HIMESH HIRALAL MEHTA ,MUMBAI vs. INCOME TAX OFFICER -25(2)(4), MUMBAI

Briefly stated facts of the case are that the assessee filed his return of income on 25.09.2009 declaring total income at Rs. 2,64,228/-. The return of income filed by the assessee was processed u/s 143(1) of the Income Tax Act, 1961 [in short „the act‟]. Subsequently, in view of the information received from the Sales-Tax Department through the office of Director General of Income-tax (investigation), Mumbai that assessee had obtained bogus accommodation entries of purchase without actual delivery of the goods; the Assessing Officer(AO) recorded reasons to believe that income escaped assessment and issued notice u/s 148 of the Act on 21.03.2014. After coupling the notice u/s 148 of the Act by the assessee, statutory notices under the Act were issued for commencing reassessment proceedings. During the re-assessment proceeding, the Assessing Officer issued notice u/s 133(6) of the Act to the alleged bogus purchase parties who had issued accommodation entries bills to the assessee, but said notices issued were returned un-served by the Postal Authorities with the remark parties “not known/left.” In the circumstances, the AO asked the assessee to produce those parties for verification. However the assessee failed to produce those parties before the AO. The assessee also failed to substantiate delivery of the goods from those parties. Accordingly, the AO disallowed entire amount of bogus/hawala purchase amounting to Rs.63,29,026/-. On further appeal, Ld. CIT(A) also upheld that disallowance in view of non-compliance on the part of assessee before him.

We have heard the rival submissions advanced by the parties and perused the material available on record. Insofar as the issue of non-compliance before the learned Ld. CIT(A) is concerned, the learned counsel for the assessee has submitted that out of the seven notices issued by the Ld. CIT(A) for hearing the appeal, two pertained to the period during the COVID-19 pandemic and hence could not be complied with. With respect to the remaining notices, it has been submitted that the notice dated 11.05.2023 was duly complied with on 19.10.2023, and further, in response to the subsequent notice dated 12.10.2023, a partial response was filed on 29.11.2023 along with certain relevant information. However, it is the grievance of the assessee that the Ld. CIT(A) passed the impugned order without considering the submissions so filed.

As we have remanded the matter to the file of the Ld. CIT(A) for de novo consideration, Ground No. 2 raised on merit is rendered academic at this stage and does not require adjudication. Accordingly, Ground No. 2 is dismissed as infructuous.

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