M/S LOYAL GEMS,MUMBAI vs. ITO-WARD 22(2)(1), MUMBAI

The Ld A.R submitted that the Ld CIT(A) has dismissed the appeal pointing out certain discrepancies in Form No.35 filed before him. Explaining the same, the Ld A.R submitted that the assessee filed appeal before the Ld CIT(A) challenging the assessment order dated 08-03-2016 passed by the assessing officer for AY 2013-14 u/s 143(3) r.w.s 147 of the Act. The assessee initially filed appeal manually in Form No.35 before Ld CIT(A), wherein the order appealed against was correctly mentioned as the order passed u/s 143(3) r.w.s 147 of the Act. At that point of time, e-filing of appeals was made mandatory and hence the assessee filed appeal again through e-portal in Form no.35. However, in that form, the order appealed

The Ld A.R submitted that the assessee has committed an advertent mistake in mentioning the section and the assessee would have clarified the same, had the Ld CIT(A) pointed out the defect. The Ld A.R further submitted that the addition made by the AO is related to the alleged bogus purchases. The Ld A.R submitted that the assessee is a trader and exporter of polished diamonds and it is the allegation of the AO that the assessee has booked bogus purchase bills by obtaining accommodation bills from hawala traders to the tune of Rs.97,78,804/-. The AO disallowed 25% of the value of above said alleged bogus purchases. The Ld CIT(A) did not adjudicate the above said issue on merits, since he dismissed the appeal of the assessee on technical reasons.

The Ld A.R submitted that the AO had made identical additions in the hands of the assessee in the earlier years, i.e., in AY 2010-11 to 2012-13, wherein also, the AO disallowed 25% of the value of alleged bogus purchases. The Ld CIT(A) reduced the same to 12.5% of the value of alleged bogus purchases. However, the Tribunal has restricted the addition to 2% of the value of alleged bogus purchases, vide its order dated 27-08-2021 passed in to 7745/Mum/2019 for AY 2010-11 to 2012-13. The Ld A.R submitted that the facts prevailing in the current year are identical in nature and accordingly prayed that the addition may be restricted to 2% of the value of alleged bogus purchases, as held by the Tribunal in the earlier years.

The ld D.R, on the contrary, submitted that the ld CIT(A) has not adjudicated the issue on merits.

We heard the parties and perused the record. We notice that the Ld CIT(A) has dismissed the appeal pointing out certain discrepancies in the appeal papers filed before him. On a perusal of the record and upon considering the explanations given by Ld A.R, we notice that it was an inadvertent mistake committed by the assessee in mentioning wrong section for the order appealed against. Had the Ld CIT(A) raised a query on this discrepancy, the assessee would have clarified the same. Accordingly, we are unable to agree with the reasoning given by Ld CIT(A) for rejecting the appeal filed by the assessee on technical reasons. Accordingly, we set aside the impugned order passed by Ld CIT(A).

Though the Ld A.R submits that the issue contested by the assessee is squarely covered by the decision rendered by the co-ordinate bench, we are of the view that the same is required to be restored to the file of Ld CIT(A), since the first appellate authority has not adjudicated the same on merits. At the same time, since the Tribunal has already taken a particular view on the issue in the assessee’s own case, in our view, the same is required to be followed by Ld CIT(A) in order to maintain consistency. Accordingly, we restore the issues urged on merits to the file of Ld CIT(A) and direct him to adjudicate them by following the decision rendered by the Tribunal in the assessee’s own case in the earlier years, vide its order referred supra.

In the result, the appeal filed by the assessee is treated as allowed for statistical purposes. Pronounced in the open court on 19.7.2023.