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Facts
The assessee's income tax return was not filed for AY 2018-19. The Assessing Officer reopened the case based on information about bogus sale/purchase transactions with Bharat Trading Co. amounting to Rs. 3,01,65,800/-, making an addition under section 69C, which was subsequently confirmed by the CIT(A) due to the assessee's non-compliance. The assessee appealed to the ITAT, contending the actual purchases were Rs. 58,25,674/- and sought an opportunity to present its case before the AO.
Held
The Tribunal condoned the delay of 80 days in filing the appeal. After considering the submissions, the ITAT set aside the CIT(A)'s order and remanded the matter back to the Assessing Officer for fresh adjudication. The assessee is to be given a proper opportunity of hearing and directed to be vigilant in responding to the AO's notices.
Key Issues
Whether the addition for bogus purchases/unexplained expenditure under section 69C was justified, and whether the assessee should be granted an opportunity to present its case before the AO.
Sections Cited
Section 250 of Income Tax Act, 1961, Section 148 of Income Tax Act, 1961, Section 147 of Income Tax Act, 1961, Section 144 of Income Tax Act, 1961, Section 144B of Income Tax Act, 1961, Section 69C of Income Tax Act, 1961, Rule 34 of ITAT Rules, 1963
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “A” BENCH, AHMEDABAD
Before: Shri Sanjay Garg & Shri Makarand V. Mahadeokar
Year : 2018-19 Vikramkumar Bhavarlal Dave The ITO बनाम/ C-168, Shivam Duplex Ward-1(2)(2) v/s. Opp. Ambe School Vadodara – 390 007 Manjalpur Vadodara – 390 011 "थायी लेखा सं./PAN: BRQPD 7728 G (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee by : Shri Prashant Upadhyay, CA Revenue by : Shri Alpesh Parmar, CIT-DR सुनवाई की तारीख/Date of Hearing : 19/11/2025 घोषणा की तारीख /Date of Pronouncement: 17/02/2026 आदेश/O R D E R
Per Sanjay Garg, Judicial Member:
The present appeal has been preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as ‘CIT(A)’] dated 07/11/2024 passed u/s.250 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) for the Assessment Year (AY) 2018-19.
The assessee, in this appeal, is aggrieved by the action of the Ld. CIT(A) in confirming the addition made by the Assessing Officer (AO) of Rs.3,01,65,800/- on account of bogus/unexplained expenditure. Vikramkumar Bhavarlal Dave vs. ITO Asst.Year : 2018-19
The appeal of the assessee is time-barred by 80 days. A separate application for condonation has been filed in the shape of an affidavit of an assessee, wherein, he has deposed that the assessee had not received any notice u/s.148 of the Act. That the notices, if any, were served by the Inspector of the Department at the address of his authorized representative (AR) while he was out of station. Even on his return, the said AR did not inform the assessee of any such notices resulting into an ex-parte assessment order making an addition of Rs. 3,01,65,800/-. Further, the said AR of the assessee also did not represent the case of the assessee before the Ld. CIT(A) nor guided the assessee as to what necessary documents the assessee was required to furnish before the Ld. CIT(A). That the assessee came to know of the order of the Ld. CIT(A) only when the tax-recovery proceedings were initiated. Considering the aforesaid averments made in the affidavit of the assessee, the delay of 80 days in filing the present appeal is hereby condoned.
The brief facts of the case are that the assessee had not filed his return of income (ITR) during the year under consideration. The case was reopened by the AO based on the information available on record that the assessee has entered into bogus sale/purchase transactions with one Shri Bharat B Purohit, who was engaged in providing accommodation entries to various parties. The AO noted that the assessee had made transaction of Rs. 2,94,15,000/- with the said Shri Bharat B Purohit, Prop- Bharat Trading Co., which were not genuine. As the case was reopened, various statutory notices were issued to the assessee by the AO during assessment proceedings, however, the assessee did not file any reply to the same. Further, during the assessment proceedings the assessee , however, stated that during the year under consideration the assessee had purchased goods of Rs. 3,01,65,800/- Vikramkumar Bhavarlal Dave vs. ITO Asst.Year : 2018-19 from Bharat Trading Co. The AO, however, held that the said purchases made by the assessee from Bharat Trading Co. were not genuine. The AO, accordingly, passed the assessment order u/s 147 r.w.s 144 read with section 144B of the Act on 23.03.2023 assessing the income of the assessee at Rs. 3,08,62,970/- making the addition relating to bogus purchases as unexplained expenditure u/s 69C of the I.T.Act, 1961 of Rs. 3,01,65,800/-.
During the first appellate proceedings before the Ld. CIT(A), the assessee remained non- compliant to all the notices issued and not furnished and supporting documentary evidence/explanation regarding the transactions it had made with Bharat Trading Co. The Ld. CIT(A), accordingly, confirmed the addition so made by the AO, dismissing the appeal of the assessee.
Before us, the Ld. Counsel for the assessee has submitted that the assessee during the year had made the purchases of Rs.58,25,674/- from Bharat Trading Co. and not of Rs.3,01,65,800/- as noted by the lower authorities. He has further submitted that the opening payable to the said concern was Rs.1.92 crores and the amount payable for the purchases made during the year was Rs.58,25,674/- out of which the payment of Rs. 3,01,65,800/- was made during the year and the closing balance payable was Rs.50 lakhs (approx.). The Ld. AR, in this respect, has submitted that the addition of Rs. 3,01,65,800/- was not justified. He has also submitted that all the purchases made by the assessee from Bharat Trading Co. were genuine. He, in this respect, has relied upon the copies of the bills/invoices and the ledger accounts. The Ld. AR has submitted that in the interests of justice, the assessee may be given an opportunity to present his case before the AO. Vikramkumar Bhavarlal Dave vs. ITO Asst.Year : 2018-19
After considering the rival submissions, in our view, the interests of justice will be well-served if the assessee be given an opportunity to represent his case, we set aside the order of the Ld. CIT(A) and restore the matter to the file of AO for passing the assessment order afresh, after giving an opportunity of hearing to the assessee to present his case. It is also directed that the assessee will remain vigilant and promptly respond to the notices of hearing issued by the AO.