Reassessment Notice based on primacies material related to bogus purchases is valid

Jugal Kishore Paliwal Vs JCIT (Chhattisgarh High Court)

Conclusion: In reassessment it is only required to see whether there is prima facie material before the Assessing Officer to initiate proceedings and other requirements under the law, pre­condition i.e. of taking approval/sanction under Section 151, before issuance of notice under Section 148 is followed or not. Whether there is prima facie material available on the basis of which department can reopen case and not sufficiency or correctness of material to be considered.

Held: Assessee was engaged in the business of running rice mill. AO issued notice under section 148 on the ground that information was received from Income Tax Officer which revealed that assessee had done transactions with bogus entities and also obtained bogus purchase bills. Assessee challenged validity of Reassessment notice u/s 148 on account of bogus purchases of Rice, defects alleged in sanction u/s 151, issue of notice and reasons recorded. It was held that the Court brushed aside all these arguments by relying on the decision in the case of Phoolchand Bajranglal , Raymonds Woolen Mills etc.

Moreover, the Court also interpreted Section 282A dealing with authentication of documents by the department by observing that every notice or other document to be issued, served or given for the purpose of this Act by any Income Tax authority shall be deemed to be authenticated if name and office of designated income tax authority is printed/stamped or otherwise written thereon. In the ‘Note’ appended at the bottom of sanction/approval under Section 151 of the Act of 1961, it is mentioned that “if digitally signed”, the date of signature may be taken as date of document. Based on the Notification No.4/2017 dated 03.04.2017 documents granting sanction/approval under Section 151 could not be said to be an unauthenticated document.

FULL TEXT OF THE JUDGMENT/ORDER OF CHHATTISGARH HIGH COURT

Please become a Premium member. If you are already a Premium member, login here to access the full content.