MITASHI EDUTAINMENT PVT. LTD.,MUMBAI vs. THE DCIT, CENTRAL CIRCLE 6(4), MUMBAI., MUMBAI

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ITA 2255/MUM/2025Status: DisposedITAT Mumbai29 July 2026AY 2021-227 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal set aside the orders of the CIT(A) and restored the matters to the CIT(A) for de novo adjudication. This was done to grant the assessee an adequate opportunity of being heard, despite the assessee's past non-compliance.

What were the facts?

The assessee's appeals for AY 2018-19 and 2021-22 stemmed from additions made by the AO and confirmed by the CIT(A). The AO had reopened the case based on information regarding GST invoice fraud and conducted a survey, leading to additions for bogus sales, purchases, and other expenses.

What were the issues?

Whether the lower authorities provided adequate opportunity of hearing to the assessee, and if the case should be remanded for fresh adjudication on merits.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A,Section 69C,Section 115BBE,Section 80G,Section 68,Section 142(1),Section 144,Section 250

AI-generated summary — verify with the full judgment below

Before: SHRI ANIKESH BANERJEE & SHRI BIJAYANANDA PRUSETH

For Appellant: Shri Rajesh C. Shah (Virtually Appear)
For Respondent: Shri Surendra Mohan (Sr. DR)
Hearing: 29.07.2026Pronounced: 31.07.2026

IN THE INCOME-TAX APPELLATE TRIBUNAL, MUMBAI “A” BENCH, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI BIJAYANANDA PRUSETH, ACCOUNTANT MEMBER ITA No.2254 & 2255/MUM/2025 (AY: 2018-19 & 2021-22) Mitashi Edutainment Pvt. Ltd. vs. DCIT, Central Circle 6(4), 414/424, 4th Floor, Bhaveshwar Kautilya Bhavan. Bandra Kurla Arcade, LBS Marg. Ghatkopar West- Complex, Mumbai-400051. 400086. PAN/GIR No: AACCM3958N (Appellant) (Respondent) Assessee by Shri Rajesh C. Shah (Virtually Appear) Revenue by Shri Surendra Mohan (Sr. DR) Date of Hearing 29.07.2026 Date of Pronouncement 31.07.2026 O R D E R PER BIJYANANDA PRUSETH, AM:

These appeals filed by the assessee emanate from the orders passed under section 250 of the Income-tax Act, 1961 (in short, ‘Act’) by the National Faceless Appeal Centre [in short, ‘CIT(A)’], both dated 13.01.2025, for the assessment years (AY) 2018-19 and 2021-22. Since the facts and grounds are similar, with the consent of both parties, the appeals were clubbed and heard together and a common order is being passed for the sake of convenience and brevity. ITA No.2254/Mum/2025 (AY: 2018-19) is taken as the “lead case.” 2. The grounds of appeal raised by the assessee in ITA No.2254/Mum/2025

(AY 2018-19) are as under:

“1. The Ld. AO has erred in reopening the case u/s 147 of the Act and in issuing the notice u's 148 of the Act and the Ld. CIT (A) has erred in confirming the same. The addition made was never grounds for reopening as neither in notice u/s 148A(b) nor in the order passed u/s 148A(d) of the Act has discussed the issue of any commission that he added in the assessment. 1

2.

