Sunil Kumar Jain Shrishrimal Vs the Chief Commissioner of Income Tax

Sunil Kumar Jain Shrishrimal, S/o Late Shri Mohanlal Shrishrimal, Aged about 62 years, Occupation Proprietor, M/s Saheli Jewelers, Gandhi Chowk, Durg (C.G.) - 491001 PAN No.AJCPS2009Q

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(Petitioner)

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... Appellant

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versus

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The Chief Commissioner of Income Tax, Central Revenue Building, Raipur (C.G.)

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Deputy Commissioner of Income Tax Circle-1(1), Bhilai (C.G.) - 490031

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Assistant Commissioner of Income Tax, Circle-1(1), Income Tax Office 32/32 Bungalows, Bhilai (C.G.) - 490031

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National Faceless Assessment Centre, New Delhi.

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... Respondents

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For Appellant / : Mr. Ganesh Purohit, Senior Advocate through Video Assessee Conferencing with Mr. Anand Dadariya, Advocate. For Respondents / : Mr. Amit Chaudhari, Senior Standing Counsel for Revenue the Income Tax Department and Mr. Ajay Kumrani, Advocate.

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Division Bench: - Hon'ble Shri Sanjay K. Agrawal and Hon'ble Shri Sanjay Kumar Jaiswal, JJ.

Page 2 of 11

(W.A.No.412/2023)

CAV Order

Sanjay K. Agrawal, J.

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The appellant herein/assessee has preferred this writ appeal calling in question legality, validity and correctness of order dated 25-72023 passed by the learned Single Judge in W.P.(T)No.183/2023, by which the learned Single Judge has declined to quash the notice issued on 26-6-2023 under Section 148 along with order passed Section 148A(d) of the Income Tax Act, 1961 (for short, ‘the IT Act’) finding no merit.

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The aforesaid challenge has been made on the following factual backdrop: -

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On the basis of information received by the Assessing Officer on sight Portal of ITBA (Income Tax Business Application), notice under Section 148A(b) of the IT Act was issued to the assessee/ appellant herein along with the information on 27-3-2023 to which the assessee filed reply before the Assistant Commissioner of Income Tax on 3-4-2023 and order under Section 148A(d) was passed by the Assistant Commissioner of Income Tax on 10-4-2023 and thereafter, on 10-4-2023 notice under Section 148 was issued to the assessee after getting approval from the competent authority leading to filing of W.P.(T)No.119/2023. The learned Single Judge by order dated 4-5-2023, allowed the writ petition and set aside the order dated 10-4-2023 passed under Section 148A(d) of the IT Act and remitted the matter to the respondents herein for passing

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Page 3 of 11

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(W.A.No.412/2023)

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order afresh on the notice under Section 148A(b) after supplying all the relevant materials and information to the assessee in light of the decision rendered by the Supreme Court in the matter of Union of India and others v. Ashish Agarwal 1.

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It is the case of the Revenue that in compliance of order dated 4-52023 passed by the learned Single Judge, all the relevant materials and information were supplied and received by the assessee on insight portal of ITBA and the assessee was requested to submit his reply on or before 25-5-2023. However, the assessee sought legible copies of statement of Shri Nitin Sankhla and the basis for calculation of the amount of ₹ 60,33,02,548/- which were supplied to the assessee and thereafter, after due formalities, order dated 26/27-6-2023 under Section 148A(d) of the IT Act was passed and notice under Section 148 of the IT Act was issued after fulfilling all the mandatory conditions stipulated in the IT Act and duly following the instructions of the Central Board of Direct Taxes (CBDT) issued under Section 119(1) of the IT Act, which was challenged by the assessee again in W.P.(T)No.183/2023 which the learned Single Judge this time, dismissed relegating the assessee to file reply before the Assessing Officer, by order dated 25-7-2023. Feeling aggrieved and dissatisfied with the order of the learned Single Judge, the appellant herein/assessee has preferred this writ appeal before this Court.

1 (2023) 1 SCC 617

Page 4 of 11

(W.A.No.412/2023)

On 1-4-2025, Mr. Ganesh Purohit, learned Senior Counsel appearing on behalf of the appellant herein/assessee, had submitted before this Court that he is not pressing the issue with regard to applicability of Section 151A of the IT Act.

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In light of the above-stated submission, the appeal is taken-up for hearing.

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Mr. Ganesh Purohit, learned Senior Counsel appearing on behalf of the appellant herein/assessee, would submit as under: -

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The requested material was not supplied as per letter dated 26-5-2023 and the material for computation of alleged bogus purchase of ₹ 60,33,02,548/- was neither supplied nor available on record and therefore, no reply to letter dated 265-2023 could be filed which resulted in denial of opportunity to submit reply of notice under Section 148A(d) of the IT Act. Reliance has been placed in the matters of Anurag Gupta v. Income-tax Officer and others 2, Smt. Vasanthi Ramdas Pai v. The Income Tax Officer and others 3, Ankit Agarwal v. The Principal Chief Commissioner of Income Tax Bihar and Jharkhand and others 4 and The Principal Commissioner of Income Tax-I v. Shri Pukhraj Soni 5.

