SECUR CREDENTIALS LIMITED,MUMBAI vs. ASSESSMENT UNIT, INCOME TAX DEPARTMENT, MUMBAI

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ITA 2919/MUM/2026Status: DisposedITAT Mumbai23 September 2026AY 2017-188 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal condoned the delay of 50 days in filing the appeal, subject to a cost of ₹10,000/- to the Prime Minister's National Relief Fund, considering the ex-parte decision of the first appeal and the need for a merits-based examination. On the merits, the Tribunal noted that the assessee had not effectively prosecuted its appeal before the CIT(A) and had not presented its explanations regarding the discrepancies found by the AO. The Tribunal observed that the AO had identified discrepancies in the purchase documents, including an invoice referencing GST Rules, 2017 before GST implementation and differences between the assessee's and supplier's documents. The CIT(A) had upheld the addition of ₹27,56,000/- under Section 69C and disallowed depreciation of ₹8,26,800/-. The Tribunal, in the interest of justice, set aside the impugned order and restored the matter to the file of the CIT(A) for de-novo consideration, directing the assessee to deposit the cost and cooperate with the proceedings. The Tribunal expressly left undecided the validity of the reassessment proceedings and the merits of the additions.

What were the facts?

The assessee, Secur Credentials Limited, filed an appeal against the order of the Ld. CIT(A) for Assessment Year 2017-18. The assessment was reopened under Section 147 based on information from the Investigation Wing regarding accommodation entries provided by M/s KMP & Sons Trading Pvt. Ltd. The Assessing Officer (AO) alleged bogus purchases of ₹27,56,000/- for capital assets from this entity and disallowed depreciation of ₹8,26,800/-. The assessee's appeal before the CIT(A) was dismissed due to non-compliance with notices. The assessee then filed an appeal before the ITAT, Mumbai, with a delay of 50 days, citing administrative staff issues and delayed forwarding of the order to their tax consultant. The ITAT considered the delay and the fact that the first appeal was decided ex-parte.

What were the issues?

1. Whether the Ld. CIT(A) erred in confirming the assessment order passed under Section 147 read with Section 144B of the Income Tax Act, 1961, and the notice of demand under Section 156, deeming it illegal, wrong, and bad in law? The assessee argued that the assessment order and demand notice were illegal. The revenue did not record any specific arguments on this point. 2. Whether the Ld. AO erred in issuing notices under Section 148A and Section 148 of the Act, dated 19.04.2021 and 31.07.2022, respectively, which were barred by limitation under Section 149 of the Act? The assessee contended that the notices were time-barred. The revenue did not record any specific arguments on this point. 3. Whether the Ld. AO erred in issuing notices under Section 148A and Section 148 without following the provisions of Section 151 of the Act regarding sanction for the issue of notice? The assessee argued that the required sanction was not obtained. The revenue did not record any specific arguments on this point. 4. Whether the notice under Section 148 dated 31.07.2022 was invalid and void for failing to mention the Document Identification Number (DIN) as per CBDT Circular No. 19/2019? The assessee argued that the absence of DIN rendered the notice void. The revenue did not record any specific arguments on this point. 5. Whether the Ld. AO erred in not determining the sum payable by the assessee while passing the order under Section 143(3) read with Section 147 of the Act? The assessee prayed to quash the assessment order. The revenue did not record any specific arguments on this point. 6. Whether the Ld. CIT(A) erred in confirming an addition of ₹35,82,800/- on account of alleged bogus purchases of capital assets and depreciation disallowance, ignoring that the notice under Section 148 was issued merely on the basis of third-party information? The assessee argued that the reopening was based solely on third-party information and that the addition was confirmed without application of mind. The revenue did not record any specific arguments on this point. 7. Whether the Ld. CIT(A) erred in dismissing the appeal without considering the facts, explanation, and documents submitted by the appellant company? The assessee contended that its submissions were not considered. The revenue did not record any specific arguments on this point.

Which sections of the Income-tax Act were involved?

Section 147,Section 144B,Section 156,Section 148,Section 149,Section 151,Section 148A,Section 69C,Section 143(3),Section 151A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI

Before: SHRI SIDDHARTHA NAUTIAL & SHRI PRABHASH SHANKAR

For Respondent: Shri Rajgopal K Parthasarathy - SR

आदेश / ORDER PER SHRI SIDDHARTHA NAUTIAL, JUDICIAL MEMBER :

This appeal is filed by the Assessee against the order of Ld. NATIONAL FACELESS APPEAL CENTRE / Ld. CIT (A) order dated 13-Mar-2026 for the Assessment Year 2017-18. The Assessee has raised the following grounds of appeal:

1.

On the facts and the circumstances of the case and in law, the Ld. CIT A has erred in confirming the impugned assessment order passed us 147 rws 144B of the Act dated 19.05.2023 and the notice of demand issued us 156 of the Act passed by the Ld. AO which is illegal, wrong and bad in law. 2. On the facts and circumstances of the case and in law, the learned CIT A has erred in dismissing the appeal without considering the facts, explanation and documents submitted by the appellant company.

