INDARMAL MAGRAJJI KOTHARI (HUF),MUMBAI vs. ITO- 23(2)(6), MUMBAI

IN THE INCOME TAX APPELLATE TRIBUNAL MUMBAI BENCH “C”, MUMBAI BEFORE SHRI ANIKESH BANERJEE, JUDICIAL MEMBER AND SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER ITA No.9397/Mum/2025 (Assessment year: 2018-19)

Indarmal Magrajji Kothari vs ITO Ward 23(2)(6), Mumbai (HUF) Piramal Chambers Dr. SS Rao 4th floor 195, Kalbadevi Road Marg, Parel, Mumbai-400012 Kalbadevi, Mumbai-400002 PAN:AAAHI0056G APPELLANT RESPONDENT Assessee by : Shri Ravikant Pathak- CA Revenue by : Shri V.S. Mahajan (Sr. DR) Date of hearing : 13/05/2026 Date of pronouncement : 20/05/2026 O R D E R Per: Anikesh Banerjee (JM): The instant appeal of the assessee filed against the order of the NFAC, Delhi [for brevity the “Ld. CIT(A)”], order passed under section 250 of the Income Tax Act 1961 (for brevity ‘the Act’) for Assessment Year 2018-19, date of order 26.11.2025. The impugned order emanated from the order of the Assessment Unit Income Tax Department (for brevity the “Ld. AO”) order passed under section 147 r.w.s. 144 r.w.s. 144B of the Act, date of order 24.02.2024.

2 ITA No.9397/Mum/2025 Indarmal Magrajji Kothari (HUF) 2. The brief facts of the case are that the assessee filed the return by declaring total income Rs.3,23,140/-. The information has been received from DDIT (Inv.) Wing-3(1) Kolkata flagged on Insight Portal under the head high risk CRI/VRUSS. As per the information the search and survey was carried out in the case of Shri Kamal Kumar Jain, Deepak Upadhyay and Shri Ranjeet Kumar Sen and as per the information they are entry provider who facilitate the bills by bogus purchase. The assessee is the beneficiary of the purchase from Flyjoy Distributors Pvt. Ltd. Kolkata, which is a sell company controlled by Shri Deepak Upadhyay who was known as entry operator. The Ld. AO found that the assessee is a beneficiary of the transaction amount of Rs.82,24,207/- and accordingly, Ld. AO added back with the total income of the assessee. The aggrieved assessee filed an appeal before the Ld. CIT(A). The Ld. CIT(A) passed the exparte order and uphold the impugned addition. Being aggrieved assessee filed an appeal before us. 3. The Ld. AR argued and contended that in the assessment proceeding the assessee had filed an adjournment petition related to the notice dated 08.01.2024. Further, he contended that in the appellate proceeding, the assessee complied the notice dated 04.04.2025 and submitted the adjournment petition for granting time filing the details evidence. The Karta of the assessee Mr. Manoj Indarmalji Kothari filed a notarized affidavit duly executed on 12.05.2026 and stated the detailed reasons for non-appearance before the Ld. CIT(A). The assessee was fully dependent in Income tax matter on its Accountant, Mr. Ganesh Rajaramji Borana and the relevant income tax proceedings and communications with the Income Tax Department was under control of the accountant. A notarized affidavit duly filed by the Accountant, Mr. Ganesh Rajaramji Borana executed on 12.05.2026. The relevant part of the affidavit is reproduced as below:

3 ITA No.9397/Mum/2025 Indarmal Magrajji Kothari (HUF) “4. That the assessment proceeding of HUF was reopened vide notice dated 13/04/2022 issued u/s 148 of the Act on the ground that the HUF has allegedly indulged into bogus purchases. Various documents have been filed during the assessment proceeding. Acknowledgement is enclosed and forms part of this affidavit. Nonetheless, the re-assessment proceeding has been completed vide order dated 24/02/2024 passed u/s 147 r.w.s. 144B of the Act by disallowing the alleged purchases. 5. That being aggrieved, HUF filed an appeal before the NFAC on 04/04/2024. During the pendency appeal, four notices have been issued on 01/05/2024, 18/03/2025, 04/04/2025 and 10/11/2025. These notices have been sent to me by Shri Manoj Kothari, Karta of HUF on my email id grb787@gmail.com. 6. That with the hearing notices from CIT(A), we approached a Chartered Accountancy firm namely M/s. A.T. Jain and Co who asked us to provide various documents. Pending the collation of documents, I took an adjournment on 21/04/2025 against the notice issued on 04/04/2025. Copy of acknowledgement enclosed and forms part of this affidavit. 7. That another notice dated 10/11/2025 issued by CIT(A) has been sent to me by Shri Manoj Kothari fixing the date of hearing on 19/11/2025. However, due to my pre-occupation of finalizing the schedules/annexures of tax audit report as an accountant in my other client's case; I inadvertently and due to mistake missed to comply with this notice. 8. That I realized the mistake of non-compliance of the notice on receipt of CIT(A)'s order on 26/11/2025.” 4. The Ld. DR argued and stands in favor of the order of revenue authorities. But related to submission of affidavit by the assessee and accountant of the assessee the Ld. DR had not made any objection against the submission of the Ld. AR. 5. We heard the rival submission and considered the documents available in the record. The assessee had filed the return and assessee’s case was reopened related to this transaction with bogus entry operator. In investigation the department has got the information that the assessee made the transaction and purchase from Flyjoy Distributor Pvt. Ltd. which was treated by the Income Tax Department as a shell company. The Ld. AO confirm the addition amount to

4 ITA No.9397/Mum/2025 Indarmal Magrajji Kothari (HUF) Rs.82,24,207/-. The Ld. CIT(A) had passed the order in exparte and uphold the addition. The Ld. AR in argument demonstrated that the assessee had complied the notice during the assessment and in appeal proceeding and filed the adjournment for filing evidence in support of its claim. But none of the authorities had made any remark in the impugned orders related to the part compliance of the assessee. The affidavit of the karta of the assessee and the accountant are duly submitted for explanation non-compliance before the revenue authorities. In our considered view, the reasonable opportunity for the assessee was denied in both the stages. Hence, we restore the matter to the file of Ld. CIT(A) for denovo adjudication. We are not expressing any view on merits of the case as the appeal proceeding should be uninfluenced. Needless to say that assessee should get a reasonable opportunity in set aside proceeding and any evidence wants to file should be allowed as per the law. On the other hand, the assessee should be diligent and cooperative in set aside assessment proceeding. 6. In the result, the appeal of the assessee bearing ITA No.9397/Mum/2025 is allowed for statistical purpose. Order pronounced in the open court on 20th day of May 2026. Sd/- Sd/- (MAKARAND VASANT MAHADEOKAR) (ANIKESH BANERJEE) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai,िदनांक/Dated: 20/05/2026 SAUMYASr.PS Copy of the Order forwarded to: 1. अपीलाथ�/The Appellant , 2. �ितवादी/ The Respondent. 3. आयकरआयु� CIT िवभागीय�ितिनिध, आय.अपी.अिध., मुंबई/DR, ITAT, 4.

5 ITA No.9397/Mum/2025 Indarmal Magrajji Kothari (HUF) Mumbai 5. गाड�फाइल/Guard file. BY ORDER, //True Copy// (Asstt. Registrar), ITAT, MUMBAI