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Facts
The assessee declared a loss for AY 2021-22. The Assessing Officer (AO) found a discrepancy in purchase figures between the GSTR-1 and the Income Tax Return, adding the difference of Rs.8,04,92,126/- to the income. The appeal to the CIT(A) was dismissed due to a delay.
Held
The Tribunal noted that the AO relied on GSTR-1 data from the Insight Portal without the assessee's actual GSTR-1 filing. The Tribunal set aside the matter to the CIT(A) to allow the assessee an opportunity to explain the discrepancy, subject to a cost payment.
Key Issues
Whether the CIT(A) erred in not condoning the delay and dismissing the appeal without examining the merits of the addition made by the AO regarding inflated purchases.
Sections Cited
144, 144B, 69C
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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH, AHMEDABAD
Before: SHRI SANJAY GARG & SHRI NARENDRA PRASAD SINHA
PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against the order of the National Faceless Appeal Centre (NFAC), Delhi (in short “the CIT(A)”) dated 30.11.2023 for the Assessment Year (A.Y.) 2021-22 in the proceeding under Section 144 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’).
The brief facts of the case are that the assessee had filed its return of income for the A.Y. 2021-22 on 29.03.2022 declaring loss of Rs.19,72,514/-. The case was selected for scrutiny to examine the (Assessment Year: 2021-22) World Alloys Pvt. Ltd. vs. Assessment Unit, National Assessment Centre, Income Tax Deptt., Present Jurisdiction: DCIT, Circle – 1(1) Page 2 of 5 purchases which was from suppliers who were either non-filers or had filed non-business Income-tax returns. In the course of assessment proceeding, no compliance was made by the assessee. The Assessing Officer had found that the assessee had reported purchase of Rs.61,23,23,119/- in GSTR-1, whereas purchases reflected in the Income-tax return was Rs.69,28,15,245/-. Therefore, the purchases in the ITR was held as inflated and the difference of Rs.8,04,92,126/- in the two purchase figures was added to the income of the assessee. The assessment was completed under Section 144 r.w.s 144B of the Act on 13.12.2022 at total income of Rs.7,85,19,216/-.
Aggrieved with the order of the Assessing Officer, the assessee had filed an appeal before the First Appellate Authority which was decided by the Ld. CIT(A) vide the impugned order and the appeal of the assessee was dismissed.
Now the assessee is in second appeal before us. The following grounds have been taken in this appeal: -
“1. The Learned C.I.T.(Appeals) has erred in law and on facts of the case, in treating an appeal admissible by not condoning the delay in filing the appeal and thereby, erred in law and on facts in confirming addition made by the assessing officer Rs.8,04,92,126 being Inflated Purchased u/s.69C of the Income Tax Act, 1961. 2. The appellant craves leave to add, amend or alter the grounds of appeal at the time of hearing, if need arise.”
5. Shri Hardik Vora, Ld. AR of the assessee, submitted that the Ld. CIT(A) did not condone the delay of 232 days in filing of the appeal before him and treated the appeal as inadmissible. He submitted that the merit (Assessment Year: 2021-22) World Alloys Pvt. Ltd. vs. Assessment Unit, National Assessment Centre, Income Tax Deptt., Present Jurisdiction: DCIT, Circle – 1(1) Page 3 of 5 of the addition was not examined by the Ld. CIT(A). Regarding non- compliance before the Assessing Officer, the Ld. AR explained that the assessee was unaware about faceless regime through online process and no physical notices were received by him. Further, the notices received on e-mail were not attended by the counsel of the assessee. He further submitted that even the order of the Assessing Officer received through e-mail was not communicated by the counsel to the assessee in time, which has led to delay of 232 days in filing of the appeal before the Ld. CIT(A). On merits, the Ld. AR explained that there was no discrepancy in the purchase as reported in the Income-tax return and the purchase as shown in the GSTR-1 and that an opportunity may be provided to the assessee to explain the matter by setting aside the issue to the file of the Assessing Officer for re-examination. He submitted that the assessee had also filed an application under Rule 29 of the Income Tax (Appellate Tribunal) Rules for bringing additional evidences on record.
Per contra, Shri Alpesh Parmar, Ld. CIT-DR, supported the orders of the lower authorities. He, however, has no objection, if another opportunity was provided to the assessee to explain the matter.
We have considered the rival submissions. From the Form No.35, it is noticed that the assessee had received one of the notices issued by the Assessing Officer. Thus, the assessee was very much aware about the on-going assessment proceeding and, therefore, the assessee should have enquired about the same with his counsel and ensured that compliance was made before the Assessing Officer and also ensured that the appeal against the assessment order was filed within time. At the (Assessment Year: 2021-22) World Alloys Pvt. Ltd. vs. Assessment Unit, National Assessment Centre, Income Tax Deptt., Present Jurisdiction: DCIT, Circle – 1(1) Page 4 of 5 same time, it is found that the Assessing Officer had taken the figure of purchase reflected in GSTR-1 data from Insight Portal and the actual copy of GSTR-1 filed by the assessee was not brought on record. It is a known fact that there can be difference between the figures as shown in GSTR- 1 return and the GSTR data as reflected on Insight Portal. In the absence of the copy of GSTR-1 return filed by the assessee, the basis of addition of Rs.8,04,92,126/- in respect of differential purchase, cannot be authenticated. We, therefore, deem it proper to set aside the matter to the file of Ld. CIT(A) with direction to allow another opportunity to the assessee to explain the difference between the purchase shown in GSTR- 1 return and the purchase as reflected in the Income-tax return, subject to payment of cost of Rs.5,000/- by the assessee, which should be deposited to the Prime Minister’s National Relief Fund within a period of 15 days of receipt of this order. The assessee is also directed to file the additional evidences that is sought to be filed before us or any other evidence, before the Ld. CIT(A) in order to reconcile the difference in the figure of purchases as discussed in the assessment order. The Ld. CIT(A) will be free to call for a remand report from the Assessing Officer on the additional evidences filed by the assessee and, thereafter, decide the matter on merits on the basis of the materials available on record.
In the result, the appeal of the assessee is allowed for statistical purpose. Order pronounced in the open Court on this 7th October, 2025.