3.

On the facts and circumstances of the case and in law, the Ld. AO has erred in issuing the notice us 148 of the Act dated 19.04.2021 ie deemed to be notice us 148Ab as well as notice us 148 of the Act dated 31.07.2022 in light of the provision of Section 149 of the Act which is barred by limitation. 4. On the facts and circumstances of the case and in law, the Ld. AO has erred in issuing the notice us 148Ab in light of the provision of Section 149 of the Act. Notice issued us 148A and 148 shall be subject to the provision of Section 151 of the Act. Provision of Section 151 for sanction for issue of notice has not been followed by the Ld. AO while issuing SCN us 148Ab and 148 of the Act. 5. On the facts, circumstances of the case and in law, that the notice us 148 of the Act dated 31.07.2022 issued by the Ld. AO is invalid and void as it fails to generate OR mention Document Identification Number DIN on its body in adherence to Circular No. 192019 dated 14.08.2019 issued by the CBDT. The Ld. AO has grossly mistaken and erred in not mentioning DIN in such notice which is bad in law and goes to root matter for initiating the reopening case of the appellant. 6. On the facts and the circumstances of the case and in law, the Ld. Jurisdictional Assessing Officer Ld. JAO has erred in issuing the impugned notice us 148 of the Act dated 31.07.2022 and not by a Faceless Assessing Officer FAO as is required by the provision of Section 151A of the Act. 7. On the facts, circumstances of the case and in law, the Ld. AO erred in not determining the sum payable by the appellant while passing the order us 1433 rws 147 of the Act. It is therefore prayed to your honour to quash the assessment order and give necessary directions in this regard. 8. On the facts and circumstances of the case and in law, the Ld. CIT A has erred in dismissing the appeal and confirming an addition of Rs 35,82,800 on account of alleged bogus purchases of capital assets and depreciation disallowance made by the Ld. AO ignoring the facts that the notice us 148 was issued merely on the basis of third party information. 9. On the facts and circumstances of the case and in law, the Ld. CIT A has erred in dismissing an appeal and confirming an addition made by the Ld. AO without any application of mind and without considering the facts and circumstances of the case. 10. On the facts and circumstances of the case and in law, neither the learned CIT A nor the learned Assessing Officer has made any independent inquiry relating to the information received from third party. The basis of reopening itself is wrong and therefore the whole proceeding is void ab initio.

11.

On the facts and circumstances of the case and in law, the Ld. CIT A has erred in dismissing the appeal and confirming an addition of Rs 35,82,800 Rs 27,56,000 Alleged Bogus Purchases of Capital Assets, Rs 8,26,800 Depreciation Disallowance on account of bogus purchases of capital assets being allegedly treated as unexplained expenditure for the year under consideration. 12. That the appellant craves leave to add, alter, modify OR amend the grounds of appeal before the appeal is heard and disposed off.

2.

The brief facts of the case are that the assessee, Secur Credentials Limited, filed its return of income for A.Y. 2017-18 declaring total income of ₹2,61,97,430/-. The Assessing Officer reopened the assessment on the basis of information received from the Investigation Wing pursuant to search proceedings carried out in the case of the One World Group. As per the information available with the Assessing Officer, M/s KMP & Sons Trading Pvt. Ltd., an entity which was controlled by the said group, was engaged in providing accommodation entries and the assessee had obtained a bogus purchase entry of ₹27,56,000/- from the said concern.

3.

During the reassessment proceedings, the assessee filed various details, like its financial statements, bank statements, cash book, purchase register, ledger account of M/s KMP & Sons Trading Pvt. Ltd., purchase invoice and delivery challan. The Assessing Officer, however, observed that there were certain discrepancies in the documents furnished by the assessee in support of the purchase made the assessee. The Assessing Officer observed that the invoice dated 13.01.2017 referred to the GST Rules, 2017 even though GST was introduced subsequently. The Assessing Officer also noticed differences between the copies of the invoice and delivery challan furnished by the assessee and those furnished by the supplier. According to the Assessing Officer, the documents also did not contain proper particulars regarding transportation and delivery of the goods.

4.

On the basis of these discrepancies, the Assessing Officer held that the purchase of computers, laptops and other items amounting to ₹27,56,000/- was not genuine and he treated the same as unexplained expenditure under section 69C of the Act. Since the assessee had capitalised the said assets and claimed depreciation of ₹8,26,800/-, the Assessing Officer also disallowed the depreciation.

5.

The assessee carried the matter in appeal before the learned CIT(Appeals).

6.

During the appellate proceedings, notices were issued to the assessee on 01.10.2023, 18.09.2024, 29.04.2025 and 24.07.2025. However, there was no compliance on behalf of the assessee and no written submissions were filed. The learned CIT(Appeals), therefore, proceeded to decide the appeal on the basis of the material available on record.

