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Facts
The assessee, Centurion Laboratories Pvt. Ltd., reported nil income for AY 2019-20. Reassessment proceedings were initiated on the basis of alleged bogus purchases of Rs. 4,09,76,267/- from M/s. Gensis Health Care, leading the AO to add Rs. 56,75,210/- (13.85% GP) to income. The assessee contended that after excluding IGST, the actual purchase value was Rs. 3,47,25,650/-, making the GP addition only Rs. 48,09,503/-, which falls below the jurisdictional threshold for reassessment. The CIT(A) dismissed the appeal.
Held
The Tribunal found that the actual income escaping assessment, after correctly accounting for IGST, was Rs. 48,09,503/-, which is less than the Rs. 50,00,000/- monetary threshold specified in section 149(1)(b) for reassessment. Consequently, the reassessment proceedings were held invalid. Furthermore, the Tribunal noted that the AO failed to conduct independent inquiries and the addition led to double taxation without rejecting the assessee's books of account under section 145(3).
Key Issues
The key issues were the validity of reassessment proceedings when the alleged escaped income fell below the statutory monetary threshold, and the justification for making an addition for bogus purchases without independent verification or rejection of the assessee's books of account.
Sections Cited
147, 144B, 148, 148A, 149(1)(b), 143(2), 251, 145(3), 151, 151A, 282, 127 (Income Tax Rules), 131(1A)
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Income Tax Appellate Tribunal, AHMEDABAD “B” BENCH
Before: Shri T.R. Senthil Kumar & Shri Narendra Prasad Sinha
ORDER PER: T.R. SENTHIL KUMAR, JUDICIAL MEMBER This appeal is filed by the Assessee as against appellate order dated 10-06-2025 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the reassessment order passed under section 147 r.w.s. 144B of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) relating to the Assessment Year 2019-20.
A.Y. 2019-20 2 Centurion Laboratories Pvt. Ltd. Vs. ACIT
The registry has noted that there is a delay of 88 days in filing the above appeal. The assessee explained way of Notarized Affidavit that email communication address of Shri Ambalal Patel was mentioned in Form No. 35. However, he resigned from the appellant company with effect from 01-04-2025 due to his old age (72 years) and his resignation was intimated to