AAVIM TRADING SERVICES PRIVATE LIMITED (THROUGH JAYASH DIGE BEING EX-DIRECTOR OF COMPANY),MUMBAI vs. ACIT, CENTRAL CIRCLE 4(3), MUMBAI, MUMBAI

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ITA 4643/MUM/2026Status: DisposedITAT Mumbai28 September 2026AY 2019-2020 pages

In favour of the Revenue: the assessee's appeal was dismissed. From the AI summary of this appeal.

AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the reopening of assessment under Section 147 was valid. The reassessment proceedings were initiated based on tangible material gathered during investigation, indicating that the assessee was not carrying on genuine business activity and was providing accommodation entries. The Tribunal found that the assessee's registered office was found closed, it had negligible employees despite substantial turnover, and lacked commensurate funds, all pointing towards a lack of genuine business. The contention that the company had ceased to exist was not considered a bar to reassessment as the application for striking off was filed after the financial year under assessment. The Tribunal also held that the notice under Section 148 was not bad in law as the AO had the jurisdiction to issue it. The addition of Rs. 29,35,917/- by estimating deemed profit at 0.25% on the turnover of Rs. 1,17,43,66,894/- was upheld, as the assessee failed to establish the genuineness of its transactions and business activities. The Tribunal found that the assessee's business was not genuine and it was engaged in providing accommodation entries. Consequently, the levy of interest under Sections 234B and 234D was also confirmed. The initiation of penalty proceedings under Section 270A was also upheld. The Tribunal did not explicitly address the argument regarding the notice being issued by the Jurisdictional AO instead of the Faceless Assessing Officer, nor did it detail the revenue's specific arguments on each ground.

What were the facts?

The appeals by M/s Aavim Trading Services Private Limited and M/s Aaspan Commodities Trading Private Limited, represented by an ex-director, are against orders of the CIT(A)-54, Mumbai. The lead case, ITA 4643/MUM/2026 for AY 2019-20, concerns Aavim Trading Services Pvt. Ltd. Reassessment proceedings were initiated under Section 147. A notice under Section 148A(b) was issued on March 6, 2023, based on information from survey proceedings at M/s Abans Securities Private Limited. The Investigation Wing noted that the assessee's transactions were primarily with the Abans Group, its email and return filing originated from Abans' premises, it had negligible employees despite substantial turnover, lacked commensurate funds, and its registered office was found closed. Summons to a director were not complied with. The Investigation Wing concluded the assessee was not engaged in genuine business and provided accommodation entries. The total turnover was Rs. 1,17,43,66,894/-. The assessee objected to the material provided for reopening, citing Tata Chemicals Financial Services Limited. An order under Section 148A(d) was passed on March 24, 2023, followed by a notice under Section 148 on March 25, 2023. The assessee later claimed an application for striking off the company was filed on July 14, 2022.

What were the issues?

1. Whether the reopening of assessment under Section 147 of the Income-tax Act, 1961, was valid, considering the grounds that there was no "reason to believe" of income escaping assessment, reassessment based solely on an investigation wing report is void, the "reason to believe" was not based on new tangible material, and reassessment on a mere change of opinion is void. 2. Whether the initiation of reassessment proceedings under Section 148, pursuant to an order under Section 148A(d), was valid, given the contentions that supporting documents were not shared with the Section 148A(b) notice, there was no quantification of escaped income, Section 151 was violated due to lack of approval or DIN, and an opportunity of being heard was not provided before the Section 148A(d) order. 3. Whether the reassessment and assessment order under Section 147 read with Section 143(3) were null and void because the company had ceased to exist from June 1, 2023, and this was intimated to the AO on April 6, 2023. 4. Whether the CIT(A) erred in confirming the treatment of purchases and sales aggregating to Rs. 1,17,43,66,894/- as non-genuine and the addition of Rs. 29,35,917/- by estimating deemed profit at 0.25%, without independent verification and relying solely on DDIT (Inv.) information. 5. Whether the CIT(A) erred in confirming the addition by adopting a 0.25% commission rate based on speculation, with no evidence of commission or cash deposit found during survey or assessment proceedings. 6. Whether the CIT(A) erred in confirming the levy of interest under Sections 234B and 234D. 7. Whether the notice under Section 148 was bad in law and void ab initio as it was issued by the Jurisdictional AO instead of the Faceless Assessing Officer, violating Section 151A and the ruling in Hexaware Technologies Ltd. 8. Whether the CIT(A) erred in confirming the initiation of penalty proceedings under Section 274 read with Section 270A. Assessee's Contentions: The assessee argued that reopening lacked "reason to believe," was based on insufficient material, and constituted a change of opinion. They contended that procedural violations occurred in the Section 148A proceedings, including non-sharing of documents, lack of income quantification, and denial of a hearing. The assessee also argued the assessment was void due to the company's cessation of existence. They disputed the addition of Rs. 29,35,917/- as deemed profit, claiming it was speculative and lacked evidence. The assessee challenged the levy of interest and penalty. They relied on Tata Chemicals Financial Services Limited and Hexaware Technologies Ltd. Revenue's Contentions: The judgment does not explicitly record the revenue's contentions on each ground.

