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Facts
The assessee, Kamakshi Diamonds Pvt. Ltd., filed its return for AY 2016-17 declaring a total income of Rs. 61,980/-. The AO received information that M/s Delight Diam P. Ltd. was not engaged in diamond trading but in providing accommodation entries, and the assessee had a transaction of Rs. 15,00,000/- with this entity. The AO added Rs. 15,00,000/- u/s 69C of the Act for bogus purchases.
Held
The CIT(A) dismissed the assessee's appeal due to non-compliance with hearing notices and failure to file a return in response to a notice u/s 148. The assessee argued that the non-compliance was due to unavoidable circumstances (illness) and that an adequate opportunity was not granted. The Tribunal, considering the ex-parte order by CIT(A) and the assessee's plea, decided to grant one more opportunity.
Key Issues
Whether the CIT(A) erred by dismissing the appeal ex-parte without granting adequate opportunity to the assessee, and whether the reassessment proceedings initiated were justifiable.
Sections Cited
147, 144, 144B, 148, 151, 69, 69C, 250
AI-generated summary — verify with the full judgment below
Before: SHRI PAWAN SINGH & SHRI BIJAYANANDA PRUSETH
आदेश / O R D E R
PER BIJAYANANDA PRUSETH, AM:
This appeal by the assessee emanates from the order passed under section 250 of the Income-tax Act, 1961 (in short, ‘the Act’) dated 08.08.2024 by the CIT(Appeals)/National Faceless Appeal Centre, Delhi [in short ‘the CIT(A)’] for the assessment year (AY) 2016-17, which in turn arises out of assessment order passed by Assessing Officer (in short ‘AO’) u/s 147 r.w.s. 144 r.w.s. 144B of the Act dated 30.05.2023. Grounds of appeal
raised by the assessee are as under:
1. Whether on the facts and circumstances of the case, the notice issued by the learned Assessing Office under section 148 of the Act and the /AY.16-17 Kamakshi Diamonds Pvt Ltd. consequential reassessment proceedings under section 147 of the Act are justifiable in law when the notice under section 148 of the Act has been issued after obtaining approval from the Competent Authority under section 151(i) and not section 151(ii) when 3 years from the end of the relevant assessment year had already elapsed.
2. Whether on the facts and circumstances of the case, the learned Commissioner of Income Tax (Appeals) was justified in upholding the addition made by the learned Assessing Officer to the notice of the appellant to the tune of Rs.15,00,000 under section 69 of the Income tax Act, 1961.
3. Appellant craves leave to add, alter modify or delete any ground(s) either before or during the course of appellate hearing.”
Facts of the case in brief are that assessee filed its return of income declaring total income of Rs.61,980/- for the assessment year 2016-17 on 16.10.2016. The AO received information from DDIT(Inv)-2, Surat that a company by the name M/s Delight Diam P. Ltd. was not engaged in any diamond trading. During the course of inquiry proceedings, the Director of the M/s Delight Diam P. Ltd., Shri Deepak Babel stated that the company was engaged only in providing accommodation entries and there was no actual business activities carried out by the company. The assessee-company had transaction of Rs.15,00,000/- with the above entity. In view of the above, the AO provided various opportunities to assessee which is tabulated at para-2 of the assessment order. It is clear therefrom that AO issued various statutory and show cause notices and after considering the submission of the assessee, he added Rs.15,00,000/- u/s 69C of the Act towards the bogus purchase from /AY.16-17 Kamakshi Diamonds Pvt Ltd. M/s Delight Diam Pvt. Ltd. in the order passed u/s 147 r.w.s. 144 r.w.s. 144B of the Act dated 30.05.2023. Aggrieved by the addition made by AO, assessee preferred appeal before CIT(A).
The CIT(A) issued three notices to the appellant but it failed to respond to the notices of hearing. The CIT(A) has observed that assessee even failed filed any return of income in response to notice u/s 148 of the Act. Apart from giving confirmation from M/s Delight Diam Pvt. Ltd. to the AO, the assessee did not provide any evidence to dispute the investigation by the DDIT (Inv). The appellant did not respond to the notices dated 14.06.2024, 28.06.2024 and 15.07.2024 issued by CIT(A). Therefore, CIT(A) presumed that appellant had no other submission than the one submitted before AO. He confirmed the addition made by the AO and dismissed the appeal. Aggrieved by the order of CIT(A), the assessee has filed present appeal before the Tribunal.
Before us, Ld.AR of the assessee submitted that adequate opportunity of hearing was not granted by the CIT(A). He has filed an affidavit of Shri Kuldeep Shripal Jain, Director of assessee-company, who stated that only one hearing notice was issued by CIT(A) before passing the ex parte order. He stated that he was severely ill during May and June, 2024 and doctor advised complete rest during the said period. Because of above reason, appellant could not file submission before CIT(A) but it had filed complete submissions before AO. In view of the above, Ld. AR of the assessee requested that one more opportunity may be given to the appellant to argue its case on merit before
On the other hand, Ld.Sr-DR for the Revenue supported the orders of lower authorities. He has, however, no objection if the matter is restored back to the file of CIT(A) for fresh adjudication.
We have heard both the parties and perused the materials available on record. We find that CIT(A) has passed ex parte order. Evidently, the assessee did not comply with the notices issued by CIT(A). Hence, the addition made by AO was confirmed by CIT(A). Ld. AR of assessee submitted that non- compliance by assessee was not deliberate but due to unavoidable circumstances. We find that the CIT(A) has dismissed the appeal of assessee on the ground of non-compliance. Considering the facts and circumstances of the case and the fact that the assessment order was confirmed by CIT(A) by an ex parte order, we are of the considered view that the assessee deserves one more opportunity to contest its case on merit. In the interest of justice, we set aside the order of CIT(A) and remit the matter back to the file of CIT(A) with a direction to adjudicate the appeal fresh in accordance with law after granting adequate opportunity of hearing to assessee. The assessee is directed to be vigilant and to furnish all details and explanation as needed by CIT(A) and not /AY.16-17 Kamakshi Diamonds Pvt Ltd. seek adjournment without valid reason. With this direction, the grounds of appeal raised by the assessee are treated as allowed for statistical purposes.