Gopallal Mathurdas Vaishnav Vs ITO (ITAT Ahmedabad)
Section 148 Reassessment Quashed for Non-Compliance with Section 148A Procedure; Bogus Purchase Addition Deleted: ITAT Ahmedabad
The ITAT Ahmedabad examined whether reassessment under the post-2021 framework was valid where the Assessing Officer relied on general information from the Investigation Wing without conducting the inquiry contemplated under Section 148A and whether purchases could be disallowed despite documentary evidence and accepted sales. The Tribunal held that Section 148A requires the Assessing Officer to independently examine the information, conduct inquiry wherever necessary, disclose the information and material relied upon, consider the assessee’s reply, and pass a reasoned order. In this case, the notice under Section 148A(b) contained only general allegations without identifying specific transactions, no independent inquiry was conducted, and additional reasoning relied upon in the order under Section 148A(d) had not been disclosed to the assessee. The Tribunal found that reopening was based on vague and unverified Investigation Wing information. On merits, it noted that the GST proceedings relied upon had ended with acceptance of the assessee’s explanation, the assessee had furnished documentary evidence including GST records, invoices, e-way bills, transport documents, stock records and bank statements, no defects were identified in those documents, and the corresponding sales had been accepted. Accordingly, the Tribunal quashed the order under Section 148A(d), the notice under Section 148, the consequential reassessment proceedings, deleted the additions relating to alleged bogus purchases, set aside the CIT(A)’s order, and allowed both appeals.
