JUDGMENT : Bhargav D. Karia, J. 1. Heard learned advocate Mr. S.N. Divatia for the petitioner and learned advocate Mr. Karan Sanghani for learned advocate Ms. Kalpana K. Raval for the respondent. 2. Having regard to the issue involved in this petition which is in a very narrow compass, with the consent of the learned advocates for the respective parties, the matter is taken up for hearing. 3. Rule returnable forthwith. Learned advocate Mr. Karan Sanghani waives services of notice of rule on behalf of the respondent. 4. By this petition under Article 226 of the Constitution of India, the petitioner has prayed for quashing and setting aside the order dated 29.03.2024 passed under section 148A(d) of the Income Tax Act, 1961 (For short “the Act”) for Assessment Year 2018-2019 as well as notice under section 148 of the Act issued on 29.03.2024 for AY 2018-2019. 5. Brief facts of the case are that the petitioner is a partnership firm which was constituted as per the partnership deed executed on 01.04.2017 to carry on the business of trading of cotton yarn and spare parts of textiles machinery related products. 6. The petitioner filed its e-ITR for Assessment Year 2018-2019 on 17.07.2018 declaring total income of Rs.8,64,480/-. 7. Respondent issued notice under section 148A(b) on 23.02.2024 calling upon the petitioner to show cause as to why the notice under section 148 of the Act should not be issued and was further asked to furnish response on or before 04.03.2024. The reasons given by the respondent Assessing Officer to come to the conclusion that it is a fit case to reopen the assessment as under : “4. In response to the above, the assessee furnished the response on 04/03/2024 along with the details. The submission of the assessee has been duly considered. The assessee has filed the return of income for the year under consideration on 17-07-2018 declaring total Income of Rs.8,64,483/- and is engaged in business of trading of Cotton Yarn and related products and furnished the computation of income, Audit report. (i) In respect to payment to contractors M/s. A S Yarn Tex Pvt. Ltd, the assessee has stated that M/s. A S Yarn Tex Pvt. Ltd has wrongly shown the transaction in the TDS return and the said amount does not relate to the assessee. (i) In respect to payment to contractors M/s. A S Yarn Tex Pvt. Ltd, the assessee has stated that M/s. A S Yarn Tex Pvt. Ltd has wrongly shown the transaction in the TDS return and the said amount does not relate to the assessee. The assessee has furnished the ledger as well as the said transaction pertains to Star Roadways as per the clarificatory letter from M/s. A S Yarn Tex Pvt. Ltd. (ii) In response to information regarding brokerage from M/s. Rimtex Industries of Rs.12,13,400/- the said commission income is already shown in books of accounts and submitted the ledger showing such details. (iii) Further as per the GSTR data the assessee has made sale of Rs.59,80,84,806/- during the year under consideration and in this regard, the assessee furnished the sum of party wise sales figures as per GSTR data. However, the assessee has not furnished the sales register of the period under consideration. Hence, the income corresponding to the sale transaction of Rs.59,80,84,806/- being represented in the form of assets as defined in explanation to Section 149 of the Act has escaped assessment. (iv) As per the information in GSTR data the assessee has made purchases of Rs.66,22,73,034/- during the year under consideration. In this regard, the assessee has furnished the sum of party wise purchase data of the period under consideration. The assessee has not furnished the purchase register and therefore, the source of purchases of Rs.66,33,73,034/- being represented in the form of assets as defined in explanation to Section 149 of the Act has escaped assessment. (v) In respect to the sale of Mutual Funds of Rs. 8,17,919/- the assessee has furnished the Excel sheet of the sale of Mutual funds and stated that sale has been made by the partners and during the year assessee firm has not sold any mutual funds. (vi) In respect to Transaction of Rs.9,71,156/- with Mittal Enterprise the assessee has stated that the same are duly recorded in the books. The assessee not furnished the sales register for the year under consideration and therefore the sale transaction of Rs.9,71,156/- being represented in the form of assets as defined in explanation to Section 149 of the Act has escaped assessment. 5. The assessee not furnished the sales register for the year under consideration and therefore the sale transaction of Rs.9,71,156/- being represented in the form of assets as defined in explanation to Section 149 of the Act has escaped assessment. 