ITO Vs Satkar Caterers Pvt. Ltd. (ITAT Raipur)
Summary: The Raipur Bench of the Income Tax Appellate Tribunal has dismissed the Revenue’s appeal in the case of ITO, Ward 2(1), Bhilai Vs. Satkar Caterers Pvt. Ltd. for Assessment Year 2015-16 after quashing the reassessment proceedings on the ground that the sanction for issuing the notice under section 148 was obtained from the PCIT instead of the competent authority, the Joint Commissioner, under the old section 151 regime.
The assessee had filed its return on 05.11.2015 declaring total income of Rs.9,44,260/-. The Assessing Officer reopened the assessment after information was received regarding an alleged bogus billing accommodation entry of Rs.1,79,13,000/- through Silverlake Marketing Pvt. Ltd., stated to be a shell company connected with the Bathwal group and entry operator Shri Ajit Kumar Jindal. Notice under section 148 was issued on 31.03.2021. In the reassessment, the assessee denied having any transaction with Silverlake Marketing Pvt. Ltd. The Assessing Officer nevertheless made an addition of Rs.1,79,13,000/- under section 69A and Rs.7,16,520/- under section 69C, determining total income at Rs.1,95,73,780/-.
The CIT(A), after calling for and considering a remand report and the assessee’s rejoinder, deleted both additions. The CIT(A) found that the Assessing Officer had not produced evidence of any corresponding bank account or book entry of the assessee; had not established how the Investigation Wing enquiry was linked to the assessee; and had relied upon an Axis Bank account which had already been closed in 2009. The CIT(A) also noted that the DCB Bank narration in the account of Silverlake Marketing Pvt. Ltd. referred to “Satkar Caterers” and not “Satkar Caterers Pvt. Ltd.” The assessment order was also found to lack clarity regarding the transaction, bank accounts and the applicable statutory provision. The CIT(A) consequently held the additions to be baseless and without documentary evidence.
