HANUMANT INGOTS PVT. LTD., RAIPUR,RAIPUR vs. ASSISTANT COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE-2, RAIPUR, RAIPUR

आदेश / O R D E R Per Arun Khodpia, AM:

& 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur 2. The aforesaid two appeals pertain to a single assessee, having similar facts and circumstances, thus, are assailed on identical grounds of appeal, involved therein identical and interconnected issues, therefore, are heard together and taken up for adjudication under this common order.

3. To adjudicate the common issues involved in the aforesaid appeals, AY 2013-14 has been picked up as the lead case, wherein our observation and decision shall apply mutatis mutandis to the second appeal in for AY 2014-15.

4. The grounds of appeal

raised by the assessee in 1. That, on the facts and in the circumstance of the case and in law, the order passed by Ld. ACIT, Central Circle-2, Raipur dt. 30/03/2022 is bad in law and illegal and as such liable to be quashed. 1.1. That, reason supplied by the department is incomplete as there is a reference of "Information received from the ADIT(Inv.)-4(1). Kolkata" in the impugned reason itself, but those information was not supplied to the assessee. In the absence of supply of complete reasons together with the reference materials, the proceedings is invalid and consequential order dt. 30/03/2022 is not sustainable in law. 1.2. That, copy of approval from Ld. PCIT (Central), Bhopal (whose approval was obtained as per notice u/s 148 dt. 31/03/2021) was not supplied to the assessee, and therefore the proceedings is invalid and consequential order dt. 30/03/2022 is not sustainable in law.

2. That, without prejudice to above, Ld. CIT(A) erred in confirming the following additions made by Ld. ACIT, and the impugned additions are liable to be deleted:

& 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur 2.1. That, addition of Rs. 1,21,66,524.00 u/s 68 is not called for and it is liable to be deleted. 2.2. That, addition of Rs. 59,44,691.00 is not called for and it is liable to be deleted. 3. That, the appellant reserves the right to add, alter or delete any ground.

4.1 Briefly stated, the assessee is a company resident in India, had filed its Return of Income for the AY 2013-14 on 30.03.2022, declaring total income at Rs.3,40,110/-. A Search & Seizure action u/s 132 was conducted in the case of Sarthak Group, Raipur dated 26.11.2019, whereas the case of assessee was covered under survey u/s 133A of the Act, dated 19.01.2019. In the investigation made by ADIT (Inv.-4)-1, Kolkata in the case of M/s Surakshit Real Estate Ltd. (PAN: AANCS3044G), it is found that the assessee company received Rs. 1,21,66,524/- from the said company. The investigation wing has analyzed bank account of M/s Surakshit Real Estate Ltd. and found that (i) The company is a shell entity having no real business activity and, therefore, its creditworthiness is suspicious, (ii) the company has no fixed assets, showing negligible profits and taxes. M/s Surakshit Real Estate Ltd., Kolkata is a bogus concern engaged in providing bogus bills / accommodation entries to various entities. The assessee herein is one of the beneficiaries of bogus transactions carried out by M/s Surakshit Real Estate Ltd. and have received an amount of Rs. 1,21,66,524/- during FY 2012-13, relevant to AY 2013-14. Ld. AO issued notice u/s 142(1) of the Act, along with detailed questionnaire to the assessee & 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur to furnish the details pertaining to the aforesaid transactions, however, primarily no information could be furnished by the assessee. The last request vide issuance of show cause dated 23.02.2022 was made to the assessee to furnish the documents so as to complete the assessment. The assessee again had not made any compliance to the statutory notices issued by the Ld. AO and have not cooperated in the assessment proceedings. Accordingly, Ld. AO decided to complete the assessment in the manner providing under the provisions of Section 144 of the Act. Ld. AO, thereafter, had made certain observations regarding the bogus transactions carried out by the assessee and have made an addition of Rs. 1,21,66,524/- and Rs. 59,44,691/- with the following observations:

3.3 In absence of any submission, it is inferred that the assessee knows the f and willingly not participated in the assessment proceedings and has nothing to in the matter. Also, it is concluded that the assessee has no explanation regard this cash credit in the books of the assessee for the year under consideration. Therefore, the amounts are required to be added u/s 68 of the Act. As per provi contained in section 68 of the Act: Cash credits.- Where any sum is found credited in the books of an assessee maintained for any previous year, and the assessee offers no explanation about the nature and source thereof or the explanation offered by him is not, in the opinion of the Assessing Officer, satisfactory, the sum so credited may be charged to income-tax as the income of the assessee of that previous year :

& 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur [Provided that where the sum so credited consists of loan or borrowing or any such amount, by whatever name called, any explanation offered by such assessee shall be deemed to be not satisfactory, unless, — (a) the person in whose name such credit is recorded in the books of such assessee also offers an explanation about the nature and source of such sum so credited; and (b) such explanation in the opinion of the Assessing Officer aforesaid has been found to be satisfactory: Provided further that nothing contained in the first proviso or second proviso shall apply if the person, in whose name the sum referred to therein is recorded, is a venture capital fund or a venture capital company as referred to in clause (23FB) of section 10.