5. Therefore, in light of the above reasons, information and material available on record, I am of the considered view that the assessee has failed to explain the above mentioned transactions and income earned / derived there from, during the year under consideration and therefore, the same remained unexplained. Assessee has failed to discharge the onus cast upon him to prove the genuineness of these transactions and also the source of income for undertaking such huge transactions. Hence, on the basis of material available on record, which establish that the income chargeable to tax in respect of above mentioned unexplained transactions of Rs.126,03,57,840/- which is being represented in the form of assets (as defined in Explanation to section 149 of the Act), has escaped assessment, amounts to more than Rs. 50 Lakhs for F Y 2017-18 relevant to AY 2018-19 as specified u/s. 149(1)(b) of the IT Act. Hence, this is a fit case for issuance of notice u/s. 148 of the Act as income chargeable to tax has escaped assessment within the meaning of Section 147 of the IT Act.” 8. In response to the said notice, the petitioner had submitted its explanation with documents vide reply dated 04.03.2024. 9. The respondent thereafter passed the impugned order under section 148A(d) on 29.03.2024 holding that income to the tune of Rs.126,03,57,840/- had escaped assessment for the year under consideration since the petitioner had failed to prove the genuineness of the transactions, source of income for making such huge transactions. 10. Being aggrieved by the impugned order, the petitioner has preferred the present petition. 11. Learned advocate Mr. Divatia submitted that the respondent Assessing Officer has failed to consider the explanation furnished and documents/evidence produced qua each item of alleged escapement in reply dated 04.03.2024. 12. It was submitted that the petitioner offered explanation with documentary evidence which clearly establishes that there was no escapement of income in respect of any of the items mentioned in notice under section 148A(b) of the Act. 13. 12. It was submitted that the petitioner offered explanation with documentary evidence which clearly establishes that there was no escapement of income in respect of any of the items mentioned in notice under section 148A(b) of the Act. 13. It was submitted that while passing the order under section 148A(d) of the Act, respondent Assessing Officer has only recorded that the petitioner did not furnish the purchase register or sales register and only because of non furnishing of the purchase and sale register, it was concluded that there is escapement of income of Rs.126,03,57,840/- and to arrive at such conclusion there is no application of mind on the part of respondent Assessing Officer. It was pointed out by learned advocate Mr. Divatia that along with the reply, the petitioner has furnished all the summary of purchase report in GSTR-I filed with GST department and has also submitted required details by submitting party-wise sales report and purchase report with the GST department. It was therefore, submitted that the contention raised by respondent Assessing Officer to come to the conclusion that it is a fit case for reopening the assessment is without jurisdiction ignoring the explanation tendered by the petitioner in absence of any escapement of income. It was submitted that the respondent was supposed to come to conclusion on the basis of information that it is a fit case to reopen on account of escapement of income. It was further submitted that the impugned order is passed with the sanction of the specified authority as defined under section 151 of the Act in a mechanical manner and without application of mind. It was therefore, prayed that the impugned order and notice are required to be quashed and set aside. 14. On the other hand, learned advocate Mr. It was further submitted that the impugned order is passed with the sanction of the specified authority as defined under section 151 of the Act in a mechanical manner and without application of mind. It was therefore, prayed that the impugned order and notice are required to be quashed and set aside. 14. On the other hand, learned advocate Mr. Karan Sanghani for the respondent submitted that the petitioner has shown total income of Rs.8,64,483/- in the return of income whereas there is total sales/purchase transaction of yarn/cotton amounting to Rs.126,45,27,615/- and on basis of such variance in turnover and the income offered by the petitioner, information was uploaded on Insight portal by DCIT, Central Circle 1, Ludhiana, on the basis of survey action conducted on premises of Mohit Mittal, Proprietor of Mittal Enterprises, Ludhiana on 05.03.2020 wherein during post-survey enquiries, it was found that said Mohit Mittal was engaged in trading in Cotton Yarn/Cotton scrap and therefore, TCS was required to be deducted by the parties from whom Mohit Mittal has purchased Yarn/Cotton scrap and in the list of purchasers, name of the petitioner was also mentioned with regard to sale of Yarn/Cotton scrap amounting to Rs.9,71,156/- by the petitioner and no TCS was deducted and therefore, respondent Assessing Officer came to the conclusion that there is no escapement of income. 