Gujarat High Court Sets Aside Section 148A(d) Order Passed Without Considering Assessee’s Evidence

The petitioner, an individual engaged for over two decades in the steel products business under the name “Suri Rajendra Metal,” filed his return for AY 2018-19, declaring income of Rs. 8,11,720/-. During the assessment of Bhagwati Fastners Pvt. Ltd. for the same year, the department noted that the petitioner supposedly failed to respond to a notice under Section 133(6) regarding purchase transactions of Rs. 19,05,157/-. Based on this, a notice under Section 148A(b) dated 09.03.2022 was issued alleging the purchases were non-genuine.

The petitioner filed objections stating that no Section 133(6) notice was ever served on him. Despite the assessee submitting the detailed records, the AO passed an order under Section 148A(d) as the petitioner failed to respond to a Section 133(6) notice and issued notice under Section 148.

Issue Raised: Whether the Assessing Officer’s order under Section 148A(d) was valid when the AO failed to consider the detailed documentary evidence submitted by the assessee establishing the genuineness of the purchase transactions.

Court’s Ruling: The Hon’ble High Court held that the impugned S. 148A(d) order suffered from complete non-application of mind. The AO did not consider any of the supporting documents that were produced both before the AO and in the writ petition. When questioned by the Court, the Department was unable to show that these materials were examined.

The Court quashed both the 148A(d) order and the Section 148 notice, and remanded the matter to the Assessing Officer for fresh consideration. The AO was directed to decide the matter afresh within 12 weeks, keeping in view that the petitioner’s documents remain uncontroverted and no additional material has been produced by the Department.

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