The Ld. AO has reopened the case for escapement of income, however, in the order passed u/s 148A(d) of the Act it is mentioned in para 5 of the said order that. "However, the decision on whether or not income has actually escaped assessment will be taken only at the conclusion of re- assessment proceedings after duly considering all submissions made by the assessce and after affording the assessee reasonable opportunity of being heard" The Ld. AO has erred in reopening the case without any satisfaction for escapement of income, which is bad in law 3. The Ld. AO has mentioned in para 6 of the order passed u/s 148A(d) of the Act as "On the basis of material available on record, and as discussed above. I am satisfied that the income which has escaped assessment is likely to amount to Rs. 50 lakhs (or) more and is represented in the form of asset, being deposits in bank. The Ld. AO has erred in reopening the case without knowing which income has been escaped. 4. The Ld. AO has erred in applying section 69C of the Act and the Ld. CIT(A) has erred in confirming the same without bringing a single piece of evidence on the record. 5. The Ld. AO has erred in making an addition of Rs.11.35.21.065/- being commission on nongenuine sales and also the Ld. CIT(A) has erred in confirming the same without any evidence on record. 6. The Ld. AO has erred in making an addition of Rs 2,06,500/-being non- genuine deduction claimed u/s 80G and also the Ld. CIT(A) has erred in confirming the same without any evidence on recard. 7. The Ld. AO has erred in making an addition of Rs. 1,34,82,679/- (20% of Rs.6,74,13.396/-) on account of discount paid & Scheme discount and also the Ld. CIT(A) has erred in confirming the same without any evidence on record. 8. The Ld. AO has erred in making an addition of Rs.12,47,49,612/- (20% of (i) Employee benefit expenses Rs.33,83,00,621/- (ii) Finance costs Rs. 16,52,76,645/-(iii) Other expenses Rs.33,83,00,621/-) and also the Ld. CIT(A) has erred in confirming the same without any evidence on record 9. The appellant reserves the right to add, alter, amend, or withdraw any grounds of appeal.”

3.

The grounds of appeal raised by the assessee in ITA No.2255/Mum/2025

(AY 2021-22) are as under:

“1. The Ld. AO has erred in making an addition of Rs. 1,01,95,624/- being unpaid statutory amounts and also the Ld. CIT(A) has erred in confirming the same. 2. The Ld. AO has erred in making an addition of Rs. 38,69,949/- being the increase in unsecured loans received from a related party and others treated as unexplained cash credit u/s 68 and also the Ld. CIT(A) has erred in confirming the same without any evidence on record. 3. The appellant reserves the right to add, alter, amend, or withdraw any grounds of appeal.”

ITA No.2254/Mum/2025 (AY 2018-19) 4. Facts of the case, in brief, are that the assessee filed return of income for

the AY 2018-19 on 31.10.2018 declaring total income at Rs.9,68,25,946/-. On the

basis of information received from the office of DDIT (Inv.) Unit-5 (1), Mumbai it

was found that the office DGGI and CGST conducted special drive regarding GST

invoice fraud. It was found that M/s Agrim Impex had availed fraudulent input tax

credit on fake invoices without any actual delivery of goods and that the assessee

company had major sales transactions with the above party. Accordingly, survey

u/s 133A of the Act was carried out at the business premises of the assessee

company. It revealed that the assessee had availed bogus and accommodation

entries of purchases and sales to inflate its turnover. Thereafter, notice u/s 148 of

the Act was issued on 07.04.2022 after following the due procedures. However,

assessee did not filed the return of income. Thereafter, AO issued various

statutory and show cause notices which are detailed at para 2.4 of the assessee

order. The assessee made part compliance but did not reply to the final show- cause notice or subsequent notices u/s 142(1) issued to it. Therefore, the AO

invoked provisions of section 144 of the Act and based on the findings of the

survey proceedings, he added 3% of the bogus and non-genuine sales and

purchases of Rs.378,40,35,489/- amounting to Rs.11,35,21,065/- u/s 69C r.w.s.

115BBE of the Act. The AO also disallowed claim of 80G deduction of

Rs.2,05,500/-. He also disallowed 20% of the discount paid and scheme discount

amounting to Rs.1,34,82,679/-. He further disallowed 20% of employee benefit

expenses, finance cost and other expenses amounting to Rs.12,47,49,612/-. The

total income was determined at Rs.34,87,85,352/-.

5.

Aggrieved by the order of AO, the assessee filed appeal before the CIT(A).

