondent No.2 under Section 148 of the W.P.(C) No.10307/2022 Act for the Assessment Year 2013-14. Petitioner also seeks a direction tothe Respondent No. 2 to reopen the income tax portal of the PetitionerCompany and allow it three working days to file a reply to the show causenotice dated 20[th]May, 2022 and to restrain the Respondents fromcontinuing any proceedings in pursuance to impugned order dated 29[th]June, 2022 and impugned notice dated 30[th]June, 2022 during the pendencyof the present writ petition. 2.Learned counsel for the Petitioner states that the impugned order hasbeen passed by Respondent No.2 under Section 148A(d) of the Act withoutgiving the Petitioner a reasonable time of two weeks to file its objection, asdirected by the Supreme Court in Union of India & Ors. vs. AshishAggarwal 2022 SCC Online SC 543 and as requested by the Petitioner videits letter dated 25[th]May, 2022. 3.Learned counsel for the Petitioner states that the documents annexedto the notice dated 20[th]May, 2022, which were relied upon by RespondentNo.2 for alleging ‘escapement of income’ by the Petitioner Company, werecompletely illegible and unreadable. He states that the Petitioner filed apreliminary reply dated 25[th]May, 2022 requesting for legible copies of thedocuments. He states that Respondent No.2, after almost a month, vide itsemail dated 18[th]June, 2022 provided legible/readable copies of all the saidrelied upon documents along with various additional documents. 4.Learned counsel for the Petitioner states that the Petitioner Companywas under a bona fide belief that, in compliance with the order of theSupreme Court as well as its request letter dated 25[th]May, 2022, it wouldbe granted two weeks time from the date of providing the documents i.e. till02[nd]July, 2022 for responding to the notice and thereafter would be W.P.(C) No.10307/2022 Page 2 of 5 provided an opportunity of being heard. However, he states that thePetitioner Company received an email from the Respondent No.2intimating that the impugned order has already been passed on 29[th]June,2022 under Section 148A(d) of the Act. 5.Per contra, Mr.Puneet Rai, learned standing counsel for theRespondents-Revenue, who appears on advance notice, states that at theinitial stage itself, legible copies of the documents were provided to thePetitioner by the Assessing Officer.He states that out of abundantprecaution, another set of clear and legible copies of the documents wereprovided to the Petitioner on 18[th]June, 2022. W.P.(C) No.10307/2022 Page 2 of 5 provided an opportunity of being heard. However, he states that thePetitioner Company received an email from the Respondent No.2intimating that the impugned order has already been passed on 29[th]June,2022 under Section 148A(d) of the Act. 5.Per contra, Mr.Puneet Rai, learned standing counsel for theRespondents-Revenue, who appears on advance notice, states that at theinitial stage itself, legible copies of the documents were provided to thePetitioner by the Assessing Officer.He states that out of abundantprecaution, another set of clear and legible copies of the documents wereprovided to the Petitioner on 18[th]June, 2022. 6.Mr.Rai further states that the documents annexed by the Petitioner inthe present writ petition at Annexure P-10 clearly shows that the bills reliedupon by the Petitioner are fabricated inasmuch as they do not even mentionthe address and mobile number of the supplier. He states that even in thetransportation bills, the consignor address has not been mentioned. 7.It is settled law that ‘principle of natural justice is no unruly horseand no lurking land mine’ as held by Mr.Justice Krishna Iyer in Chairman, Board of Mining Examination and Chief Inspector of Mines Vs. Ramjee,(1997) 2 SCC 256. In fact, in M/s S.Tikara Vs. State of M.P. & Ors, AIR1997 SC 1691, it has been held that the principles of natural justice cannotbe petrified or fitted into rigid moulds. They are flexible and turn on thefacts and circumstances of each case. Consequently, the questions that ariseare whether there has been any unfair deal by the respondent? 8.In the present instance, one of the alleged supplier of the petitioner,Mr.Baburam Samasi, has made a statement that he had not carried out thetransactions with the petitioner which are appearing in his bank account W.P.(C) No.10307/2022 with ICICI Bank Ltd. The relevant portion of the statement made by thesupplier – Mr.Baburam Samsi is reproduced hereinbelow:- Q.8 As per information available with us, you have four bankaccounts with account numbers 019505500296; 019505003683;019505005796; 019505005822 in the name of R B Fabricationmaintained with ICICI Bank Ltd, Bisra Road, Rourkela. Pleaseconfirm. Ans: Yes, I confirm. Q.9 Kindly peruse the account statement of account number019505500296 in the name of R B Fabrication being shown toyou and confirm that the transactions appearing therein werecarried out by you. Ans: No, I have not carried out the transactions which areappearing in the bank account statement mentioned above i.e.019505500296 with ICICI Bank Ltd. Q.10 Please refer to your answer to Q. No. 8 wherein you havestated that the accounts mentioned therein belong to you.However, in answer to Q. No. 9 you are denying the facts thatyouhavecarriedouttransactionsinaccountnumber019505500296. Please explain the discrepancy.Ans: I was approached by one Sri Prabhu Agarwal, resident ofUdit Nagar, Near Malgodam Road, Rourkela who asked me toopen bank accounts with the assurance that he will help me ingetting orders for my proprietary concern R B Fabrication.Accordingly, I went with Sri Prabhu Agarwal and opened bankaccounts in ICICI Bank Ltd, Bisra Road Branch, Rourkela. TheATM Card and Cheque book issued by the bank to me was takenfrom me by Sri Prabhu Agarwal as he told that he required thesame for helping me in getting orders. All the cheque leaves weresigned by me without entering any amount or date and werehanded over to Sri Agarwal. He did not help me in getting anyorders. When I asked him to hand over the cheque leaves and theATM Card, he gave me two signed cheques of SBI withoutmentioning any amount therein and told to present the chequesafter few months. He also gave me the corresponding passbook. I W.P.(C) No.10307/2022 W.P.(C) No.10307/2022 went to SBI a few times and ascertained the balance in the saidaccount but every time I found that there was insufficient balancein the account and was unable to present the cheque. After a fewdays, Sri Agarwal became untraceable and till date hiswhereabouts are not known to me. I suspect that all the abovetransactions in the account mentioned by you in q. No 8 and 9were carried out by him.” (Emphasis supplied) 9.In view of the testimony of the supplier, this Court is of the opinionthat the matter has to proceed further. Further, even if the documents nowsought to be relied upon by the petitioner are taken into account, this Courtis of the view that the notice under Section 148 of the Act was called for –as a prima facie case of escapement of income was made out. Moreover,as it is the case of the Respondents that, in the first instance, clear andlegible copies were supplied to the Petitioner, this Court is of the opinionthat the said dispute cannot be adjudicated in the writ proceedings.10.Accordingly, the present writ petition along with pending applicationis dismissed.However, this Court clarifies that the Assessing Officer shalldecide the matter on its own merits without being influenced by anyobservation made in the present order. MANMOHAN, J JULY 08, 2022KA MANMEET PRITAM SINGH ARORA, J W.P.(C) No.10307/2022 Page 5 of 5