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Income Tax Appellate Tribunal, “SMC” BENCH,
Before: SHRI ABY T. VARKEY, JM
O R D E R
PER ABY T. VARKEY, JM:
This is an appeal preferred by the assessee against the order of the Ld. CIT(A)-06, Mumbai dated 15.03.2019 for AY. 2009-10.
None appeared on behalf of the assessee. 3. Brief facts are that the assessee is a proprietor of a Firm named M/s. Haresh Trading Co, which is dealing with trading of electrical components. The assessee had filed the return of income on 30.09.2009 for AY. 2009-10 declaring total income of Rs.3,09,973/-. Later, the assessment was reopened u/s 147 of the Income Tax Act, 1961 (hereinafter “the Act’) by issuance of notice u/s 148 of the Act after recording the reasons. The AO noted that he received information from the DGIT(Inv.), Mumbai that during the relevant year, the assessee had dealt with thirteen (13) parties who were hawala operators which information the investigation wing (DGIT) received 2 A.Y. 2009-10 M/s. Mahesh C Shah in-turn from the Sales Tax Department of the State of Maharashtra. The name of the viz hawala parties are given at page no. 2 of the assessment order and the transaction with them amounts to Rs.14,27,139/-. The assessee did not participate in the assessment proceedings. Therefore, AO treated the entire transaction of purchase from these parties as accommodation entries/ non-genuine purchases amounting to Rs.14,27,139/- added to the total income of the assessee. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A) who upheld the action of the Ld. CIT(A). The Ld. CIT(A) noticed that despite notices the assessee did not comply, therefore, he passed an ex- parte order by dismissing the appeal of the assessee by holding as under: - “6.3.5 In the present case, the AO concluded that the purchases to the extent claimed to have been made from the above- mentioned parties are not real purchases but merely accommodation entries in order to inflate the purchases/expenses and hence it is disallowed. As narrated earlier, the AO in this case has held that the alleged non-genuine parties from whom the assessee has claimed to have made purchases, have not supplied any material to the assessee. This is a case wherein the assessee has not produced stock register, not matched the sales with purchases and has not provided the necessary details. The assessee could not produce the delivery challans either. The consumption/sales of these purchases could not be verified with certainty. The assessee could not show one to one co-relation between its purchases and sales. All these failures on the part of the appellant have taken place despite proper and reasonable opportunity given to the assessee by the 3 A.Y. 2009-10 M/s. Mahesh C Shah AO, which have clearly been mentioned at para 3.2 of the assessment order. It is further noted that the impugned order has been passed u/s.144 of the Act. The appellant, in the statement of facts have only contended that as per records available with them, they can produce statement showing Purchase and Sales reconciliation showing details of purchase and sales party-wise for above mentioned parties. However, no such details have been produced either during the course of assessment or during the instant proceedings. It has further been contended that all the purchases are made through bank payment only. Further, it is a practice in the market to supply material with delivery challan along with Vat Tax Bill. The assessee supplies material to the sales party along with delivery challan memo and same is acknowledged by the party to whom they have sold the materials. In respect of such mention of the appellant, it is stated that the said mentions have not been proven with any details/documents. The appellant, rather and despite receipt of various notices has chosen not to avail opportunity of being heard for the reasons best known to him. Under these facts and circumstances nothing could be considered to be factually demonstrated. Therefore, it is concluded that the entire transaction shown appellant’s motive to claim bogus purchases to inflate the expenses. Hence, AO’s action of addition of 100% purchases is upheld. Accordingly, Ground No. 1 & 2 are dismissed.”
Aggrieved, the assessee preferred an appeal before this Tribunal by stating that both the authorities erred in making 100% disallowance of the purchases without disturbing the sales of the very same purchases shown by the assessee.
4 A.Y. 2009-10 M/s. Mahesh C Shah 5. During the hearing, the Ld. DR brought to my notice that the assessee has not appeared before the AO as well as Ld. CIT(A) as well as before this Tribunal. It is noted that the notice issued by Tribunal informing date of hearing to assessee has been returned unserved [perusal of the notices/speed-post letter send to assessee show the same address as reflected Form No. 36 “B-208, Ramdev Park CHSL, Chandavarkar Road, Next to SP Mukherjee Garden, Borivali (West)”]. Taking into consideration, the un-disputed fact that the assessee has not participated in the proceedings before the AO/Ld. CIT(A) and the notices issued by this Tribunal to assessee by speed- post informing the fact of listing of the appeal has been returned back by the postal authorities, I am of the opinion that there is no point in adjourning the appeal, therefore, I am inclined to dispose of this appeal. The main ground of appeal raised by the assessee is that the entire purchase made by assessee [even if it is supported by accommodation bills], cannot be disallowed/added, since the AO has not disturbed the sales shown by the assessee. It is noted that in this case, the assessee is into Trading of Electrical Components and filed return of income showing Rs.3,09,973/-. The same was re-opened on the basis of information from Sales Tax Department/DGIT(Inv.) that assessee has shown to have dealt with thirteen (13) entry operator (named in assessment order at page-2) amounting to Rs.14,27,139/- and since assessee failed to participate in the assessment proceedings, the AO rejected the books of account of the assessee u/s 145(3) of the Act after giving notice to the assessee as discernible from para 3.2 & 5 A.Y. 2009-10 M/s. Mahesh C Shah 3.5 of assessment order. And the Ld. CIT(A) has confirmed the action of AO because assessee did not appear before him despite the appeal was listed four (4) times (30.11.2018, 10.12.2018, 21.01.2019 and 25.02.2019) and the Ld. CIT(A) has passed the impugned order on 15.03.2019. And assessee has filed the appeal before this Tribunal on 16.03.2023. And even if the period of Covid-19 is considered (i.e. from 15.03.2020 to 28.05.2022) still the delay caused in filing of appeal before this Tribunal is about two (2) years. However, it is noted that assessee has filed an affidavit praying for condonation of delay. A perusal of affidavit reveals that assessee is a physically handi-capped person (Disability Certificate of Polio effect 50% disability and his place of business is his place of residence itself]. According to assessee due to change of address because of re-development from old address at 57/61, 2nd Floor, Vyas Bhavan, Kika Street, Pahydhoni, Mumbai-400002 to new address shown at Form 36 (supra), the assessee didn’t receive the notice of hearing, therefore the Ld. CIT(A) has passed the ex-parte order, [which came to assessee’s notice after few months], and coupled with the fact that being the son, he had to look after his father and mother, who were suffering from multiple ailments and due to which his father expired recently, and mother being a cancer patient he had to take care of her treatment. Thus, assessee couldn’t entrust the case to Ld. AR and thereafter, due to Covid-19 pandemic lock-down etc the appeal couldn’t be filed in time. Taking into consideration, the aforesaid facts and circumstances the delay caused in filing appeal is condoned. It is noted the Ld. CIT(A)