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2 2023 SCC OnLine Bom 601

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3 WP No.8797/2022, decided on 12-2-2024 (Karnataka High Court)

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4 Civil Writ Jurisdiction Case No.5202/2024, decided on 18-4-2025 (Patna High Court)

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5 I.T.A.No.53/2017, decided on 6-2-2019 (MP High Court)

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Page 5 of 11

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(W.A.No.412/2023)

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Notice under Section 148 and order under Section 148A(d) of the IT Act was barred by limitation provided under Section 149 of the IT Act.

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Notices, approvals, orders and communications are without Document Identification Number (DIN) and are in violation of the CBDT circular No.19/2019 dated 14-8-2019. Reliance has been placed in the matters of Hexaware Technologies Ltd. v. Assistant Commissioner of Income Tax and others 6, Principal Commissioner of Income-tax v. Tata Medical Centre Trust 7, Commissioner of Income-tax v. Laserwords US Inc. 8, Commissioner of Income-tax (International Taxation) v. Brandix Mauritius Holdings Ltd. 9 and Tata Chemicals Limited v. Commissioner of Customs (Preventive), Jamnagar 10.

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The order made under Section 148A(d) of the IT Act has not followed the guidelines of the CBDT as provided in instruction dated 1-8-2022 and reliance has been placed in the matter of Commissioner of Income Tax v. Sun Engineering Works (P) Ltd. 11.

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As such, the appeal be allowed and the order of the learned Single Judge be set aside.

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6 (2024) 8 NYPCTR 575 (Bom)

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7 (2023) 459 ITR 155 : 2023 SCC OnLine Cal 5764

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8 [2025] 175 taxmann.com 920 (Madras)

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9 (2023) 456 ITR 34 : 2023 SCC OnLine Del 6481

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10 (2015) 11 SCC 628

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11 (1992) 4 SCC 363

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Page 6 of 11

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(W.A.No.412/2023)

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Mr. Amit Chaudhari, learned Senior Standing Counsel for the Income Tax Department/Revenue/respondents herein, would submit that in compliance of the order dated 4-5-2023 passed by the learned Single Judge in W.P.(T)No.119/2023, all the relevant materials and information have been supplied to the assessee vide communication dated 15-5-2023, copy of which has been filed as Annexure P-8 to the writ petition. He would further submit that since the present matter pertains to a non-PAN case, proceedings under Section 148A of the IT Act could not be initiated through the ITBA portal. Consequently, no DIN number has been mentioned, in view of the exception provided under Circular No.19/2019 dated 14-8-2019. He would also submit that a draft order under Section 148A(d) of the IT Act was sent along with the necessary proforma for approval of the Specified Authority i.e. the Chief Commissioner of Income Tax, Raipur and after going through the entire material/ information and draft order, the CCIT, Raipur has accorded approval for issuance of notice under Section 148 of the IT Act. With regard to limitation, learned Senior Standing Counsel for the Income Tax Department has submitted that reopening has been initiated on the basis of credible and specific information received through the Insight Portal, flagged as High Risk CRIU/VRU, clearly indicating bogus purchases to the tune of ₹ 60.33 crores from M/s. Navkar Jewellers, Durg and since the income escaping assessment exceeds ₹ 50 lakhs for the relevant assessment year, the case squarely falls within the extended time limit of ten years as

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Page 7 of 11

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(W.A.No.412/2023)

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provided under Section 149(1)(b) of the IT Act and therefore the issuance of notice is well within the statutory framework and cannot be said to be barred by limitation.

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We have heard learned counsel for the parties and considered their rival submissions made herein-above and also gone through the record with utmost circumspection.

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This is the second round of litigation. In the first round of litigation, the learned Single Judge by order dated 4-5-2023, as noticed herein-above, passed order quashing the order dated 10-42023 passed under Section 148A(d) of the IT Act as also the notice dated 10-4-2023 issued under Section 148 of the IT Act and remitted the matter to the concerned authority to supply all the relevant materials and information relied upon by the Revenue keeping in view the observations made by their Lordships of the Supreme Court in Ashish Agarwal (supra). It is the case of the Revenue that the requisite material has been supplied in compliance of the order dated 4-5-2023 which has been annexed with the writ petition as Annexure P-8 (pages 91 to 110 of the paper book) and it is the stand of the Revenue that on 15-5-2023, complete information/material was duly provided to the assessee which has been received on Insight Portal of ITBA and the assessee was also requested to submit reply on or before 25-5-2023, however, the assessee was not satisfied and sought more information.