Which sections of the Income-tax Act were involved?

Section 147,Section 148,Section 148A(b),Section 148A(d),Section 151,Section 151A,Section 143(3),Section 234B,Section 234D,Section 274,Section 270A

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCHES, MUMBAI

Before: SHRI OM PRAKASH KANT & SHRI ANIKESH BANERJEE

For Appellant: Shri Sanjay Singh
For Respondent: Ms Kanupriya Damor- Sr
Pronounced: 28.09.2026

Heard together (3 matters)

ITA 4643/MUM/2026
ITA 4646/MUM/2026
ITA 4648/MUM/2026

Read from the judgment's own cause title. This page is filed under one of them.

PER SHRI OM PRAKASH KANT, ACCOUNTANT MEMBER:

The captioned three appeals, filed by two assessees, namely M/s Aavim Trading Services Private Limited and M/s Aaspan Commodities Trading Private Limited, through Shri Jayash Dige, erstwhile Director of the companies , are directed against separate orders passed by the learned Commissioner of Income- tax (Appeals)-54, Mumbai [in short, “the learned CIT(A)”]. Since a common issue in dispute is involved in all these three appeals,

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd same were heard together and are being disposed of by way of this consolidated order for the sake of convenience and brevity.

2.

The parties before us agreed that the appeal of M/s Aavim Trading Services Private Limited in ITA No. 4643/Mum/2026 for A.Y. 2019-20 may be taken as the lead case and that the decision rendered therein would apply mutatis mutandis to the remaining appeals. We, therefore, first take up the appeal of M/s Aavim Trading Services Private Limited for A.Y. 2019-20 for adjudication. The grounds raised by the assessee are reproduced as under:

“Grounds of appeal against the order dated 16.02.2026 passed by the CIT(A), 54, Mumbai u/s. 250 of the Act. Following grounds of appeal are without prejudice to each other: 1. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) - 54 erred in upholding the reopening of assessment under section 147 of the Income-tax Act, 1961, ('the Act') ignoring the following facts: a. There should be "reason to believe" that the income has escaped assessment b. Reassessment merely on the basis of report from investigation wing to be void c. Reason to believe is not based on any new tangible material d. Reassessment on the basis of mere change of opinion is void. (Legal Ground) 2. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) - 54 erred in upholding the initiation of reassessment proceedings under section 148 of the Act, pursuant to an order passed under section 148A(d) of the Act, ignoring the following facts: a. No supporting documents like enquiry report of inspector, statement of Directors has been shared with notice issued under section 148A(b) b. There is no mention of quantification of amount of income alleged to have escaped assessment

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd c. Violation of section 151 as neither copy of approval to issue order under section 148A(d) shared with us nor uploaded over the portal. Further such approval if any does not carry any DIN as it is appearing from order under section 148A(d). d. Opportunity of being heard not given before passing the order under section 148A(d) even after specific request made (Legal Ground) 3. On the facts and in the circumstances of the case and in law, Ld. CIT(A) - 54 has erred in upholding the validity of reopening the reassessment and passing the assessment order 147 r.w.s. 143(3) which is null and void since the company ceased to exist w.e.f. 01.06.2023 and the information was intimated to A.O. on 06.04.2023. (Legal Ground) 4. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) - 54 erred in confirming the action of treating the purchases and sales aggregating to Rs. 1,17,43,66,894/- as non-genuine and in confirming the addition of Rs. 29,35,917/- by estimating deemed profit at 0.25% on such purchases and sales carried out by the Appellant during the financial year 2018-19, without conducting any independent verification and merely relying on information received from DDIT (Inv.), Unit 6(3), Mumbai. (Tax Effect: Rs. 9,16,006) 5. On the facts and in the circumstances of the case and in law, Ld. CIT(A) 54 has erred in confirming the addition made by adopting a commission rate of 0.25% merely on speculation and no evidence of any commission or cash deposit was found in the course of survey action, nor any evidence was brought on records in the assessment proceedings. (Tax Effect: Rs. NIL) 6. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) 54 erred in confirming the levy of interest of Rs. 3,49,740/- under section 234B and Rs. 21,289/- under section 234D of the Act, as levied by the Assessing Officer, in the case of the Appellant (Tax Effect: Rs. 3,71,029) 7. On the facts and in the circumstances of the case and in law, the notice issued under section 148 of the Act is bad in law and void ab initio, as the same has been issued by the Jurisdictional Assessing Officer instead of the Faceless Assessing Officer, in violation of the mandatory provisions of section 151A of the Act and the law laid down by the Hon'ble High Court in the case of Hexaware Technologies Ltd. (Legal Ground)

