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Case Law Details

Case Name : Chetak Enterprises Ltd. Vs ACIT (Rajasthan High Court)
Appeal Number : D.B. Civil Writ Petition No. 7062/2022
Date of Judgement/Order : 20/03/2023
Related Assessment Year :
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Chetak Enterprises Ltd. Vs ACIT (Rajasthan High Court)

In the case of Chetak Enterprises Ltd. vs. ACIT, the Rajasthan High Court dealt with the validity of reassessment proceedings initiated for the assessment year 2018-2019. Here’s a detailed summary:

The petitioner, Chetak Enterprises Ltd., initially underwent scrutiny assessment under Section 143(3) of the Income Tax Act, 1961 for the assessment year 2018-2019, wherein an income of Rs. 42.44 crores was declared. Subsequently, based on information obtained from a search and survey action on APCO Infratech Private Limited and associates, the assessing officer invoked Section 148A of the Act to reopen the assessment. This action was purportedly due to alleged circular transactions involving bogus invoicing between Chetak Enterprises Ltd. and APCO Infratech Private Limited, aimed at inflating turnover without actual execution of work.

Chetak Enterprises Ltd. challenged the reopening of assessment as illegal, contending that all relevant information had been disclosed during the original assessment. They argued that the subsequent search and survey on APCO Infratech Private Limited did not justify the reopening under Sections 148A and 147 of the Act.

The respondent, on the other hand, asserted that new evidence from the search and survey revealed prima facie evidence of circular transactions through fake invoices, impacting Chetak Enterprises Ltd.’s income assessment for 2018-2019. They argued that this constituted sufficient grounds to invoke reassessment proceedings under the Act.

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