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Facts
The assessee's case was selected for scrutiny due to purchases from non-filers or suppliers with low turnover. The Assessing Officer (AO) made an addition of Rs. 30,76,61,569/- on account of bogus purchases after the assessee failed to comply with notices. The Commissioner (Appeals) also passed an ex-parte order.
Held
The Tribunal found that the assessee did not get sufficient opportunity to produce documents and that the CIT(A) passed an ex-parte order without deciding all grounds on merit. Therefore, the Tribunal restored the issue to the AO for a de-novo assessment, ensuring the assessee is given an opportunity.
Key Issues
Whether the assessee was provided adequate opportunity for substantiating claims before the AO and CIT(A), and whether the ex-parte order by CIT(A) violated principles of natural justice.
Sections Cited
142(1)
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Income Tax Appellate Tribunal, DELHI
ORDER
PER YOGESH KUMAR, U.S. JM:
The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals/ National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 20/12/2024 for the Assessment Year 2021-22.
Brief facts of the case are that, the Assessee filed return of income for Assessment Year 2020-21 at Rs. 5,20,300/-. The case of the Assessee was selected for scrutiny under CASS for the reason “substantial purchases from suppliers who are either Non Filer(s) or have filed non- business ITR (ITR 1, 2) or reflected a substantially lower turnover in ITR”. During the assessment proceedings, though the Assessee has replied to initial notices issued u/s 142(1) of the Act, failed to comply with the subsequent notice and did not submit the requisite documents called by the A.O., therefore, the assessment has been framed on 20/12/2024 by making an addition of Rs. 30,76,61,569/- on account of bogus purchase. Aggrieved by the assessment order dated 16/12/2022, the Assessee preferred an Appeal before the Ld. CIT(A).
The Ld. Counsel for the Assessee submitted the Assessee could not get the sufficient opportunity to produce the documents to substantiate his claim before the A.O. and even the Ld. CIT(A) has also passed ex-parte order in a hurried manner without adjudicating all the grounds of Appeal and the order impugned came to be passed in violation of principals of natural justice. Thus, sought for allowing the Appeal.
4. Per contra, the Ld. Department's Representative submitted that the Assessee is a chronic defaulter who has not appeared before the Lower Authorities, therefore, both the A.O. as well as the Ld. CIT(A) have passed the respective orders in accordance with law which requires no interference, thus by relying on the orders of the Lower Authorities sought for dismissal of the Appeal.
We have heard both the parties and perused the material available on record. During the assessment proceedings, though the Assessee has replied to initial notices issued by the A.O., the Assessee has failed to comply with the notice issued u/s 142(1) of the Act dated 31/10/2022, therefore, A.O. proceeded to frame the assessment.
Even during the first appellate proceedings, the Assessee failed to appear before the Ld. CIT(A) which resulted in passing an ex-parte order which is impugned before us. The Ld. CIT(A) has not decided all the grounds of Appeal on its merits. In view of the above, in the interest of justice, we deem it fit to restore the issue to the file of the A.O. for de-novo assessmentin accordance with law. Needless to say, the A.O. shall provide opportunity for producing requisite documents and the submission to substantiate the claim of the Assessee before passing the assessment order. The Assessee is also directed to participate in assessment proceedings without fail.
6. In the result, the Appeal of the Appellant is partly allowed for statistical purpose.