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Facts
The appeals were filed against an ex-parte order of the CIT(A) who dismissed the appeals without providing a reasonable opportunity of being heard. The Assessing Officer had made additions based on information about accommodation entries received from various sources.
Held
The Tribunal held that the CIT(A) failed to consider the assessee's evidence and passed an ex-parte order. The appeals are remanded to the CIT(A) for adjudication on merits after providing the assessee with a proper opportunity of hearing. A penalty of Rs. 5000/- per appeal is imposed.
Key Issues
Whether the CIT(A) erred in passing an ex-parte order without considering the assessee's evidence and providing a reasonable opportunity for being heard, leading to a denial of natural justice.
Sections Cited
147, 148, 143(3), 68, 115BBE, 145, 69C, 271AAC(1)
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Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH
Before: Dr. BRR Kumar & Ms. Suchitra Kamble
आदेश/ORDER Per Suchitra Kamble, Judicial Member:
These three appeals are filed against the order dated 16- 12-2024 passed by National Faceless Appeal Centre, Delhi for assessment years 2012-13, 2013-14 & 2018-19.
The grounds of appeals are as under:-
“1. The Learned Commoner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in passing an Ex Parte Order dismissing the appeal without providing reasonable opportunity of being heard to the appellant. Hence the same being against the principles of natural justice and equity requires to be quashed.
2. The Learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC) Delhi has erred in confirming the action of the Assessing Officer in issuing notice u/s. 148 of the Act which is illegal and bad in law and , 320 & 321/Ahd/2025 Balkrishna Textile (P) Ltd., A.Y. 2012-13, 2013-14 & 2018-19 hence the same should be quashed and the reassessment made on the basis of the same requires to be cancelled.
3. The Learned Commissioner of Income Tax (Appeals) National Faceless Appeal Centre (NFAC) Delhi has erred in confirming the order passed 143(3) r.w.s. 147 of the IT. Act 1961 which is illegal and bad in law hence the same requires to be cancelled.
4. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of Assessing Officer in undertaking reassessment proceedings under the Act only on the basis of information received from ADIT (Inv), Unit-5 Kolkata that the assessee Co. had received accommodation entries through bank account No. 518011065594 maintained by proprietary concern Shree Ambica Services, Prop Shri Om Prakash Bihani worked out by him at Rs. 1,00,62,863/- as per bank statement obtained.
5. The Learned Commissioner of Income Tax (Appeals). National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing Officer in undertaking reassessment proceedings under the Act only on the basis of information received from DDIT (Inv.), Unit-1(2) Ahmedabad that assessee Co had received accommodation entries of Rs.2,98,775 from Radhe Corporation a Proprietary concern run by Shri Harishbhai Mulchibhas Purohit, an entry operator.
6. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi has erred in confirming the action of the Assessing Officer in completing the reassessment without providing copy of the statements, materials documents etc relied upon by him hence the same being against the principles of natural justice and law requires to be cancelled.
7. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing Officer in refusing to grant an opportunity for cross examination of the persons making the statement on the basis of which the notice u/s. 148 has been issued and completing the reassessment making additions, in spite of specific request has been made by the Appellant Co. Hence the assessment so made being against the principles of natural justice and law is illegal and void ab initio.
8. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing Officer has erred in computing the total income at Rs.4,01,32,337 as against that of Rs. 2,80,21,190/- declared by the appellant in the return of income filed. He further erred in taking the total income at Rs.2,96,73,949 determined as per order dtd.08/11/2016 passed us 250 of the Act while computing the total income of the appellant without giving effect to the order did 05/09/2018 passed by the Hon'ble ITAT Ahmedabad in for A.Y. 2012-13. He further erred in taking figure of addition of Rs. 96,750 made as per order did. 30/11/2018 passed us. 147 r.ws. 143(3) of the IT Act 1961.
9. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi has erred in confirming the addition of Rs 1,30,62,863 made by the Assessing Officer as alleged unexplained cash credit us.68 of the I. T. Act, 1961 treating the amount received from Shree Ambica Services against sales made to them as alleged accommodation entries only on the basis of credit entries in their bank account No.518011065594 with ING Vaisya Bank treating the bank account as books of accounts.
, 320 & 321/Ahd/2025 Balkrishna Textile (P) Ltd., A.Y. 2012-13, 2013-14 & 2018-19
The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NPAC), Delhi has erred in confirming addition of Rs 2,98,775 made by the Assessing Officer as alleged unexplained cash credit u/s.68 of the IT Act, 1961 treating the amount received from Radhe Corporation Prop Harishbhai Mulchibhai Purohit for sales made to them as alleged accommodation entries only on the basis of credit entries in their bank account treating the same as books of accounts
The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming order passed by the Assessing Officer without taking taking cognizance of various evidences furnished in support of the sale transactions which has been treated as alleged unexplained cash credits.
12. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the various additions made by the Assessing Officer without taking note of the fact that the assessee has already declared profit on the sales made resulting in double taxation of the same income.