4.3 Aggrieved with the aforesaid assessment and addition made by the Ld. AO, the assessee preferred an appeal before the Ld. CIT(A), however, the assessee remains non-compliant during the appellate proceedings, therefore, the appeal of assessee has been dismissed.

4.4 Dissatisfied with the order of Ld. CIT(A), the assessee preferred an appeal before us, which is under consideration in the present case.

4.5 At the outset, on perusal of the impugned order of Ld. CIT(A), it is noticed that during the appellate proceedings when the assessee is called for hearing on 17.03.2025, 21.03.2025 and the last opportunity dated 24.03.2025. The assessee chooses not to attend nor any request for adjournment have been furnished before the Ld. CIT(A), therefore, following the guidelines issued by the CBDT for huge pendency of old appeals, the appeal of assessee has been decided by the Ld. CIT(A) based on the material available on record. Regarding assessee’s conduct qua no representation during the appellate proceedings Ld. CIT(A)’s observation are culled out hereunder for the sake of clarity and completeness of facts:

& 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur Being aggrieved with the assessment order, the appellant has preferred appeal which is under consideration. During the course of appeal proceedings, several notices u/s 250 were issued but the assessee neither file any evidence in support of issues raised in appeal nor file any adjournment request. Last notice u/s 250 was issued on 21.03.2025 and hearing was fixed on 24.03.2025 but the assessee did not submit any further reply in support of appeal. Therefore, it is held that the assessee has no interest in this appeal. Following notices are issued and but the assessee did not file any submission in support of grounds raised in the appeal. The details of such notices issued to the assessee as reproduced here in below: Sr. Notice issued under Date of notice Hearing Date Remarks No. section 1. 250 of I. T. Act, 1961 12.03.2025 17.03.2025 No reply was received. 2. 250 of I. T. Act, 1961 18.03.2025 21.03.2025 No reply was received. 3. 250 of I. T. Act, 1961 21.03.2025 24.03.2025 No reply was received.

4.6 With the aforesaid observation, the appeal of assessee has been dismissed.

4.7 The aforesaid appeal of assessee has been fixed for the hearing before us on 20.06.2025, wherein no one was present to argue the matter but an application seeking adjournment was furnished therefore, the matter was adjourned and refixed on 23.06.2025, however, on the next date of hearing also, i.e., 23.06.2025, there is no representation on behalf of the assessee & 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur neither any adjournment application have been furnished before us, therefore, the matter is taken up for adjudication.

4.8 Considering the fact that assessee was non responsive before the First Appellate Authority and the appeal of assessee has been decided on ex-parte basis. The matter herein is squarely covered with the decision of this tribunal in the case of Brajesh Singh Bhadoria Vs. Dy./ Asstt. Commissioner of Income Tax, Central Circle-2, in IT(SS) No. 1 to 6,8 & 9/RPR/2025 dated 20.03.2025, accordingly, following the principle of natural justice, we find it appropriate to restore this mater back to the file of Ld. CIT(A) for one last and final opportunity to the assessee to represent its case, so that a logical decision can be arrived at in terms of provisions of Section 250(4) & (6) of the Act. The relevant observation in the case of Brajesh Singh Bhadoria (supra), are extracted hereunder for ready reference and interpretation:

9. Recently, the Hon’ble High Court of Bombay in the case of Vijay Shrinivasrao Kulkarni Vs. Income-tax Appellate Tribunal (2025) 171 taxmann.com 696 (Bom.), dated 04.02.2025 observed that in the case the & 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur Assessing Officer had passed an ex-parte order and when the matter went on appeal before the Ld. CIT(Appeals)/NFAC, it had also dismissed the matter ex- parte due to non-compliance by the assessee’s authorized representative, when the matter came up before the ITAT, it had failed to address the infirmity regarding the fact that the assessee was not afforded proper opportunity of being heard and the matter was dismissed ex-parte by the Ld. CIT(Appeals)/NFAC which amounted to violation of principles of natural justice, and instead ITAT decided the case on merits, in such circumstances, the Hon’ble High Court of Bombay held that passing of an order on merits by the ITAT even when the impugned order was passed ex-parte amounts to violation of principles of natural justice and accordingly, the said matter was remanded to ITAT for passing a fresh order in accordance with law after hearing the parties. The legal principle as enshrined in the present judgment is crystal clear that the principles of natural justice i.e. the right to be heard is to be provided and accordingly, the matter had to be substantially adjudicated by the appellate authority. Therefore, if the impugned order of the Ld. CIT(Appeals)/NFAC is an ex-parte order, the only recourse in conformity with the aforesaid judicial pronouncement is to remand the matter back to the file of the Ld. CIT(Appeals)/NFAC for fresh adjudication in terms with the principles of natural justice providing one final opportunity to the assessee.

