Reopening relying on information flagged by GST department that the supplier is a dummy/non-existent entity quashed by ITAT
Delhi High Court quashes reassessment proceedings initiated by AO on allegation of bogus purchases by simply relying on information flagged by GST department that the supplier is a dummy/non-existent entity, ignoring the evidences brought on record by the assessee in reply to notice under section 148A(b) to demonstrate the genuineness of purchases.
HC observes, inter-alia, that:
1. Assessee has made direct sales in respect of purchases made and shown profit in respect of the same. In such a case, if purchases are considered non-existent, sales would also have to be considered non existent. Thus, there can be no question of escapement of income.
2. Assessee has provided all possible evidences (invoices, e-way bills, toll tax receipts, details of corresponding sales, etc) which have not been controverted in the order under section 148A(d) and proceedings have been initiated by simply reiterating information on portal.
3. AO cannot disregard the evidences and simply reiterate the information available on the portal. That will render the procedure under section 148A as meaningless
4. Another AO has dropped reassessment proceedings in case of another assessee who had made purchases from same supplier. Hence, a contrary view on facts that supplier is bogus without any further material would not be warranted.
The copy of the order is as under:
