Delhi High Court
Daisy Distributors Pvt.Ltd. vs The Income Tax Officer Ward 7 (1) New ... on 20 November, 2024
Author: Vibhu Bakhru
Bench: Vibhu Bakhru, Swarana Kanta Sharma
IN THE HIGH COURT OF DELHI AT NEW DELHI
% Judgment delivered on: 20.11.2024
+ W.P.(C) 17326/2022
DAISY DISTRIBUTORS PVT. LTD. ..... Appellant
versus
THE INCOME TAX OFFICER WARD 7(1)
NEW DELHI ..... Respondent
Advocates who appeared in this case:
For the Appellant : Mr Kapil Goel and Mr Sandeep Goel,
Advocates.
For the Respondents : Mr Sanjay Kumar, Advocate.
CORAM
HON'BLE MR JUSTICE VIBHU BAKHRU
HON'BLE MS JUSTICE SWARANA KANTA SHARMA
JUDGMENT
VIBHU BAKHRU, J.
1. The petitioner has filed the present petition, inter alia,
impugning an order dated 24.07.2022 (hereafter the impugned order)
passed under Section 148A(d) of the Income Tax Act, 1961 (hereafter
the Act) as well as a notice dated 24.07.2022 issued under Section 148
of the Act.
2. The Assessing Officer had issued a notice dated 20.05.2022
under Section 148(A)(b) of the Act for Assessment Year (AY) 2015-
16, inter alia, stating that information was received through insight
portal from the Investigation Wing to the effect that the petitioner was
a beneficiary of accommodation entries provided by one Sh. Joginder
Pal Gupta (DAG Group). The relevant extract of the said notice is set
out below:
"GIST OF INFORMATION:
In this case information was received through Insight portal
dated: 25.03.2021 from the office of Investigation Wing,
Delhi, wherein it has been stated that during search and
seizure operation conducted on Sh Joginder Pal Gupta on
23.12.2019 in the case of DAG group of Sh Joginder Pal
Gupta. During the investigation it was established that he is
an entry provider who controlled several shell companies
and provided accomodation entry to beneficiaries. M/s Daisy
Distributors Pvt Ltd is one such beneficiary which received
Rs 3,13,00,000/- from entities (M/s Anupam Buildmart Pvt
Ltd, Nicky Marmo Ltd, Bell Indus Fibercon Pvt Ltd, Bij
Buildcon Pvt Ltd, RSKM Traders Pvt Ltd and Olwin
Garments Pvt Ltd) controlled & managed by Sh Joginder Pal
Gupta during F.Y. 2014-15 which remained unverified.
1. You are requested to submit your reply with
documentary evidences in compliance to the order of
the Hon'ble Supreme Court, referred supra, within 15
days from the date of issuance of this letter. The reply
is to be submitted electronically in e- proceedings
facility through your account in e-filling portal of
Income Tax Department.
2. Your reply, if any, will be considered before passing
order u/s 148A(d) of the Act, if deemed fit."
3. The said notice also set out the information details as available
on the insight portal. A tabular statement briefly setting out the entries
as forwarded to the petitioner along with the said notice is set out below:
Information Details
S. Source PAN Source Informatio Informatio Informatio Informatio Remarks
No PAN n FY n Type n Value n Date
. Name
1 AAFCA3263 Anupam 2014-15 Fictitious 9000000 Beneficiar
M Buildma Loan y
rt Pvt.
Ltd.
2 AAACN3607 Nicky 2014-15 Fictitious 5000000 Beneficiar
P Marmo Loan y
Ltd.
3 AAACB2764 Bell 2014-15 Fictitious 3000000 Beneficiar
K Indus Loan y
Fibreco
m Pvt
Ltd.
4 AAECB6648 Bij 2014-15 Fictitious 3000000 Beneficiar
Q Buildcon Loan y
Pvt Ltd
5 AAACE0766 RSKM 2014-15 Fictitious 2500000 Beneficiar
E Traders Loan y
Pvt Ltd
6 AAFCA3263 Anupam 2014-15 Fictitious 2800000 Beneficiar
M Buildma Loan y
rt Pvt
Ltd
7 AADCA4442 Olwin 2014-15 Fictitious 5000000 Beneficiar
Q Garment Loan y
s Pvt Ltd
4. The petitioner responded to the said notice raising several
objections including that the information reflecting an amount of
₹90,00,000/- as fictitious loan transaction with M/s Anupam Buildmart
Pvt. Ltd. was incorrect as no loan was taken from the said entity. The
petitioner also stated that the total amount of the transactions, which is
alleged to have escaped assessment, was also incorrect.
5. The petitioner acknowledged that it had received advances but
claimed that it had repaid the same and therefore, there was no credit
outstanding at the end of the financial year 2014-15. The petitioner also
forwarded copies of the ledger accounts of various entities. In addition,
the petitioner claimed that the assumption of the jurisdiction was
invalid. The petitioner claimed that since the proceedings were based
on information collected during the search of a person other than the
petitioner, the only recourse available to the Assessing Officer (AO)
was to proceed under Section 153C of the Act.
6. During the course of arguments, the learned counsel for the
petitioner confined its arguments to the question of jurisdiction of the
AO to proceed under Section 147/148 of the Act in respect of
material/information unearthed in search proceedings under Section
132 of the Act. According to the learned counsel for the petitioner, the
assessment could be opened only under Section 153C of the Act.
7. The arguments in the present petition were heard along with ITA
401/2022 captioned Principal Commissioner of Income Tax v. Naveen
Kumar Gupta as a similar issue was raised in the said appeal as well. It
was contended on behalf of the petitioner that the provisions of Section
153C of the Act override the provisions of Section 147/148 of the Act
and thus, any information obtained by the AO, which is based on the
material found during the search conducted under Section 132 of the
Act or requisition made under Section 132A of the Act, could only form
the basis of assessment under Section 153C of the Act and not under
Section 147/148 of the Act.
8. It is not disputed that in the present case, the AO was not handed
over any books of accounts or material by the AO of the searched person
(Sh. Joginder Pal Gupta of DAG Group). Thus, the necessary threshold
condition for the AO of the Assessee, initiating the proceedings under
Section 153C of the Act was not satisfied. Thus, in any event the AO
was not precluded from initiating proceedings under Section 148A of
the Act on the basis of the information available on the insight portal,
which is suggestive of the fact that the petitioner's income for AY 2015-
16 had escaped assessment.
9. The present case is covered squarely by the decision of the
Supreme Court in Principal Commissioner of Income Tax v. Abhisar
Buildwell (P.) Ltd.: (2023) 149 taxmann.com 399 (SC) as the
jurisdictional condition for the AO of the Assessee to assume
jurisdiction under Section 153C of the Act was not satisfied
10. The question whether the provisions of Section 153C of the Act
precludes recourse to reopening assessments under Section 147/148 of
the Act, on the basis of information found during the search conducted
under Section 132 or requisition made under Section 132A of Act in
respect of another person, is also covered against the petitioner by the
decision of this Court in ITA 401/2022.
11. The petition is, accordingly, dismissed.
VIBHU BAKHRU, J
SWARANA KANTA SHARMA, J
NOVEMBER 20, 2024/RK