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd 8. On the facts and in the circumstances of the case and in law, the Ld. CIT(A) - 54 erred in confirming the initiation of penalty proceedings under section 274 read with section 270A of the Act, 1961. (Legal Ground)” 3. Briefly stated, the facts of the case are that the assessee was engaged in the business of trading of agri commodities, precious metals, and trading in derivative and security on recognized exchange. The assessee filed return of income for the year under consideration on 01/10/2019, declaring total loss of Rs. (- )1,87,890/- and book profit of Rs.9,85,034/-.

4.

Subsequently, reassessment proceedings were initiated under the amended provisions of section 147 of the Income-tax Act, 1961 (“the Act”). Consequently, notice under section 148A(b) of the Act was issued on 06.03.2023, wherein the assessee was informed that, during the course of survey proceedings under section 133A conducted at the premises of M/s Abans Securities Private Limited, the books of account of the assessee were found to be maintained at the said premises. On further inquiry, the Investigation Wing noticed, inter alia, (i) that most of the transactions of the assessee were with the Abans Group or entities controlled by the Abans Group; (ii) that the e-mail account of the assessee was being handled from the office of the Abans Group; (iii) that the return of income had been filed from an IP address operated from the premises of the Abans Group; (iv) that, despite substantial turnover, the assessee had no or negligible employees; (v) that the assessee did not appear to have sufficient sources of funds commensurate with its turnover; and

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd (vi) that, on spot verification, its registered office was found closed and unused for a considerable period.

5.

It was further noticed that summons issued to one of the directors, Shri Brijesh Mehta, were not complied with. On the basis of the aforesaid information, the Investigation Wing concluded that the assessee was not carrying on genuine business activity and was engaged in providing accommodation entries. The total sales and purchases reported by the assessee for the year were stated to be Rs.58,54,55,500/- and Rs. 58,89,11,394/- respectively, aggregating to Rs. 1,17,43,66,894/-. It was further observed that no commission income had been disclosed in the financial statements, although, according to the Investigation Wing, commission was ordinarily received for providing such entries.

6.

In response to the notice under section 148A(b), the assessee primarily objected to the material furnished in support of the proposed reopening and relied upon the judgment of the Hon'ble Bombay High Court in Tata Chemicals Financial Services Limited v. Assistant Commissioner of Income-tax, Writ Petition No. 546 of 2022, contending that the material or documents relied upon for reopening ought to have been furnished along with the notice u/s 148A(b) (sic) of the Act. The assessee did not furnish a substantive reply on the merits of the information referred to in the notice. Thereafter, the Assessing Officer passed an order under section 148A(d) on 24.03.2023, holding that the assessee was not carrying on genuine business activity, and notice under section 148 was issued on 25.03.2023.

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd 7. At this stage, the assessee claimed that an application for striking off the company had been filed on 14.07.2022, which was subsequently accepted by the Registrar of Companies with effect from 01.06.2023. It was accordingly claimed that the company stood struck off from the Register of Companies with effect from 01.06.2023 and that discontinuation of business with effect from 13.07.2022 had been communicated to the Assessing Officer on 05.04.2023.

8.

