ORDER : (Bhargav D. Karia, J.) 1. By this petition under Article 226 of the Constitution of India, the petitioner has challenged the notice dated 13th April 2022 issued under Section 148 of the Income Tax Act, 1961 (for short, “the Act”) for the Assessment Year 2018-19. 2. The brief facts of the case are as under: 2.1 The petitioner is a company incorporated under the Companies Act, 1956. The petitioner filed return of income showing total income of Rs.61,24,830/- for the Assessment Year 2018-19. 2.2 The respondent – Assessing Officer issued notice under Section 148A(b) of the Act calling upon the assessee as to why reassessment proceedings should not be initiated by issuing show cause notice under Section 148 of the Act on the following grounds: - As per information received by the respondent. M/s S.K. Enterprises, Ahmedabad (i.e. a third party) was involved in availing incorrect Input Tax Credit (hereinafter referred to as "ITC" for the sake of brevity) as well as passing on ITC to others without actual supply of goods. - Reference has been made to statements of Shahrukhkhan Pathan and Madhav Shah recorded by the department. In view of the same and certain other aspects, it was concluded that M/s. S.K. Enterprises is dummy concern and was created to defraud and to provide bogus invoices/bills to various buyers. - The petitioner is alleged to be one such entity which has been provided GST ITC of Rs.60,91,125/- by M/s. S.K. Enterprises. - In view of the above, the respondent was of the view that income of Rs.60,91,125/- has escaped assessment for the year under consideration. 2.3 The petitioner, in response to the above notice, filed reply dated 7th April 2022 requesting the respondent to drop the assessment proceedings containing as under: - The respondent has relied upon think party information for alleging that there is escapement of income chargeable to tax in the hand of the petitioner. However, no details whatsoever of any inquiry or report of verification or information received from third party agencies or statement of any person or any evidences whatsoever have been provided to the petitioner along with show cause notice. - The petitioner requested the respondent to provide copy of all the documents/statement/any other record etc which has been relied upon by the respondent for alleging that the petitioner has made any bogus purchases. - The petitioner requested the respondent to provide copy of all the documents/statement/any other record etc which has been relied upon by the respondent for alleging that the petitioner has made any bogus purchases. - The petitioner further requested the respondent to provide an opportunity of cross-examination of the persons concerned before relying upon their statement against the petitioner. - The petitioner also requested for copy of approval of the competent authority for the purpose of initiating reassessment proceedings in the case of the petitioner. - Genuineness of purchases in question stands proved beyond any shadow of doubt. - Complete details of purchases made from M/s BK Enterprises (viz. name, address, PAN, GSTIN etc) were furnished to prove the purchases in question. - Following documentary evidences of purchase, delivery and payment were also furnished: - Ledger of SK Enterprises - Invoices with respect to purchases; - Relevant delivery notes/challans; - Transport receipts; - Relevant extract of bank statements; - Purchase of Yarn was made from S.K. Enterprises for self- consumption as raw material. - GST registration of S.K. Enterprises was in existence when purchases in questions were made by the petitioner and even cross verification of sales made by the said party to the petitioner has been carried out by the petitioner on GST Portal. Subsequently, GST Department had cancelled the GST registration of the said party on 11.09.2019. - There is no logic in the petitioner company availing fake invoices for bogus ITC as alleged by the department, since the petitioner always has “excess ITC", as is verifiable from the unutilized GST credit balance. - There is no escapement of income chargeable to tax, an alleged in the show cause notice. The said fact is evident from the followings: - "Gross profit ratios" as well as "Net profit ratios of "processing division" as well as "yarn division" for the "year in question" and "earlier year". - "Ratio of material consumption to finished goods” of "processing division" as well as "yarn division" for the "year in question" and "earlier year". - The following vital facts also prove that no bogus purchases have been made by the petitioner: - Books of accounts have been duly audited; - Stock register has been maintained; - Quantity details have been maintained; - Stock audits have been periodically carried out by banks. - The following vital facts also prove that no bogus purchases have been made by the petitioner: - Books of accounts have been duly audited; - Stock register has been maintained; - Quantity details have been maintained; - Stock audits have been periodically carried out by banks. - Merely because M/s. S. K. Enterprise did not file the income-tax return or did not comply with the notices issued by the department cannot conclusively prove that purchases made from the said party are bogus. - Unaccounted purchases cannot be considered as income, but only net profit element embedded therein can be taxed as income. - Various judicial pronouncements were also referred to by the petitioner in support of various contentions raised in the submissions.” 