Venus Infrabuild Vs DCIT (Gujarat High Court)
Summary: The Gujarat High Court quashed the show-cause notice and order issued under Section 148A of the Income Tax Act, 1961 against Venus Infrabuild, holding that mere suspicion without supporting material could not justify reopening of assessment. Special Civil Application No.14402 of 2025 was taken as the lead matter in a group of writ petitions involving the same issue. The petitioner, a partnership firm engaged in development and construction, had been issued a show-cause notice dated 13.03.2025 under Section 148A(1) on the basis of a Suspicious Transaction Report prepared by the Deputy Director of Income Tax (Investigation). The STR flagged huge credits, high-value non-cash transactions and routing of funds, reporting total credits of Rs.89.86 crores and total debits of Rs.89.77 crores. The petitioner furnished detailed replies dated 29.03.2025 and 09.04.2025 with audited financial statements, partners’ capital accounts, tax audit reports and transaction details. The Assessing Officer nevertheless concluded that income chargeable to tax amounting to Rs.61,83,23,518/- had escaped assessment. The Court found that the Assessing Officer had failed to address the petitioner’s reply and documentary evidence and had not been shown any material indicating that the transactions were bogus or accommodation entries. The Court accordingly quashed the impugned show-cause notice and order.
