AKSHAY BEARING LIMITED,RAJKOT vs. ASSISSTANT COMMISSIONER OF INCOME TAX, CIRCLE 1(1), RAJKOT., RAJKOT

PDF · subscribers
ITA 592/RJT/2026Status: DisposedITAT Rajkot06 July 2026AY 2016-174 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal held that the Assessing Officer had valid reasons to initiate reassessment proceedings based on the information received. The assessee's claim of the vendor company's non-existence required further examination.

What were the facts?

The assessee, Akshay Bearing Limited, failed to file a return of income for AY 2016-17. The Assessing Officer initiated reassessment proceedings based on information that the assessee purchased immovable property from a company that the assessee claimed was non-existent.

What were the issues?

Whether the Assessing Officer had valid grounds to initiate reassessment proceedings, and if the assessee's claim regarding the non-existence of the vendor company was sufficient to drop the proceedings.

Which sections of the Income-tax Act were involved?

Section 147,Section 148A,Section 144

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, Rajkot Bench, Rajkot

Before: Dr. Arjun Lal Saini & Shri Sonjoy Sarma

For Appellant: Shri Digant Kiyada, Ld. AR
For Respondent: Shri Gopi Nath Chaubey, Ld. Sr.DR
Hearing: 02/07/2026Pronounced: 06/07/2026

आयकर अपीलीय अिधकरण, राजकोट �यायपीठ, राजकोट। In The Income Tax Appellate Tribunal, Rajkot Bench, Rajkot Before Dr. Arjun Lal Saini, Accountant Member And Shri Sonjoy Sarma, Judicial Member आयकर अपील सं./ITA No. 592/RJT/2026 [ �नधा�रण वष�/Assessment Year: 2016-17 ] Akshay Bearing Limited Assisstant Commissioner Of Income Plot No.2511, Road H1, Near Bhoomi Tax, Circle-1(1), Vs. Cements, Metoda GIDC, Aaykar Bhavan, Rajkot-360027, Gujarat Rajkot-360001, Gujarat �थायीलेखासं./जीआइआरसं./PAN/GIR No.: AAOCA3242R (अपीलाथ�/Appellant) (��यथ�/Respondent) Appellant by : Shri Digant Kiyada, Ld. AR Respondent by : Shri Gopi Nath Chaubey, Ld. Sr.DR

Date of Hearing : 02/07/2026 Date of Pronouncement : 06/07/2026

:: ORDER :: Per, Shri Sonjoy Sarma, JM:

Captioned appeal filed by the assessee, pertaining to assessment year (AY) 2016-17, is directed against the order under section 250 of the Income-Tax Act, 1961 (hereinafter referred to as ‘the Act’) passed by the National Faceless Appeal Centre, Delhi [in short ‘NFAC’], dated 15.01.2025, which in turn arises out of an assessment order passed by the Assessing Officer u/s 147 r.w.s. 144 of the Act, dated 12.02.2024.

ITA No. 592/RJT/2026 Akshay Bearing Ltd. 02. The brief facts of the case are that the assessee did not file a return of income for Assessment Year 2016–17. Based on information available through the department’s Insight Portal under the risk management strategy formulated by the CBDT, it was noticed that the assessee had purchased immovable property amounting to Rs.1,34,00,000/- from Rhythm Plastic Pvt. Ltd. Accordingly, the Assessing Officer (AO) issued an enquiry notice under Section 148A of the Income Tax Act to the assessee. In response, the assessee submitted that the concerned entity was not in existence during the relevant period and therefore proceedings should be dropped. The assessee also furnished a Certificate of Incorporation issued by the Registrar of Companies (ROC). The Assessing Officer thereafter issued notice under Section 148A(a) enquiry proceedings to the seller of the property. The seller confirmed that the immovable property, comprising land and building, had been sold to the assessee during the relevant financial year and also furnished a copy of the sale deed. The Assessing Officer observed that the material and documentary evidence available on record clearly demonstrated that the property had been purchased by the assessee during the relevant assessment year. Subsequently, proceedings under Section 148A(d) were initiated. However, no satisfactory reply or clarification was submitted by the assessee. Considering that the assessee had not filed the return of income for the relevant assessment year, the Assessing Officer formed a belief that the source of funds utilized for purchase of property amounting to Rs.1,34,00,000/- remained unexplained. Accordingly, an order under Section 148A(d) was passed and notice under Section 148 was issued. During assessment proceedings, the Assessing Officer examined the sale deed dated 29.03.2016 and observed that the first party was the seller and the second party was the assessee acting through its director. It was also noted

Page 2 of 4

ITA No. 592/RJT/2026 Akshay Bearing Ltd. that payment had been made through account-payee cheques and the transactions were reflected in Form 26AS. The assessee contended that the company had been incorporated on 22.04.2016 and therefore disputed the transaction. However, the Assessing Officer held that the amount of Rs.1,34,00,000/- had in fact been paid by the assessee to the seller through an HDFC Bank account. Accordingly, assessment proceedings under Section 147 r.w.s 144 & 144B were completed and the amount of Rs.1,34,00,000/- was added to the total income of the assessee as unexplained investment under Section 69 of the Act.

3.

Aggrieved by the assessment order, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals) [CIT(A)]. However, despite being granted several opportunities, the assessee repeatedly failed to substantiate its claim and accordingly the Ld. CIT(A) sustained the order of the Assessing Officer.

4.

Thereafter, the assessee preferred an appeal before this tribunal raising multiple grounds. The principal contention of the assessee was that, being in the initial year of incorporation, the assessee could not properly substantiate its claim and therefore one more opportunity should be granted by restoring the matter to the lower authority. We, also noticed that there was also a delay of 383 days in filing the appeal, for which the assessee filed an application seeking condonation of delay and explaining the reasons, considering the same, we condone the delay.

5.

On, the other hand the Ld. DR opposed the request and argued that the conduct of the assessee demonstrated repeated failure to substantiate its

Page 3 of 4

ITA No. 592/RJT/2026 Akshay Bearing Ltd. claims before both authorities and therefore the appeal deserved to be dismissal with costs. We, after hearing the rival submissions of the parties and examining the material available on record, the we observed that although adequate opportunities had been granted, the assessee failed to substantiate its case due to negligent conduct. However, in the interest of justice, and faire play restored the matter to AO by imposing a cost of Rs.5,000/-, directing the assessee to deposit the amount towards the Prime Minister National Relief Fund and furnish proof before the Assessing Officer. The assessee was further directed to cooperate and participate in proceedings without fail.

6.

Accordingly, the appeal of the assessee was allowed for statistical purposes.

Order pronounced in the open court on this 6th day of July, 2026.

Sd/- Sd/- [ Dr. Arjun Lal Saini ] [ Shri Sonjoy Sarma ] लेखा सद�य/Accountant Member �याियक सद�य/Judicial Member राजकोट/Rajkot िदनांक/ Date: 06/07/2026 Copy of the order forwarded to : 1. The assessee 2. The Respondent 3. CIT 4. The CIT(A) 5. DR, ITAT, Rajkot 6. Guard File By order //True Copy// Sr. Private Secretary ITAT, Rajkot

Page 4 of 4

More judgments on Section 147

All 49,210 judgments and leading authorities on Section 147 →

Recent GST High Court judgments

Search GST case law →