During the assessment proceedings, the Assessing Officer examined the purchases and sales reported by the assessee and, referring to the survey conducted on the Abans Group on 03.12.2019, the nature of the transactions, the financial position of the assessee, the absence of employees, the status of the registered office, the handling of the assessee's e-mail and income-tax return from the premises of the Abans Group and the alleged absence of adequate evidence regarding transportation and delivery of goods, concluded that the transactions were non- genuine. The Assessing Officer also noted that the assessee had claimed that its purchases and sales were supported by invoices, payments through banking channels and payment of applicable GST. However, according to the Assessing Officer, such factors, by themselves, did not establish the genuineness of the transactions. He further observed that the documents furnished by the assessee did not contain details such as lorry numbers, challan numbers, mode of transport, signatures of recipients or gate-pass entries. On this basis, the Assessing Officer treated the transactions as non-genuine and estimated the income

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd attributable thereto at 0.25% of the aggregate purchases and sales of Rs.1,17,43,66,894/-, resulting in an addition of Rs.29,35,917/-. The relevant finding of AO is reproduced as under:

“9.1) Addition on account of Bogus Sale and Purchase transactions 1 1. A Survey u/s 133A was conducted on Abans Group on 03.12.2019 2. The examination of Sales and Purchase shows that the assessee has undertaken most of its transactions with either Abans Group of Companies or those entities which are actually controlled by the Abans Group. 3. On perusal of the details available on record, it is found that the Source of funds is quite less in the company, especially in comparison to the turnover. The turnover has increased greatly in the years from FY 2015-16 onwards. The Profit percentage is minimal in comparison to the turnover. The details of which are as under: Amount in Rs. FY Share Sales Purchases Profit Profit % Capital before tax 2012-13 1,00,000 7,30,66,500 7,28,43,000 1,95,583 0.267678 2013-14 1,00,000 5,73,34,130 5,73,54,146 2,31,513 0.403796 2014-15 1,00,000 3,43,63,000 3,43,44,000 1,15,179 0.335183 2015-16 1,00,000 4,02,52,000 3,30,60,000 1,15,348 0.286565 2016-17 1,00,000 92,79,84,738 99,62,58,412 4,89,672 0.052763 2017-18 1,00,000 39,89,27,040 49,66,25,600 5,51,938 0.138356 2018-19 1,00,000 58,54,55,500 58,89,11,394 9,85,034 0.168250 2019-20 1,00,000 57,76,27,967 54,76,27,967 6,78,855 0.267678

1.

The E-mail of the company is aavimtechnologies@gmail.com.This E- mail was handled from the office of Abans Group of companies during the survey proceedings at the premises of 36/37/38A, Nirmal Bhavan, Nariman point, Mumbai-400001. Further, the ITR of this company was filed from the IP address 103.207.9.67 and this IP address was operated from the premises of Abans Group of companies in 36/37/38A, Nirmal Bhavan, Nariman point, Mumbai-400001 and Room No 25, 2nd floor, Mittal Chambers, Nariman Point, Mumbai 400001. Thus, it is seen that the entire activities like filing of ITR and even the

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd handling of emails is being done from the premises of Abans Group of companies. 1. Spot inquiry was conducted in this case at the address of the Regd office- at Unit No. 131,1st Floor, Gokul Shopping Centre, Borivali West, Mumbai-92. The inspector has reported thatthe premises was closed and unused for a long time and there was no business activityhappening at this premises, even before the implementation of the Lockdown due to the Covid crisis. The inspector report is given below: Date: 02.09.2020 To, The DDIT Unit-6(3), Mumbai Sir, Sub: Spot verification report in the case of M/s Aavim Trading Services Pvt. Ltd. -reg. As directed, I visited the office of M/s Aavim Trading Services Pvt. Ltd. at Unit No. 131, 1" Floor, Gokul Shopping Centre, Borivali West, Mumbai 92. The office of the company is located at address mentioned above (the name board of the company was seen). The office was closed. From the outside it was noticed that the office was unused for a long time and room was very small and dilapidated. On enquiring about the operation of the company from the security person of the Housing Society and neighbouring office staffs, it is found that office always remains closed and no kind of activity is carried out in the office premise for a long time even before the Lockdown due to Covid-19. Report is submitted alongwith photos taken at the above premise. (Mahesh Kumar) Inspector, O/o DDIT (Inv) Unit 6(3) 1. Summons were issued to the Directors whose addresses were in Mumbai. Mr. BrijeshMehta is one of the Directors in this company. Summons was issued to him on 09.09.2020. There was no response on the appointed date. Subsequently, summons was sent andserved on him. Still, no there was no compliance. The inspector report for the summons issued is given below: Dated 17.09.2020 To, The DOIT U

