RNT Metals Pvt Ltd Vs DCIT (ITAT Delhi)
Summary: The Delhi Bench of the Income Tax Appellate Tribunal disposed of three appeals of RNT Metals Pvt Ltd for AYs 2021-22 to 2023-24 and a connected appeal of its director Archit Jain. For AY 2021-22, the Tribunal quashed the reopening because the Section 148 notice dated 25.07.2023 did not afford the statutory period required for furnishing the return. Following DCIT vs Anand Kumar Agarwal, the Tribunal treated the defect as jurisdictional and held that the reopening itself could not survive. The appeal for AY 2021-22 was accordingly allowed.
For AY 2022-23, the Tribunal noted that a search under Section 132 had been conducted at the assessee’s premises and held that the regular assessment subsequently framed under Section 143(3), without initiating proceedings under Section 148, could not be sustained. Relying upon Montage Enterprises (P) Ltd. and the line of authorities concerning the special post-search assessment mechanism, the Tribunal quashed the regular assessment dated 31.03.2024. All remaining grounds on merits consequently became academic.
For AY 2023-24, the dispute concerned alleged bogus purchases of Rs.28 lakh and seized cash of Rs.7.68 lakh. The Tribunal observed that corresponding sales had not been questioned and that, in the assessee’s wholesale industrial-chemical business, purchases from unregistered dealers could not altogether be ruled out. Considering divergent judicial precedents, it restricted the disputed purchase adjustment to a lumpsum gross-profit disallowance of 5% of Rs.28 lakh, expressly directing that the determination should not be treated as a precedent. rnt-metals-pvt-ltd-702072 On the seized cash issue, the Tribunal fixed the addition at Rs.2 lakh, thereby granting relief of Rs.5.68 lakh. The company’s AY 2023-24 appeal was therefore partly allowed.
