Ojaswini Retailers Private Limited & anr. Vs Union of India & Ors. (Calcutta High Court)
Calcutta HC quashed the Section 148A(3) order and Section 148 notice after finding the assessee’s replies were not fully considered before reopening.
The principal issue before the Court was whether the Assessing Officer had validly formed the opinion that income had escaped assessment without considering the replies and materials submitted by the petitioners and whether the principles of natural justice had been violated.
The petitioners contended that the order dated 30.06.2025 suffered from legal infirmity as it was passed without considering their replies dated 14.04.2025 and 19.06.2025 filed in response to the show cause notice dated 19.03.2025 issued under Section 148A(1). They further submitted that the finding that transactions with M/s. Fantastic Hirise Private Ltd. and M/s. Foremost Enterprise Private Ltd. lacked commercial substance was perverse, arbitrary and unsustainable in law.
The petitioners argued that the order had been passed in violation of the principles of natural justice as they were not given an effective opportunity to rebut the allegations despite submitting banking statements and other documents. According to the petitioners, the transactions had been carried out through legitimate banking channels, and they had produced the bank statements of their accounts with Federal Bank Ltd. and of M/s. Foremost Enterprise Private Ltd. with IDBI Bank. They contended that mere routing of funds on the same day could not by itself lead to the conclusion that the transactions constituted accommodation entries or money laundering and sought setting aside of both the order under Section 148A(3) and the consequential notice under Section 148.