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd Mumbai Sir,

But Service of Summons u/s 131 of the sun Tax Act, 1961, in the case of Shel Bresh that 8-42/304, Nahigandha, CB Rond, Anand Nagar, Dahisar E. Mumbai 400008 2. fir, as directed by the authority, I visited to serve the Burns u/s 131 of the locone Tax Act, 1961, in the case of Bhi Brjesh Kirit Mehta at D- 42/304, Nishigan, C8 Rand, Anand Nagar, Dahisar-K, M400006 3. The person is staying at the given address. Hence thesis by Bryosh Motta who is present at this premises. I wrved the sunnath acknowledgement. Belort leaving the place I took some photos which are enclosed Sor your kind reference and necessary direction

Youry faithly,

Mahinh Humraskan Inspector of Income tax 0/04(2), Mumbai 1. Despite the service of the summons, the director did not attend the on the appointed date. The address of these director is quite small as seen from the inspector report. It indicates that the directors are not men of means. 1. Brijesh Mehta (PAN: BPJPM1410D) is holding 99% of the shares in this company. It was also observed that Sri Brijesh Mehta had acquired all 99% shares in this company during F.Y. 2017-18 from Sri Dilip Kumar Chauhan. The income of Sh Brijesh Mehta as per the ITR for A.Y. 2018-19 is Rs. 3,67,282/-. The address of Brijesh Mehta is. 42/304, Nishigandha, CS Road, Anand Nagar, Mumbai, Maharashtra. His nature of income is Salary Income, business income and Income from other sources only. The ITRs filed by Sri Brijesh Mehta has been verified and the financial position of Sri Brijesh Mehta does not support acquisition of the company from Sri Dilip Kumar Chauhan. Further Sri Dilip Kumar Chauhan had also acquired 99% of shares of the company from Sri Ashutosh Shah F.Y. 2013-14. It indicates that the shareholders are not men of means. 1. The Directors are Brijesh Mehta and Daksh Kumar Soni. The income of Sh Daksh Kumar Soni as per the ITR for A.Y. 2018-19 is Rs. 6,18,338/-. The address of Daksh Kumar Soni is Near Vivekanand School, Mali Mohalla, Makrana, Nagaur, Rajasthan. His nature of income is salary and income from other sources only. It indicates that the directors are not men of means.

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd From the above details, it is clear that M/s. Aavim Trading services Pvt. Itd. do not have sufficient source of fund to support such huge turnover with very low percentage of profit. Further, Sri Brijesh Mehtais the shareholder of this company holding 99% of its shares is a person of little means and his financial position do not support acquisition of this company. Summons was issued but there was no reply received on the appointed date. The entity was not functioning from the premises where its registered office is stated to be. The entire activities like filing of ITR and even the handling of emails is being done from the premises of Abans Group of companies. In view of the afore- mentioned facts, it is found that this company is not carrying out any genuine business activity. 9.2) In view of the afore-mentioned facts, it is found that the assessee is not carrying out any genuine business activity. In view of the same, the assessee was asked to show-cause as to why the assessee should not be regarded as a company not doing any genuine business activity. Also, the assessee was asked to show cause as to why unaccounted commission income @ 0.25% on the total transactions (Sales and Purchases) should not be added to the total income of the relevant year. 9.3) In response, the assessee filed submissions. The assessee has contended that the purchase sale transactions are genuine and supported by invoices, payment to parties through banking channels and payment of GST as applicable. Further, it has been submitted that it has outsourced all the compliance burden to an outside entity including handling of emails. The said submissions have been carefully considered but found to be not acceptable. As discussed in para 9.1 above and on perusal of the details submitted by the assessee, it is found as under: The company does not have sufficient source of fund to support such huge turnover with very low percentage of profit.

The Profit percentage is minimal in comparison to the turnover. Despite having huge turnover, the company does not have any employees or negligible number of employees. The premises from where they have stated to function are unused for a long time. There is no business activity happening from these places. The activities like filing of ITR and even the handling of emails is being done from the premises of Abans Group of companies. It is every strange as to why any emails to an outside agency carrying out accounting and compliance work for the company would outsource handling of company email especially all business related assessee. There are no payments towards warehouse charges and delivery charges inspite of such huge turnover. No proof of delivery such as lorry receipts, has been submitted in support of these transactions