The CIT(A) issued three notices u/s 250 of the Act on 24.01.2024, 02.12.2024 and

01.01.2025. However, there was non-compliance on part of the assessee. The

assessee also did not request for adjournment nor made any written submission

on various grounds. Therefore, the CIT(A) confirmed the order of AO.

6.

Aggrieved by the order of CIT(A), the assessee has filed appeal before the Tribunal. The Ld. AR, at the outset, submitted that both lower authorities have made ex parte orders without granting adequate opportunity of hearing. He submitted that the reasons for non-compliance was bona fide and beyond the control of the assessee. He submitted that all details are available with the assessee and one more opportunity may be given in the interest of justice to plead its case on merit.

6.1 On the other hand, the Ld. Sr. DR supported the orders of lower authorities.

He submitted that adequate and reasonable opportunity of being heard was

granted to the assessee by the AO as well as the CIT(A). He has, however, no

objection if the matter is restored to the CIT(A) for re-adjudication.

7.

We have heard both sides and perused the materials on record. We find from record that the AO had granted adequate opportunity which is clear from the table given at pages 4 and 5 of the assessment order. He has issued 6 statutory notices u/s 142(1) of the Act and also a show cause notice but apart from filing part submission, the assessee did not file requisite details and supporting evidences. The assessee had also not even filed return of income in response to notice u/s 148 of the Act. Therefore, the AO was constrained to pass order u/s 144 of the Act. Though the assessee filed appeal before the CIT(A) within the time allowed under the Act, it did not file any reply to the notices issued u/s 250 of the Act on 3 occasions. It has also not requested for adjournment nor file any written submission in support of the grounds raised before the CIT(A). It is therefore, clear that the assessee has been negligent and callous in pursuing the proceedings before the lower authorities. There was a survey in the business premises of the assessee and hence, the responsibility was more on assessee to explain the transactions carried on by it during the subject year. However, there was total non-compliance by the assessee. However, the Ld. AR requested that in the interest of justice, one more opportunity may be granted to explain the case on merit. He submitted that all the required details are available with the assessee to properly support its return of income. In the interest of justice, we deem it proper to set aside the impugned order of the CIT(A) and restore the matter to the file of the CIT(A) for de novo adjudication after affording adequate opportunity of being heard to the assessee. However, we find that the explanation given by the assessee for non-compliance is suboptimal and leaves something more to be desired. In view of these facts, we set aside the order of CIT(A) and restore the matter to the file of CIT(A) for fresh adjudication subject to payment of cost of Rs.10,000/- (Rupees Ten thousand only) to the credit of the Prime Minister’s National Relief Fund within 30 days from receipt of this order. Subject to such payment, the CIT(A) shall decide the matter on merits in accordance with law after granting adequate and reasonable opportunity of being heard of the assessee. The ground is allowed for statistical purpose. 7.1 We make it clear that we have not expressed our opinion on merit of the case, which the AO shall independently decide as per law. 7.2 Since we have set aside the order of CIT(A) and remanded it to his file for fresh adjudication, the other grounds become academic in nature and do not require adjudication.

7.3 In the result, the appeal of the assesse is allowed for statistical purpose.

ITA No.2255/Mum/2026 (AY 2021-22)

8.

The facts of the appeal are similar to those of ITA No.2254/Mum/2026 (AY

2018-19) decided above. Following the reasons given therein, this appeal is also

set aside to the file of CIT(A) for fresh adjudication. The appeal is allowed for

statistical purpose. 6

9.

In combined result, the appeal of the assessee is allowed for statistical

purpose.

Order is pronounced on 31.07.2026.

Sd/- Sd/- (ANIKESH BANERJEE) (BIJYANANDA PRUSETH) JUDICIAL MEMBER ACCOUNTANT MEMBER *Aniket Chand; Sr. PS MUMBAI Date: 31.07.2026 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, MUMBAI 6. Guard File By Order

Assistant Registrar ITAT, MUMBAI

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