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Income Tax Appellate Tribunal, “SMC” BENCH, MUMBAI
Before: SHRI PRASHANT MAHARISHI, AM & SHRI PAVAN KUMAR GADALE, JM Shri Pravin Futarmal Jain
This appeal is filed by the assessee against the order passed by the Commissioner of Income-tax (Appeals)-53, Mumbai [CIT(A)] dated 05.04.2019 for AY 2010-11, raising the following grounds of appeal.
“1. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeal) erred in (a) arriving at the conclusion that purchases made of Rs. 5904762/- from M/s Om Shanti Trading Co. is non-genuine (b) confirming addition of Rs. 295238/- on above basis made by the Assessing Officer to the total income of the appellant.
On the facts and in the circumstances of the case and in law the learned Commissioner of Income tax (Appeals) erred in confirming action of the Assessing Officer whereby he has not allowed adjustment of brought forwarded capital loss of Rs. 3515/- against income for the year under the head 'Capital gain'.
On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) erred in and failed to appreciate that (a) Assessing Officer failed to issue and serve notice under section 148 of the Act before making assessment under section 143(3) row’s 147 of the Act.
(b) The learned Assessing Officer failed to provide reason of reopening to the appellant before completing assessment under section 143(3) r.w.s. 147 of the Act.
(C) Proceeding initiated under section 147 /148 of the Act is on the basis of reason to suspect and not on reason to believe.
(e) The initiation of proceeding under section 147 of the Act and issuance of notice under section 148 is without jurisdiction, bad in law and contrary to the provisions of the Act and liable to be cancelled / annulled.
4. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) erred in affirming order made under section 143(3) r.w.s. 147 of the Act inspite of the fact that no notice under section 143(2) of the Act is issued and served upon the appellant before making assessment under section 143(3) r.w.s. 147 of the Act.
5. On the facts and in the circumstances of the case and in law the learned Commissioner of Income Tax (Appeals) erred in confirming order made under section 143(3) r.w.s. 147 of the Act by the learned Assessing Officer which is without jurisdiction, illegal, bad-in-law, ultra vires and without allowing reasonable opportunity of the hearing, without appreciating the facts, submission and evidences in their proper perspective, without providing copies of material used against the appellant and without providing cross examination of persons whose statements are relied upon, is liable to be annulled.
7. The appellant crave leave to add, amend, alter and / or vary any of the ground of appeal before or at the time of hearing.”
2. The brief facts of the case shows that assessee is an individual who filed his return of income on 30th September, 2010 at Rs. 5,14,590/-. The case of the assessee was reopened by issue of notice under section 148 of the income-tax Act, 1961 (the Act) on 31.03.2016. The Assessing Officer passed the order under section 143(3) read with section 147 of the Act on 12.12.2016 assessing the income of Rs. 8,31,260/-. The Assessing Officer found that the assessee has purchased accommodation entries in the form of hawala transaction amounting to Rs. 59,04,762/- from Om Shanti Trading Co. as bogus purchases. The Assessing Officer made addition of Rs. 2,95,238/- being 5% of the bogus purchases.
3. Assessee aggrieved with that order preferred the appeal before the learned CIT(A). The learned CIT(A) granted two opportunities which were not complied with by the assessee. Hence, he dismissed the appeal of the assessee on the merits of the case. He upheld the reopening of the assessment as well as the quantum addition of Rs. 2,95,238/- made by the Assessing Officer. The assessee aggrieved with that of the order has preferred the appeal before us.
The learned Authorized Representative challenged the reopening of assessment as well as the addition on account of bogus purchases. The argument of the assessee was that ii. The addition could not be made on the merits of the case. He placed on record detailed written submission on all the six grounds and also referred to paper book containing 29 pages submitted before us.
The learned Departmental Representative vehemently submitted that before the learned CIT(A) assessee did not avail any opportunity of hearing and therefore, now this contention should not be taken into consideration.
We have carefully considered the rival contentions and perused the order of lower authorities. We find that the appeal of the assessee was decided by the learned CIT(A) on merits of the case. However, the assessee could not represent before him. The learned CIT(A) fixed the hearing on 30.11.2018, 03.01.2019 and 27.03.2019. The assessee could not comply with the same. Now before us, the assessee has specifically stated that there are several judicial precedents by which the addition made by the learned Assessing Officer and confirmed by the learned CIT(A) is not sustainable. We also find that the learned CIT(A) has given finding that notice under section 143(2) of the Act has been issued by the learned Assessing Officer but there is no finding whether it has been served on assessee or not. Further, there is no finding that though purchases have been shown by the assessee in its books of account but whether thoe have been in included in the sales, which is not disputed by ld AO . Further there is no reference of any quantitative details maintained by the assessee. Therefore, in the interest of justice, we set aside this appeal back to the file of the learned CIT(A) with a direction to the
In the result, appeal filed by the assessee is allowed with above directions.
Order pronounced in the open court on 19.04.2022.