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd The bills/warehouse receipts so submitted by the assessee, however, do not contain any details such as lorry number, challan number, mode of transport, the signature of the person at site who has received the goods or gate pass entry number, etc. Merely because payments have been made to the purchases entities through banking channels, genuineness of the transaction is not established. 9.4) In view of the detailed findings discussed above, it is held that the assessee has failed to establish the genuineness of the sale/purchase shown to have made during the year. In light of the above discussions and conclusions, I am satisfied that the above transactions are non-genuine and bogus. It is a known fact that as per the market practice the commission rate for providing such entries is around 0.25% of the entry provided. Therefore, considering facts and circumstances of the case, the additional net profit of the assessee fromsuch bogus transactions of business is estimated at 0.25% of the total transactions (Sales and Purchases) which is equivalent to the commission or services charges prevailing in the market for providing such accommodation entries. The total of the transactions entered into by the assessee during the year i.e., the total sales and purchases for the year as under: Particulars Amount in Rs Total Sales of the year 58,54,55,500 Total Purchases of the year 58,89,11,394 Total Transactions 1,17,43,66,894 Accordingly, the total transactions (Sales and Purchases)is worked out to Rs. 1,17,43,66,894/- and disallowance @ 0.25% of the total of this transactions worked out to Rs.29,35,917/- This amount of Rs.29,35,917/- is brought to tax in the hands of the assesseeas additional profit on account of such non- genuine transactions made during the year. Penalty proceedings u/s 270A are initiated separately for under reporting of income in consequence to mis reporting of income." 9. In appeal before the learned CIT(A), the assessee did not furnish the details called for. The learned CIT(A), exercising powers under section 250(4) of the Act, issued notices requiring the assessee to furnish transaction-wise details, including the commodities purchased, quantity, purchase price, purchase date, sale date, quantity sold, selling price and sale value. A notice dated 23.12.2025 was followed by further notices dated 01.01.2026, 09.01.2026 and 26.01.2026. The assessee sought adjournment on one occasion but did not furnish the details subsequently called for, including the profit and loss account,

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd balance sheet, annual report and computation of income. The learned CIT(A), therefore, dismissed the appeal principally on the ground that the assessee had failed to furnish the facts and documents necessary for adjudication of the grounds raised before him. He also recorded his view regarding the evidentiary standard applicable to income-tax proceedings and concluded that, in the absence of the requisite details, the additions made by the Assessing Officer could not be disturbed.

10.

Before us, the learned counsel for the assessee, at the outset, raised the legal ground concerning the validity of the reassessment proceedings. It was submitted that the assessment order had been passed in the name of a company which had ceased to exist with effect from 01.06.2023, and that this fact had been communicated to the Assessing Officer on 06.04.2023.

11.

However, as far as maintainability of this appeal on very same analogy, the learned counsel relied upon the judgment of the Hon'ble Supreme Court in Gopal Sri Screws Private Limited (2019) 104 taxmann.com 192 (SC), the decision of the coordinate Bench in Dwarka Portfolio Private Limited (2022) 139 taxmann.com 477 (Delhi-Trib.), and the decision of the coordinate Bench in Chandan Realtors Private Limited, ITA No. 1929/Mum/2021. It was submitted that, in those cases, the validity of proceedings involving a struck-off company had been considered and that the appeal filed by the struck-off company was held maintainable. In the alternative, it was submitted that, if the appeal filed in the name of the struck-off company were

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd held not maintainable, the erstwhile Director, Shri Jayash Dige, may be permitted to pursue the appeal.

12.

The learned counsel also submitted, without prejudice, that the assessee was willing to furnish all relevant books of account and supporting documents to establish the genuineness of the purchases and sales if the matter were restored to the file of the learned CIT(A)

13.

We have heard the rival submissions and carefully perused the material available on record.

14.

We first take up the legal issue relating to the effect of striking off of the assessee-company. The learned counsel has relied upon the decision of the Hon'ble Supreme Court in Gopal Sri Screws Private Limited (supra); the decisions of the coordinate Benches in Dwarka Portfolio Private Limited (supra) and Chandan Realtors Private Limited (supra). We find that the Coordinate Bench in Chandan Realtors Private Limited, after considering the aforesaid decisions, has examined the validity of proceedings initiated in the case of a struck-off company and has held that a notice under section 148 issued to the struck-off company was validly served. The relevant finding of the Tribunal (supra) is reproduced as under:

“7.3 The main legal issue raised in ground No. 1 of the appeal is whether notice u/s.148 of the Act could be issued on the company which was struck off from the records of the registrar of the companies. Under the provisions of Section 248(1) of the companies Act, 2013, the registrar can strike off or remove the name of the company from the registrar of companies. Under section 248(2), the company may file an application for removing the name from the registrar of companies in case of certain situations. The registrar, after following the due process provided u/s.248(5) of the

