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Income Tax Appellate Tribunal, “D” BENCH, MUMBAI
Before: SHRI PAVAN KUMAR GADALE & SHRI AMARJIT SINGH
O R D E R
PER PAVAN KUMAR GADALE JM:
1. The assessee has filed the appeal against the order of the Commissioner of Income Tax (Appeals) – 22, Mumbai passed u/s 143(3) r.w.s 147 and 250. The assessee has raised the following grounds of appeal:
Failure of Natural Justice
M/s. D Ravialal Resources Management Pvt Ltd., Mumbai. - 2 -
The Id. CIT (A) erred in passing ex-parte Order on the failure of equity and justice ignoring the facts merits and submission to the prejudice of the Appellant; therefore, the Order impugned may be vacated as deserves to be set- aside.
TECHNICAL GROUND: Failure of jurisdictional tests
2. Defective Notice u/s. Absence of tangible materials- change of opinion -borrowed information not coming out of AO's own volition - Notice may be quashed. The Id. CIT(A) erred in not appreciating that on the failure of valid jurisdictional tests; the entire re-assessment proceeding gets vitiated for want of proper legal sanction and consequently, the Order impugned may be vacated for the following reasons: (a) that the reasons to believe based on the report of the DDIT (Inv.) Wing which is not coming out of Assessing Officer's own volition. (b) that the reasons to suspect cannot be the reasons to believe; therefore, on jurisdictional failure at the root level, it becomes non-curable defect u/s. 292BB, hence, the notice may be quashed.
MERITS:
3. Addition on account of ingenuine Purchases - Rs.63,26,104/-
The Id. CIT (A) erred in confirming the addition on account of alleged ingenuine purchases against which basic onus was discharged by providing the bills, vouchers, consumption nexus, etc, therefore, when the purchases
M/s. D Ravialal Resources Management Pvt Ltd., Mumbai. - 3 - having strong nexus to the utilization, the disallowance of purchases is not justified and the same may be deleted.
Levy of Penal Interest The Appellant, on merits, denies its liability to penal interest.
The appellant craves leave to add, alter or amend all or any of above grounds of appeal.
The assessee has filed an application for condonation of delay in filling the appeal before the Honble Tribunal and supported by an affidavit. The Ld.DR has no serious objections. We considered the facts and condoned the delay and the appeal is admitted.
The brief facts of the case are that the assessee company is engaged in the business of civil contractor works. The Assessee has filed the return of income for the A.Y 2009-10 on 28.09.2009 disclosing a total income of Rs. 1,41,84,649/-.The case was selected for scrutiny and assessment u/s 143(3) of the Act was completed on 19.12.2011 determining the taxable income of Rs.1,47,46,250/-.Subsequently the Assessing Officer(A.O.) has received the information from DGIT(Inv), Mumbai that the assessee has obtained bogus purchases bills from the dealers and is M/s. D Ravialal Resources Management Pvt Ltd., Mumbai. - 4 - one of the beneficiary. During the F.Y 2008-09, the assessee has made purchases from three dealers aggregating to Rs.63,26,104/-. The A.O has reason to believe that the income has escaped the assessment and issued notice u/s 148 of the Act. Subsequently, the A.O. has issued notice u/s 143(2) and 142(1) of the Act. In compliance to the notice, the Ld. AR has submitted the details on 21.01.2014 in respect of the purchase transactions from the parties. The A.O to test check the genuineness has called for the additional information and is of the opinion that the assessee could not substantiate with genuineness of the transactions and made addition of bogus purchases of Rs. 63,26,104/- and assesseed the total income of Rs. 2,10,72,350/- and passed order u/s 143(3) r.w.s 147 of the Act dated 31.01.2014.
4. Aggrieved by the order, the assessee has filed an appeal with the CIT(A), the CIT(A) considered the grounds of appeal, findings of the A.O. and issued notice to the assessee but there was no compliance and therefore considering the information on record has confirmed the action of the A.O and dismissed the appeal. Aggrieved by the order of the CIT(A), the M/s. D Ravialal Resources Management Pvt Ltd., Mumbai. - 5 - assessee has filed an appeal before the Hon’ble Tribunal. At the time of hearing, none appeared on behalf of the assessee and the Ld.DR supported the order of the CIT(A).
5. We heard the Ld. DR submissions and perused the material on record. Prima-facie the CIT(A) has passed the order considering the fact that there is no appearance in spite of providing adequate opportunity of hearing and the notices were issued. Therefore, the CIT(A) was of the opinion that the assessee is not interested in prosecuting the appeal and dismissed the appeal ex-parte confirming the action of the assessing officer. We find the Ld.CIT(A) has issued the notices of hearing referred in the order, but there was no response and thus the Ld.CIT(A) came to a conclusion that the assessee is not interested and decided the appeal based on the information available on record. We find that the assessee has raised grounds of appeal challenging the additions of the assessing officer and there could be various reasons for non appearance which cannot be overruled. We considering the principles of natural justice shall provide one more opportunity of hearing to the assessee to substantiate
M/s. D Ravialal Resources Management Pvt Ltd., Mumbai. - 6 - the case before the CIT(A) along with evidences and information. Accordingly, we set aside the order of the CIT(A) and remit the entire disputed issues to the file of the CIT(A) to adjudicate afresh on merits and the assessee should cooperate in submitting the information for early disposal of the appeal and allow the grounds of appeal of the assessee for statistical purposes.
In the result, the appeal filed by the assessee is treated as allowed for statistical purposes.
Order pronounced in the open court on 08.08.2022.