13. The Appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal.”
“1. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in passing an Ex Parte Order without rejecting the adjournment application filed on 02.12.2024 by the appellant is compliance to notice dt. 15.11.2004 and dismissing the appeal without providing reasonable opportunity of being heard to the appellant. Hence the same being against the principles of natural justice and equity requires to be quashed.
2. The Learned Commissioner of Income has (Appeals), National Faceless Appeal Com NFAC Delhi has erred in confirming the action of the Assessing Officer in issuing notice u/s. 148 of the Act, which is illegal and bad in law and hence the same should be quashed and the re-assessment made on the basis of the same requires to be cancelled.
The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi has erred in confirming the order passed 147 r.w.s. 144B of the I.T. Act which is illegal and bad in law hence the same requires to be cancelled.
The Learned Commissioner of Income Tax (Appeals) National Face Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing Officer in undertaking reassessment proceedings under the Act only on the basis of information received from DDIT (Inv.) Unit-1(2), Ahmedabad vide email did. 14.03.2020 that the search was conducted on 12.04.2019 in the case of Sanjay Govindram Agrawal also known as Sanjay Tibrewal and it was observed that he is accommodation entry operator and is in the business of providing accommodation entries and that the assessee Co had received accommodation entries of Rs.9,16,269/- from Radhe Corporation, Proprietary concern in the name of Harishbhai M. Purohit employee of Sanjay Tibrewal which is operated by him as per bank statement obtained.
5. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Come (NFAC) Delhi has erred in confirming the action of the Assessing , 320 & 321/Ahd/2025 Balkrishna Textile (P) Ltd., A.Y. 2012-13, 2013-14 & 2018-19 Officer in undertaking re-assessment proceedings under the Act only on the basis of information received from DDIT Unit-1(2), Ahmedabad that assessee Co had received accommodation entries of Rs.9,16,269 from Radhe Corporation a Proprietary ounces in the same of Shri Harishbhai M. Purohit, employee of Sanjay Tibrewal an entry operator.
6. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Come (NFAC) Delhi has erred in confirming the action of the Learned Assessing Officer in completing the reassessment without providing copy of the statements, materials, etc. relied upon by him hence the same being against the principles of natural justice and law requires to be cancelled.
The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the action of the Assessing Officer in refusing to grant an opportunity for cross examination of the persons making the statement on the basis of which the notice u/s. 148 has been issued and completing the reverent making additions, in spite of specific request has been made by the Appellant Co. Hence the assessment so made being against the principles of natural justice and law is illegal and void ab initio.
The Learned Commissioner of Income Tax (Appeal), National Faceless Appeal Centre (NFAC) Delhi has erred in confirming the action of the Assessing Officer in computing the total income at Rs.2,54,88,789/- as against that of Rs.2,45,49,520/-declared by the appellant in the return of income filed.
9. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi has erred in confirming the addition of Rs.9,16,269 made by the Assessing Officer as alleged unexplained cash credit u/s.68 of the IT Act 1961 treating the amount received for the sales made to parties namely, Ami Fabrics, Anita Textiles and Mishwas Textiles as alleged accommodation entries as the said parties had remitted the amount of sale consideration to the appellant by using services of Radhe Corporation and erred in taxing the same applying the provisions of Sec. 115BBE of the Act
10. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi has erred in confirming the action of the Assessing Officer to treating the sales as alleged unexplained cash credits u/s. 68 of the Act without rejecting the books of accounts u/s.145 of the Act.
11. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi has erred in confirming the addition of Rs. 23,000/- made by the Assessing officer estimating the commission paid for the alleged accommodation entries at the rate of 25 percent u/s. 69C of the IT. Act. 1961 and taxing the same applying the provisions of Sec. 115BBE of the Act.
The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi has erred in confirming additions made by the Assessing Officer without taking cognizance of various evidences furnished in support of the sale transactions which has been treated as alleged unexplained cash credits
The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC) Delhi has erred in confirming additions made by the Assessing Officer without taking note of the fact that the assessee has already declared profit on the sales made resulting in double taxation of the same income.
The Appellant craves leave to add, alter, amend or modify any of the grounds of appeal on or before the date of hearing of appeal.”
, 320 & 321/Ahd/2025 Balkrishna Textile (P) Ltd., A.Y. 2012-13, 2013-14 & 2018-19 “1. The Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in passing an Ex - Parte Order dismissing the appeal without providing reasonable opportunity of being heard to the appellant. Hence the same being against the principles of natural justice and equity requires to be quashed.
2. The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in passing an Ex-Parte order confirming the order passed by the Assessing Officer computing the total income at Rs.4,07,41,110/- as against that of Rs.3,22,48,210/- declared by the appellant in the revised return of income filed on 06/10/2018.
3. The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming addition of Rs. 80,00,000/- made by the Assessing Officer, treating the unsecured loans as alleged unexplained credits u/s. 68 of the I.T. Act, 1961 and computing the tax liability applying the provisions of Sec. 115BBE of the I.T.Act,1961. He further erred in initiating penalty proceedings u/s. 271AAC(l) of the Act.