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd Act, is authorized to strike off name of company from the registrar of companies. The Section 248(7) however provided that the liability if any of any director or manager or any other officer who were exercising any power of management and any member of the company dissolved in subsection 5 may be enforced as if the company has not been dissolved. Further Section 250 of Companies Act, 2013 prescribe that when a company is dissolved under 248, then it cease to operate and certificate of Incorporation shall be deemed to have been cancelled except firstly, for the purpose of realizing the amount due to the company and for payment or secondly, for discharge of the liabilities or obligation of the company. The section 252(1) gives an option to the company for restoration of the name in the registrar of companies. Similarly, Section

8.

In the instant case before us, the issue in dispute is whether the notice issued u/s. 148 of the Act in the case of the company which has been received by the director of the company is invalid. In our opinion, under the provision of Section 248(7) of the Act the liability of the director in respect of the company though it was dissolved was continued even though the company was dissolved under the provisions of Section 248(5) of the Act. Further, the section 250 of the Companies Act, 2013 has made it clear that the company shall not be deemed as dissolved or certificate of incorporation shall be continued for the purpose of discharge of the liabilities or obligation of the Company. Since responding to the notice issued by the Income-tax Department is a statutory liability or obligation of the Company, therefore it is not deemed to be dissolved or the certification of incorporation is not cancelled to that extent, therefore, in such case the notice issued also stands validly issued.

8.1 The Hon'ble Supreme Court in the case of Gopal Shri Scrips (P) Ltd has made this legal position clear which has been further explained by the Tribunal in the case of Dwaraka Portfolia Pvt. Ltd. vs. ACIT-CC 29 in ITA No. 2563/Del/2017 for A.Y. 2014- 15. In the decisions of Hon'ble Bombay, relied upon by the assessee, the section 560 of the Companies Act, 1956 was in operation, but now in view of clear provision of section 250 of the Companies Act, 2013, which has been explained by the Tribunal in the case of Dwaraka Portfolia Pvt. Ltd. (supra) after following the ratio in the case of Gopal Shri Scrips (P) Ltd (supra), therefore, respectfully following the above decisions, we reject the contention of the Id. Counsel for the assessee challenging the validity of notice u/s.148 of the Act. The ground No.1 in the appeal of the assessee is accordingly dismissed.”

15.

Following the aforesaid decision of the coordinate Bench, we find no merit in the contention of the assessee that the reassessment proceedings and the consequential assessment order are rendered invalid merely on account of the subsequent striking off of the company. The coordinate Bench has already

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd considered the legal effect of such striking off and has observed that the company continues to remain liable in respect of its existing liabilities and obligations. Accordingly, the contention of the assessee challenging the validity of the reassessment proceedings on the ground that the company ceased to exist is rejected. Ground No. 3 of the assessee is accordingly dismissed.

16.

We now advert to the grounds raised by the assessee on the merits of the addition of Rs.29,35,917/-. We find that the learned CIT(A) has not adjudicated the issue on merits on the basis of the material relating to the individual purchase and sale transactions. The appeal was dismissed primarily because the assessee did not furnish the transaction-wise details and other documents called for by the learned CIT(A) through notices issued under section 250 of the Act. The relevant part of his decision is reproduced as under:

7.1 Despite clearly asking the appellant to submit the details and facts relevant to the assessee's appeal, the appellant chose not to respond and not to furnish the requisite facts and details necessary for adjudication of the appeal. In the absence of the requisite facts, it is difficult to adjudicate the grounds of appeal. The appellant relied on certain case laws seeking relief. However, in the instant case as a FAA, I desired to give fullest opportunity to the appellant but the appellant did not produce the details/facts necessary for adjudication of the appeal. Merely quoting case laws is not enough, but the appellant has to discharge its duty of providing the facts so necessary for adjudication. 7.2. Facts are integral to assessment and appeal processes especially before fact finding authorities. First Appellate Authority, indeed being a fact-finding authority, cannot adjudicate the appeal only on legal grounds while it being bereft of facts and merits, especially when the assessee exercises a conscious choice of non-compliance during appeal proceedings. Without producing the necessary facts, it cannot be expected that the assessee would be entitled to immunity from assessment order only through legal/technical claims. It sends a wrong message to the entire taxpaying community if assessment order is