2.4 The petitioner, by another letter dated 7th April 2022 addressed to the respondent, clarified that value of the GST credit on total purchases from M/s. S. K. Enterprises was only Rs.7,30,936/- and all the documentary evidence in support of the same were furnished and therefore, the show cause notice containing the incorrect amount of ITC i.e. Rs.60,91,125/- has been issued by the respondent. 2.5 The respondent passed an order dated 13th April 2022 under Section 148A(d) of the Act observing that there is an escapement of income chargeable to tax of Rs.60,91,125/- and it is a fit case to reopen the assessment and therefore, notice under Section 148 of the Act has been issued on 13th April 2022. 2.6 Being aggrieved, the petitioner – assessee has preferred this petition challenging the impugned notice issued under Section 148 of the Act as well as the impugned order dated 13th April 2022 passed under Section 148A(d) of the Act. 3. Learned Senior Advocate Mr. Tushar Hemani for the petitioner submitted that the respondent – Assessing Officer has not considered the reply filed by the assessee wherein the documentary evidence of purchase, delivery and payment to prove the genuineness of the transactions with M/s. S. K. Enterprises have been placed on record before the Assessing Officer. 3. Learned Senior Advocate Mr. Tushar Hemani for the petitioner submitted that the respondent – Assessing Officer has not considered the reply filed by the assessee wherein the documentary evidence of purchase, delivery and payment to prove the genuineness of the transactions with M/s. S. K. Enterprises have been placed on record before the Assessing Officer. It was submitted that in the impugned order under Section 148 A(d) of the Act, the respondent – Assessing Officer has though stated that reply is carefully considered, but none of the documentary evidence placed on record including the delivery notes/challans showing delivery of the goods, copy of transport receipts placed on record received, delivery of goods received by the petitioner are taken into consideration and simply relied upon the information received by the risk management strategy formulated by the CBDT. 4. It was submitted that the petitioner has raised objection with regard to issuance of notice under Section 148 of the Act giving all the details with regard to the transactions with M/s. S. K. Enterprises, however, the respondent – Assessing Officer, without considering such details, has decided on the basis of the information received by him only that it is a fit case to reopen the assessment. 5. It was, therefore, submitted that starting point of the inquiry i.e. information has resulted into the decision on the basis of information only ignoring the details of the documents placed on record by the petitioner to show, prima facie, that there is no escapement of income as the petitioner has received the goods, which is supported by the material in the form of delivery challans and transport receipts. 6. On the other hand, learned advocate Mr. Karan Sanghani for the respondent submitted that the respondent – Assessing Officer is only required to come to the decision that information received by him is with regard to M/s. S. K. Enterprises issuing the bills without supplying the goods and there was a transaction between M/s. S. K. Enterprises and the petitioner. It was submitted that the petitioner has not denied the transactions between the petitioner and M/s. S. K. Enterprises, who is alleged to have issued bills without any movement of the goods. 7. It was submitted that the petitioner has not denied the transactions between the petitioner and M/s. S. K. Enterprises, who is alleged to have issued bills without any movement of the goods. 