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Page 8 of 11

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(W.A.No.412/2023)

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In this regard, the decision of the Supreme Court in the matter of Raymond Woollen Mills Ltd. v. Income-tax Officer 12 may be noticed herein in which their Lordships of the Supreme Court have observed that at the initial stage, the Court has only to see whether there was prima facie some material on the basis of which the Department could reopen the case and the sufficiency or correctness of the material is not a thing to be considered at this stage. Their Lordships declined to struck down the reopening of case under Section 147(a) of the IT Act, and held as under: -

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“In this case, we do not have to give a final decision as to whether there is suppression of material facts by the assessee or not. We have only to see whether there was prima facie some material on the basis of which the Department could reopen the case. The sufficiency or correctness of the material is not a thing to be considered at this stage. We are of the view that the court cannot strike down the reopening of the case in the facts of this case. It will be open to the assessee to prove that the assumption of facts made in the notice was erroneous. The assessee may also prove that no new facts came to the knowledge of the Income-tax Officer after completion of the assessment proceeding. We are not expressing any opinion on the merits of the case. The questions of fact and law are left open to be investigated and decided by the assessing authority. The appellant will be entitled to take all the points before the assessing authority. The appeals are dismissed. There will be no order as to costs.”

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Furthermore, in the matter of Anshul Jain v. Principal Commissioner of Income-tax 13, the Division Bench of the Punjab and Haryana High Court (writ Court) has declined to interfere in the order passed under Section 148A(d) of the IT Act making it open to the assessee to raise all the grounds of challenge

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12 [1999] 236 ITR 34 (SC)

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13 [2022] 143 taxmann.com 37 (Punj. & Har.)

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Page 9 of 11

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(W.A.No.412/2023)

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to such order in the reassessment proceedings consequent to the notice issued under Section 148 of the IT Act relying upon the decision of the Supreme Court in Raymond Woollen Mills Ltd. (supra) and observed as under: -

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“8. Thus, the consistent view is that where the proceedings have not even been concluded by the statutory authority, the writ Court should not interfere at such a pre-mature stage. Moreover it is not a case where from bare reading of notice it can be axiomatically held that the authority has clutched upon the jurisdiction not vested in it. The correctness of order under section 148A(d) is being challenged on the factual premise contending that jurisdiction though vested has been wrongly exercised. By now it is well settled that there is vexed distinction between jurisdictional error and error of law/fact within jurisdiction. For rectification of errors statutory remedy has been provided.

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In the light of aforesaid settled proposition of law, we find that there is no reason to warrant interference by this Court in exercise of the jurisdiction under Article 226/227 of the Constitution of India at this intermediate stage when the proceedings initiated are yet to be concluded by a statutory authority. Hence the writ petition stands dismissed.”

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When the matter was taken-up by the Revenue before the Supreme Court against the decision of the Punjab and Haryana High Court, the Supreme Court in the matter of Anshul Jain v. Principal Commissioner of Income-tax 14 has declined to interfere in the

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order of the High Court/writ Court and observed as under: -

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“1. What is challenged before the High Court was the reopening notice under section 148A(d) of the Income-tax Act, 1961. The notices have been issued, after considering the objections raised by the petitioner. If the petitioner has any grievance on merits thereafter, the same has to be agitated before the Assessing Officer in the re-assessment proceedings.

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14 [2022] 449 ITR 256 (SC)

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Page 10 of 11

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(W.A.No.412/2023)

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Under the circumstances, the High Court has rightly dismissed the writ petition.

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No interference of this Court is called for.

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The present Special Leave Petition stands dismissed.”

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14.Thus, in view of the decision of the Supreme Court in Raymond Woollen Mills Ltd. (supra) followed by the Punjab and Haryana High Court in Anshul Jain 13 (supra) and that has been further affirmed by the Supreme Court in Anshul Jain 14 (supra), we are of the considered opinion that the sufficiency or correctness of the material cannot be gone into at this stage and it is open to the assessee to prove all the facts and demonstrate that the notice issued is erroneous and all the pleas which were sought to be taken regarding limitation can be taken before the Assessing Officer, as the Department has shown prima facie material on the basis of which reopening of the assessment is sought.

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15.All the decisions cited by learned Senior Counsel appearing on behalf of the appellant herein/assessee starting from Anurag Gupta 2 (supra) to Sun Engineering Works (P) Ltd.’s 11 case (supra) are clearly distinguishable on facts of the present case.

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16.In that view of the matter, we do not find any merit in the writ appeal, it deserves to be and is accordingly dismissed with no order as to cost(s).

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17.It is made clear that we have not expressed any opinion on the merits of the matter and the question of law and fact is left open to be considered and decided by the assessing authority. The

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Page 11 of 11

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(W.A.No.412/2023)

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appellant will be entitled to raise all the points that have been raised in the writ petition and in the writ appeal before the

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assessing authority.

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Sd/Sd/(Sanjay K. Agrawal) (Sanjay Kumar Jaiswal) Judge Judge

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Soma

Sunil Kumar Jain Shrishrimal v. the Chief Commissioner of Income Tax

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Sunil Kumar Jain Shrishrimal v. the Chief Commissioner of Income Tax

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