Priya Blue Industries Private Limited Vs ACIT (Gujarat High Court)
Reassessment Notice Valid Despite Earlier Scrutiny Assessment When Fresh Investigation Material Emerges; Gujarat HC Says Filing TCS Returns Alone Does Not Establish Genuine Transactions in Reopening Case; Assessment Reopening Beyond Four Years Sustained Due to Alleged Failure to Fully Disclose Facts; Gujarat HC Refuses to Quash Section 148 Notice Based on Investigation Wing Information.
The Gujarat High Court heard a writ petition filed by an assessee company engaged in ship-breaking business challenging a notice dated 30.03.2019 issued under Section 148 of the Income Tax Act for Assessment Year 2012-13. The notice was issued on the ground that income chargeable to tax had escaped assessment within the meaning of Section 147 of the Act.
Read SC Judgment: SC Dismisses Challenge to Reassessment Reopening Based on Alleged Accommodation Entries
The petitioner stated that during the relevant financial year, it had made total sales of Rs.26,266.19 lakh, including sales to M/s. Harsh Enterprise. According to the petitioner, the entire sales proceeds had been received during the year and duly reflected in audited annual accounts. The original assessment had been completed under Section 143(3) after scrutiny, during which the Assessing Officer called for various details, including details pertaining to TCS. The petitioner supplied E-TCS returns and transaction registers that included details of sales made to M/s. Harsh Enterprise. The petitioner contended that despite full disclosure of facts during the original assessment, the department reopened the assessment alleging that the petitioner had received accommodation entries amounting to Rs.1,06,16,632 from M/s. Harsh Enterprise.