7. In support of his submissions, reliance placed on the decision of the Hon’ble Allahabad High Court in the case of Deepak Kumar Yadav vs. Principal Commissioner of Income-tax reported [2023] 151 taxmann.com 376 (Allahabad), to submit that the provisions of Sections 147 and 148 of the Act does not contemplate any detailed adjudication on the merits of information available with the Assessing Officer at the stage of passing order under Section 148A(d) of the Act. It was submitted that in similar facts, the Hon’ble Allahabad High Court dismissed the petition upholding the order passed under Section 148A(d) of the Act. 8. Considering the above submissions, it appears that the respondent – Assessing Officer has passed the order under Section 148A(d) of the Act without considering the reply filed by the assessee. Section 148A(d) of the Act reads as under: “148A. The Assessing Officer shall, before issuing any notice under section 148, - (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires:” 9. On perusal of the above provision, it is clear that the Assessing Officer is required to decide on the basis of material available on record including the reply filed by the assessee whether it is a fit case to issue notice under Section 148 of the Act or not. In the present case, the Assessing Officer has observed in para 10 which can be considered as decision arriving by the Assessing Officer. It reads as under: “10. The reply of the assesses has been carefully considered but not found tenable for the reason that is proved that at no point of time, M/s. S.K. Enterprises purchased any actual physical goods. It reads as under: “10. The reply of the assesses has been carefully considered but not found tenable for the reason that is proved that at no point of time, M/s. S.K. Enterprises purchased any actual physical goods. Further, it is also found that M/s. S. K. Enterprises is involved in generating sales bills and passing GST credit to buyers without any movement of good. M/s. S. K. Enterprises has passed on GST credit of Rs.17.59 Crores to buyers without actual movement of goods. Further the assessee has not provided the corroborative evidence in the form of payment of GST or produced any challan in support of the same. Further the assessee has accepted that it has made purchases of rs.60,91,125/- from M/s. S.K. Enterprises which is found to be a legal entity existing only on paper and is dummy concern and was created to defraud and to provide bogus invoices/bills to the buyers, the assessee firm being one such entity. M/s. S. K. Enterprises has provided GST ITC credit of Rs.60,91,125/- to the firm without actual supply of goods on such invoices. Thus, it is logical to conclude that the assessee has no proper proof and corroborative information with respect to the guilelessness of the purchases made by them as stated above.” 10. Considering the above, it appears that the Assessing Officer has reproduced the reply filed by the assessee and the contents thereof are not even referred or analyzed prima facie to come to the conclusion that it is a fit case to reopen the assessment. 11. On the other hand, the petitioner along with the reply has reproduced the following documentary evidence of purchase, delivery and payment to show the genuineness of the transactions entered into with M/s. S. K. Enterprises: “(b) Documentary evidence of purchase, delivery and payment to prove the genuineness thereof Now in respect of the above purchases, we upload herewith in Annexure-1, the following documentary evidences, which would prove beyond doubt not only the fact that the purchases made by are genuine but also the payment thereof has been made by us through RTGS and even the delivery of the goods stands duly received by us. (i) Copy of ledger account of M/s. S.K. Enterprise from our books of accounts; (ii) Copy of invoice/Bill in respect of purchases made; (iii) Copy of Delivery Note/Challan showing delivery of goods received by us; (iv) Copy of transport receipts in respect of delivery of goods received by us, (v) The copy of the relevant extract of bank statement showing that the payments have been made through RTGS; The above documentary evidences clearly prove that the purchases made by us from the said party is absolutely genuine.” 12. This Court, by order dated 26th February 2024, has directed the learned advocate Mr. Sanghani to place on record the original papers containing the documents which are supplied by the petitioner in reply to the notice under Section 148A(d) of the Act. Learned advocate Mr. Sanghani stated that the documents have been placed on record by the petitioner, as referred hereinabove. 13. In view of the above, we are of the opinion that the impugned order and the notice are required to be quashed and set aside remanding the matter back to the Assessing Officer to pass a fresh order under Section 148A(d) of the Act within a period of four weeks from the date of receipt of the copy thereof so as to consider the documents placed on record by the petitioner along with the reply to decide as to whether it is a fit case to issue notice under Section 148 of the Act or not. 14. With the aforesaid observations, this petition partly succeeds. The impugned notice under Section 148 of the Act and the impugned order under Section 148A(d) of the Act are hereby quashed and set aside. The matter is remanded back to the Assessing Officer to pass a fresh de novo order after giving an opportunity of hearing to the petitioner. No order as to costs.