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd adjudicated in favour of the appellant only on legal/procedural/technical aspects while the assessee restrains itself from divulging the facts. 7.3. The assessee has duty of candour and good faith. He has to furnish the facts and materials necessary for adjudication of appeal especially when specific particulars were called for. He has to furnish the details called for. Justice is not about getting a favourable decision but about getting a right decision. For rendering right decision, the facts which could not be brought on record by the AO are required to be brought on record. By not furnishing the details, the assessee attempts to make the first appellate authority as redundant. The first appellate stage is the crucial stage in appellate system to gather and stabilise the facts and thereupon the law can be applied. The facts gathered by the Investigation/Assessing authority may not be sufficient to come to a reasonable conclusion in all the cases and that was the reason why additional details were called for. The assessee seems to be adamant and does not seem to face any extra facts apparently for the fear of truth coming out. The facts are the foundation for decision making especially at the first appellate authority. The deliberate act of not furnishing the facts should be viewed with suspicion. It should be concluded that the appellant is seemingly not furnishing the facts for the fear that the colourable devices adopted by him might come to the fore. Hon'ble Supreme Court held in the case of McDowell & Co Ltd, 154 ITR 148 held that tax planning is legitimate but colourable devices cannot be part of tax planning. In the absence of the relevant facts, I am constrained to confirm the additions made by the AO and accordingly dismiss the appeal. 17. At the same time, the assessee has submitted before us that it is willing to furnish the relevant documents and evidences in support of the genuineness of the purchases and sales and has sought an opportunity to place the same before the learned CIT(A). We note that the learned CIT(A) dismissed the appeal not upon an independent finding on the genuineness of the transactions, but principally for the assessee's failure to furnish the transaction-level particulars he had called for under Section 250(4) , a failure the assessee does not dispute, and now offers to remedy.

18.

In these circumstances, and having regard to the peculiar facts of the case and, particularly, to the fact that the merits of the addition have not been examined by the learned CIT(A) on the basis of the complete transaction-wise material, we consider it 17

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd appropriate, in the interest of substantial justice, to provide one effective opportunity to the assessee to place the relevant material on record and have the issue adjudicated on merit, rather than allow the appeal to be foreclosed on default alone.

19.

Accordingly, we set aside the findings of the learned CIT(A) on the merits of the addition and restore the matter to his file for fresh adjudication., after considering such submissions and material as the assessee may place on record. The assessee shall furnish all relevant books of account, invoices, purchase and sale details, evidence of movement/delivery of goods, payment details and such other supporting material as may be relevant for establishing the genuineness of the transactions. The assessee shall also duly comply with the notices and directions issued by the learned CIT(A), failing which the learned CIT(A) shall be at liberty to proceed and decide the appeal on the material available. The learned CIT(A), after considering the material already available on record as well as the evidence that may be furnished by the assessee, shall adjudicate the issue afresh in accordance with law, after affording reasonable opportunity of being heard to the assessee as well as to the Assessing Officer. Needless to state, we have not expressed any opinion on the merits of the alleged purchases and sales or on the quantum of addition of Rs.29,35,917/-, and all issues in this regard are left open for fresh adjudication. Accordingly, the grounds of appeal relating to the merits of the addition are allowed for statistical purposes.

20.

The remaining grounds, including the other legal grounds challenging the reassessment proceedings, are left open at this 18

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd stage, as the same were not pressed for adjudication before us. The assessee shall, however, be at liberty to raise such grounds, in accordance with law, before the learned CIT(A) in the proceedings pursuant to the present order, if so permissible.

21.

Since the findings recorded by the learned CIT(A) in the remaining two appeals are identically worded and the issue relating to the merits of the additions has likewise not been adjudicated on merits, and since the facts and circumstances of those appeals are stated to be identical to those of M/s Aavim Trading Services Private Limited, our findings herein shall apply mutatis mutandis to the remaining two appeals.

22.

In the result, the appeals are partly allowed for statistical purposes, in terms of the aforesaid findings.

Order pronounced in the open court on 28/09/2026.

Sd/- Sd/- ANIKESH BANERJEE OM PRAKASH KANT JUDICIAL MEMBER ACCOUNTANT MEMBER Mumbai Dated: 28/09/2026 Copy of the Order forwarded to : 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file.

ITA 4643/MUM/2026 Aavim Trading Services Pvt. Ltd. ITA 4646 & 4648 /MUM/2026 Aaspan Commodities Trading Pvt. Ltd BY ORDER, //True Copy// (Assistant Registrar) ITAT, Mumbai *K.Kr.p.s*

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