M/S ABHISHEK EXPORTS,MUMBAI vs. ITO 19 (1)(1), MUMBAI

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ITA 7824/MUM/2019Status: DisposedITAT Mumbai10 August 2021AY 2007-083 pages
AI SummaryRemanded

What did the Tribunal hold?

The Tribunal found that it was not clear if the notices issued by the CIT(A) were duly served on the assessee. An ex-parte order without proper service of notice violates the principles of natural justice.

What were the facts?

The assessee, engaged in diamond trading, had its assessment reopened due to alleged accommodation entries. The Assessing Officer made additions for bogus purchases as the assessee failed to provide supporting documents. The CIT(A) dismissed the assessee's appeal ex-parte.

What were the issues?

Whether the ex-parte order passed by the CIT(A) was valid without proper service of notice and affording an opportunity of hearing to the assessee.

Which sections of the Income-tax Act were involved?

Section 143(3),Section 147

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, MUMBAI BENCH “SMC”, MUMBAI

Hearing: 03/06/2021Pronounced: 10/08/2021

ORDER PER VIKAS AWASTHY, J.M: This appeal by the assessee is directed against an ex-parte order of the Commissioner of Income Tax (Appeals)-30, Mumbai [hereinafter referred to as ‘the CIT(A)’] dated 26.09.2019 for the Assessment Years (AY) 2007-08.

2.

The brief facts of the case as emanating from the records are: The assessee is engaged in trading/export of Diamonds. The assessment for AY 2007-08 in the case of assessee was re-opened on the ground that the assessee has obtained accommodation entries amounting to Rs. 29,99,973/- from Daksh Diamonds, a concern belonging to Bhanwarlal Jain group. During assessment आअसं. 7824/मुं/2019 (िन.व.2007-08) (AY-2007-08) proceedings, the assessee failed to furnish documents to discharge its onus in proving genuineness of the dealer and the purchases made from the said dealer. Consequently, the AO made addition of the entire alleged bogus purchases. The assessee filed appeal against the assessment order dated 27.03.2015 passed under section 143(3) read with section 147 of the Act, challenging validity of re-opening of assessment and the addition on merits. The CIT(A) in an ex-parte proceedings dismissed the appeal of assessee in toto.

3.

Now, the assessee is in appeal before the Tribunal assailing the impugned order on three counts: (1) Ex-parte order passed without affording opportunity of hearing, (2) Re-opening of assessment under section 147 of the Act, and (3) Addition confirmed on account of bogus purchases.

4.

A perusal of the impugned order reveals that the CIT(A) has issued notices to the assessee on 19.01.2017, 15.02.2017, 02.07.2017 and 13.09.2017. However, it is not emanating from the order whether these notices were duly served on the assessee or not. Mere issue of notices is not sufficient to comply with the procedure, it is also to be ascertained that the notices are duly served on the assessee. Adverse order passed at the back of assessee is against the principle of natural justice. It is a well-settled Rule that a fair opportunity of hearing should be afforded to the parties to the lis.

5.

Taking into consideration entirety of facts, the impugned order is set- aside and the appeal of assessee is restored back to the file of CIT(A) for deciding the same afresh on merits after affording reasonable opportunity of hearing to the assessee/appellant.

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