4. The learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi has erred in confirming the addition of Rs. 4,92,899/- made by the Assessing Officer for the alleged less disclosure of export incentives without verifying the discrepancy pointed out by the appellant vide letter dtd. 13/04/2021 in the data available with A.O. and that declared by the assessee company which as per the Appellant would be Rs.3,11,403/-.
5. The Appellant craves leave to add, alter, amend or appeal on or before the date of hearing of appeal.”
3. The assessee company is engaged in the business of textile, power looms and hand looms and has filed return of income for assessment year 2012-13 declaring total income of Rs. 2,80,12,190/-. The case was selected for scrutiny under CASS and the order u/s. 143(3) was passed on 02-03-2015 thereby assessing total income at Rs. 3,31,69,590/-. Thereafter order u/s. 250 of the Income Tax Act giving effect to the order of the CIT(A) passed on 08-11-2016 determining the total income at Rs. 2,96,73,949/-. Thereafter, assessment order u/s. 143(3) r.w.s. 147 of the Act was passed on 30-11-2018. Thereafter, the information was received from ACIT (Investigation), Unit-5 , 320 & 321/Ahd/2025 Balkrishna Textile (P) Ltd., A.Y. 2012-13, 2013-14 & 2018-19 Kolkata that the assessee company received accommodation entries through the bank maintained with proprietorship concerns Ambika Service Proprietor, Om Prakash Bihani. As per the bank statement obtained, the total amount of accommodation entries worked out Rs. 1,00,62,863/-. The information was also receded from DDIT (Inv) Unit-1(2), Ahmedabad that the assessee company received accommodation entry of Rs. 2,98,775/- through Radhe Corporation proprietorship concern run by Harishbhai Mulchibhai Prohit. After taking cognizance of the assessee’s reply, the Assessing Officer made addition of Rs. 96,750/- as per order u/s. 147 r.w.s. 143(3) of the Act dated 30-11-2018, addition u/s. 68 of the Act amounting to Rs. 1,62,863/- received from Ambika Services and treated the same as unexplained cash credit. The Assessing Officer also made addition of Rs. 2,98,775/- received from Radhe Corporation as unexplained cash credit u/s. 68 of the Act.
4. Being aggrieved by the assessment order, the assessee filed appeal before the CIT(A). The CIT(A) dismissed the appeal of the assessee.
The ld. A.R. submitted that the CIT(A) has not at all taken cognizance of the evidences filed by the assessee before the Assessing Officer and hence passed ex-parte order without deciding the case on merit. The ld. A.R. submitted that the matter may be remanded back to the file of the CIT(A) for proper adjudication of the issues on merit.
The ld. D.R. submitted that ample opportunity has been granted and the assessee has not responded any notices except notice dated 05-04-2024 and sought adjournment. The CIT(A)
, 320 & 321/Ahd/2025 Balkrishna Textile (P) Ltd., A.Y. 2012-13, 2013-14 & 2018-19 has given adjournment but the assessee on the last late of hearing has not submitted any responses or submissions and hence CIT(A) has rightly dismissed the appeal of the assessee.
7. We have heard both the parties and perused all the relevant materials available on record. It is pertinent to note that the CIT(A) has issued the notices to the assessee but the CIT(A) has not taken cognizance of the assessee’s evidences filed before the Assessing Officer and has not decided the matter on merit on the basis of documentary evidences and hence the matter is remanded to the file of the CIT(A) for proper adjudication of the issues on merit. The assessee be given proper opportunity of hearing by following the principles of natural justice. The assessee is directed to pay Rs. 5000/- to the Income Tax Department within the period of 15 days from the receipt of this order. The appeal of the assessee in A.Y. 2012-13 is partly allowed for statistical purposes. for A.Y. 2013-14 and for A.Y. 2018-19, the same are also decided by the CIT(A) ex-parte without adjudicating the issues decided therein on merit. Therefore, the same directions are given in these appeals to the CIT(A) for adjudicating the appeal of the assessee on merit. The assessee be given proper opportunity of hearing by following the principles of natural justice. Further, we direct the assessee to pay Rs. 5000/- in each of the appeal to the Income Tax Department within the period of 15 days from the receipt of this order. Thus, ITA Nos. 320/Ahd2025 for A.Y. 2013-14 and ITA No. 321/Ahd/2025 for A.Y. 2018-19 is partly allowed for statistical purposes.
, 320 & 321/Ahd/2025 Balkrishna Textile (P) Ltd., A.Y. 2012-13, 2013-14 & 2018-19
In the result, all the three appeals are partly allowed for statistical purposes.
Order pronounced in the open court on 07-05-2025 Sd/- Sd/- (Dr. BRR Kumar) (Suchitra Kamble) Vice President Judicial Member Ahmedabad : Dated 07/05/2025 आदेश क� ��त�ल�प अ�े�षत / Copy of Order Forwarded to:- 1. Assessee 2. Revenue 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order/आदेश से,
उप/सहायक पंजीकार आयकर अपील�य अ�धकरण, अहमदाबाद