Zoom Insurance Brokers Pvt. Ltd Vs ACIT (Delhi High Court)
Conclusion: Amount of ₹82,25,822/- had already been disclosed in its return and books of account, could not be examined in writ jurisdiction. Whether the said sum represents a genuine brokerage transaction or a spurious/bogus entry was a matter of factual verification, which fell within the domain of the AO.
Held: In the instant case, the grievance of assessee was directed against the impugned notices dated 24.03.2025 and 28.05.2025 issued under Section 148A(1); the order passed under Section 148A(3); and the consequential notice issued under Section 148, all pertaining to AY 2019-20. Assessee submitted that assessee had filed its return of income on 17.10.2019 declaring an income of ₹3,06,93,740/-, which was subsequently revised on 21.12.2019 and 20.01.2020. Respondent issued notice under Section 148A(1) of the Act alleging that assessee was involved in a bogus transaction of ₹82,25,822/- with IFFCO TOKIO General Insurance Co. Ltd. (‘IFTGI’, hereinafter). Assessee filed a response on 15.04.2025. However, due to change of incumbent under Section 129, another opportunity was sought and a further reply was submitted. Respondent thereafter passed the impugned order under Section 148A(3), observing that no details of commission in terms of the percentage of premium receipts had been furnished. Assessee contended that the aforesaid amount of ₹82,25,822/- stood duly accounted for in the books of account and taxes had already been discharged thereon and was duly disclosed in the return of income. Respondent had changed its stand by holding that percentage-wise break-up of commission was not furnished, even though such details were neither called for under Section 148A(1) proceedings nor otherwise available with the respondent. Assessee stated that the re-opening of the assessment was bereft of evidence and further there was no material evidence to show that an income of more than Rs. 50,00,000/- had escaped the assessment. It was held that the contention of assessee in respect of the sum of Rs. 82,25,822/- being an amount which had been declared in books and return of income tax and as such the impugned notice which allegeed that such an amount had escaped the assessment was clearly untenable, was concerned the issue need to be seen in facts for which it was imperative that the notice was issued to elicit a reply and to check whether the sum of Rs. 82,25,822/- was a result of a spurious transaction, resulting in the income escaping assessment/Tax. Such an exercise should be undertaken by AO, and surely not by this Court. The judgment in the case of Jindal Saw Limited could be distinguished on facts in as much as the notice under Section 148A(b) was issued on account of undeclared/unexplained income whereas, assessee in that case had sufficiently explained the amount and the impugned order in that case was seen to be at variance with the allegations made in the impugned notice in the said case.