7.

The learned CIT(Appeals) upheld the validity of the reassessment proceedings holding that the Assessing Officer had acted on specific information received from the Investigation Wing regarding the accommodation entry. On merits, the learned CIT(Appeals) agreed with the Assessing Officer that the invoice dated 13.01.2017 referring to the GST Rules, 2017 and the other discrepancies noticed in the supporting documents created serious doubt regarding the genuineness of the purchase. The CIT(Appeals) also confirmed the addition of ₹27,56,000/- under section 69C of the Act and also confirmed the disallowance of depreciation of ₹8,26,800/-. The learned CIT(Appeals) also rejected the contention that the assessee was denied opportunity of cross- examination, by observing that the addition was not based merely upon the statement of a third party but was also supported by discrepancies noticed in the documents furnished by the assessee itself. The appeal of the assessee was accordingly dismissed.

8.

The assessee is in appeal before us against the order passed by the learned CIT(Appeals) dismissing the appeal of the assessee.

9.

We have considered the material available on record. At the outset, we find that there is a delay of 50 days in filing the present appeal before the Tribunal. The assessee has filed an application for condonation of delay supported by an affidavit of its Director.

10.

The assessee submitted that the order of the learned CIT(Appeals) dated 26.11.2025 was received through e-mail and the appeal was required to be filed on or before 25.01.2026. According to the assessee, during the relevant period there was no proper administrative staff available in the company and, therefore, the e-mail containing the appellate order was not attended to in time. The assessee has also stated that the order could not be forwarded to the tax consultant and, as a result, the appeal could not be filed within the prescribed period.

11.

We have considered the explanation given by the assessee. There is no dispute that the assessee ought to have been more careful in pursuing its appeal. At the same time, the delay has been explained by way of an affidavit and there is nothing before us to suggest that the delay was deliberate or that the assessee stood to gain any advantage by filing the appeal belatedly.

12.

We also find it relevant that the first appeal of the assessee has been decided without any representation on its behalf. The issues involved relate to an addition of ₹27,56,000/- under section 69C of the Act and disallowance of depreciation of ₹8,26,800/-, both of which arise from disputed factual matters relating to the purchase and existence of the assets. In our view, the assessee should not be denied an opportunity of having these issues examined on merits merely because of the delay in approaching the Tribunal.

13.

At the same time, the assessee cannot be completely absolved of its responsibility. The order of the learned CIT(Appeals) was admittedly received through e-mail and the assessee was expected to have proper arrangements for attending to statutory communications. We therefore consider it appropriate to condone the delay in the interest of justice, but subject to payment of cost of ₹10,000/- to the Prime Minister's National Relief Fund.

14.

Coming to the merits of the appeal, we find that the learned CIT(Appeals) had granted several opportunities to the assessee. However, no real representation was made and the appeal was decided by CIT(Appeals) on the basis of the material available on record.

15.

We further notice that during the assessment proceedings the assessee had furnished various documents in support of the purchase, including the purchase invoice, delivery challan, ledger account and other records. The Assessing Officer found certain discrepancies in these documents and on that basis treated the purchase as non-genuine. The assessee, however, did not purposefully prosecute its appeal before the learned CIT(Appeals) and therefore did not have the benefit of placing its explanation regarding these discrepancies before the first appellate authority.

16.

In these circumstances, we are of the view that one final opportunity should be given to the assessee to present its case before the learned CIT(Appeals).

17.

We therefore consider it appropriate, in the interest of justice, to set aside the impugned order and restore the matter to the file of the learned CIT(Appeals) for de-novo consideration.

The assessee shall deposit a sum of ₹10,000/- with the Prime Minister's 18. National Relief Fund and furnish proof of such payment before the learned CIT(Appeals). The assessee is also directed to cooperate with the appellate proceedings and shall not seek unnecessary adjournments. In case the assessee fails to appear or cooperate despite reasonable opportunity, the learned CIT(Appeals) shall be at liberty to decide the appeal on the basis of the material available on record in accordance with law.

19.

In the result, the appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 23rd Sep 2026.

Sd/- Sd/- PRABHASH SHANKAR SIDDHARTHA NAUTIYAL ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai Dated: 23.09.2026 KRK, SPS Copy to: SECUR CREDENTIALS LIMITED, MASTERMIND 4, ROYAL PALMS ESTATE OFFICE NO. 428, AAREY MILK COLONY, 1 GOREGAON EAST, MUMBAI-400065, MAHARASHTRA

ASSESSMENT UNIT, INCOME TAX DEPARTMENT, 2 MUMBAI, MAHARASHTRA, MUMBAI-400065, MAHARASHTRA

3 THE PCIT / CIT, 4 THE D.R., ITAT, MUMBAIBENCH 5 GUARD FILE

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