15. It was further submitted that respondent Assessing Officer has formed the opinion on the basis of information after considering the reply of the petitioner before finding it to be a fit case for issuance of notice under section 148 of the Act. It was found that there were six yarn transactions found from the insight portal pertaining to the petitioner as under : SI No. Information description Info Provider Amount Rs. 1. TDS Statement- Payment to contractor (Section 194C) A.S yarn Tex Private Limited 11,67,600/- 2. TDS Statement- Commission or Brokerage (Section 194H) Rintex Industries 12,13,400/- 3. Sum of partywise sales reported in GSTR I GSTR I 598084506/- 4. Sum of partywise purchases GSTR I 662273034/- 5. Sum of mutual fund units --- 817919/- 6. Sale of yarn/cotton scrap made to Mohit Mittal Prop. Mittal Enterprises Mohit Mittal Prop Mittal Enterprises (PAN ABIPM4674K) 971156/- Total Information Value Rs.126,45,27,615/- 16. Sum of partywise sales reported in GSTR I GSTR I 598084506/- 4. Sum of partywise purchases GSTR I 662273034/- 5. Sum of mutual fund units --- 817919/- 6. Sale of yarn/cotton scrap made to Mohit Mittal Prop. Mittal Enterprises Mohit Mittal Prop Mittal Enterprises (PAN ABIPM4674K) 971156/- Total Information Value Rs.126,45,27,615/- 16. It was submitted that Assessing Officer in para no.4 of the impugned order has discussed each of the above information and thereafter come to the conclusion that notice under section 148 is required to be issued. 17. In rejoinder, learned advocate Mr. Divatia submitted that respondent has failed to show from the details submitted in the notice as well as the impugned order by only referring to sum of party-wise sales and purchase reported in GSTR-I and there is no reference to any particular information for escapement of income. 18. Having heard the learned advocates for the respective parties and having considered the facts of the case, from the reasons given by the respondent for reopening in notice under section 148A(b) of the Act, it is apparent that there is total non application of mind on part of the respondent Assessing Officer to come to the conclusion that it is a fit case for reopening the assessment. 19. On perusal of the order passed under section 148A(d) of the Act, it is revealed with regard to the payment of contractor to A.S Yarn Tex Private Limited that respondent Assessing Officer has taken note of the ledger as well as the clarificatory letter issued by A.S Yarn Tex Private Limited. Similarly, with regard to information of brokerage from M/s. Rintex Industries of 12,13,400/-, it is agreed by Assessing Officer that same is also shown in books of account. 20. Whereas regard to sales and purchase data from GSTR-I register, the Assessing Officer has observed that the petitioner failed to submit sales and purchase register and therefore, there is escapement of income. In respect of sale of mutual funds of Rs.8,17,919/-, it was explained by the petitioner that sale was made by the partner and during the year under consideration, the petitioner has not sold any mutual fund. With regard to transaction with Mittal Enterprise, it was observed that sales register was not furnished by the petitioner and the same is escapement of income. With regard to transaction with Mittal Enterprise, it was observed that sales register was not furnished by the petitioner and the same is escapement of income. However, on perusal of the document placed on record, the petitioner has placed on record the details of Form GSTR-I wherein all the details of sale and purchase as submitted to GST department are provided to the respondent. 21. With regard to Mittal Enterprise Ludhiana also, the petitioner has explained in detail in reply to the effect that such transactions with the said party is duly accounted in the books of accounts and the ledger account was also provided. 22. Considering the facts of the case and explanation provided by the petitioner, it is apparent that the Assessing Officer has failed to justify any of the reasons assigned to come to the conclusion that it is a fit case to reopen the assessment for the year under consideration. On perusal of the impugned order passed under section 148A(d) of the Act, it is clear that the Assessing Officer has arrived at conclusion to hold that it is a fit case to reopen only on the ground that the petitioner did not furnish the Sales and Purchase Register. The Assessing Officer by considering the total of party-wise purchases and party-wise sales as stated in Form GSTR-I has come to the conclusion that there is escapement of income without there being any material/information on record. Thus the Assessing Officer has passed the impugned order with total non application of mind to hold that the assessee has failed to explain six transactions and the same has remained unexplained and the assessee has failed to prove the genuineness of this transaction and also the source of income. The Assessing Officer however, has accepted the explanation tendered by the petitioner in respect of all the six transactions except observing that the assessee did not furnish the Sales and Purchase Register and therefore, the source for sales and purchase is not known ignoring the fact that the petitioner has filed the return of income for the year under consideration along with audit report and audited balance sheet and Profit and Loss Account. 23. In view of foregoing reasons, the petition is allowed. 23. In view of foregoing reasons, the petition is allowed. The impugned order under section 148A(d) dated 29.03.2024 passed by the respondent as well as the impugned notice issued under section 148 of the Act dated 29.03.2024 for AY 2018-2019 are quashed and set aside. 24. Petition is disposed of. Rule is made absolute to the aforesaid extent. No order as to costs.