10. In the aforesaid case, the Hon’ble High Court of Bombay had referred to a judgment of the Hon’ble Supreme Court in the case of Delhi Transport Corporation vs. DTC Mazdoor Union AIR 1999 SC 564, wherein the Supreme Court inter-alia held that Article 14 guarantees a right of hearing to a person who is adversely affected by an administrative order. The principle of audi- alteram partem is a part of Article 14 of the Constitution of India. In light of such decision, the petitioner ought to have been granted an opportunity of being heard

11. The Hon’ble High Court of Bombay in the aforesaid case had referred to a decision of the Hon’ble Supreme Court in the case of Commissioner of Income Tax Madras v. Chenniyappa Mudiliar 1969 1 SCC 591, wherein the Supreme Court in interpreting the section 33(4) of the Income Tax Act, 1922 has held that the appellate tribunal was bound to give a proper decision on question of fact as well as law, which can only be done if the appeal is disposed off on merits and not dismissed owing to the absence of the appellant. Reverting to the facts of the present case the grounds of appeal were simply filed before the Ld.CIT(Appeals) they were not substantiated or corroborated through submissions and filing of documentary evidences since the assessee had not complied before the Ld.CIT(Appeals) on the dates of hearing. Therefore, as per framework of the Act there must be adjudication on merits by the first appellate authority and one final opportunity be provided to the assessee to represent his matter on merits in the interest of natural justice.

12. There may even be a situation where the Ld. Counsel for the assessee may assail a legal ground before the Tribunal following the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (1998) 229 ITR 383 (SC) with a contention that irrespective of the order of the Ld. CIT(Appeals) being ex-parte, the Tribunal may decide the legal issue that has been raised by the Ld. Counsel. In our view, the decision of the Hon’ble Supreme Court in the case of National Thermal Power Company Ltd. Ltd. Vs. CIT (supra) provides that any legal issue which goes to the root of the matter and is established through legal principles, the assessee can take up and raise such legal issue at any appellate forum irrespective of whether the assessee had raised & 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur such legal issue at the sub-ordinate level or not, however, it always depends on facts and circumstances of each case whether the Tribunal would decide the legal ground or in a case where the question is of natural justice and ex-parte order by the Ld. CIT(Appeals) the Tribunal would remand it back to Ld. CIT(Appeals) providing final opportunity to a bonafide assessee. The Tribunal as the highest fact finding authority must be certain enough that the impugned order before it has been passed on merits and is a speaking order where the assessee has also complied during the process of litigation. In case, where the order of the Ld. CIT(Appeals) itself is ex-parte and some legal ground is raised and if the Tribunal decides such legal ground where in fact principles of natural justice is left unanswered due to the fact that the impugned order before the Tribunal is ex- parte and there was no compliance by the assessee in such scenario the Tribunal would also be usurping the power of the Ld. CIT(Appeals) which is also a statutory authority as per the Act. This is due to the reason that as per framework of the Act, Ld. CIT(Appeals) is the first appellate authority where an appeal by assessee it would be substantially decided through a speaking order by the Ld. CIT(Appeals). When this part is over and either party is aggrieved second appeal lies before the ITAT. Now if for every ex-parte order passed by the Ld. CIT(Appeals), of course due to non-compliance by the assessee, if the Tribunal adjudicates a legal ground, for instance validity of assessment or reassessment order and answers it in favour of the assessee then it would create an easy route for assessee getting redressal from Tribunal even without bothering to comply with hearing notices before the Ld. CIT(Appeals). This would dismantle the structure of the Act which is definitely not the intention of the legislature. Here in this situation, where the benefit of doubt is given to the assessee since he had not complied with the hearing notices before the Ld. CIT(Appeals) which resulted in passing of an ex-parte order by the Ld. CIT(Appeals), in such scenario, as per the scheme of the Act and following the principles of natural justice, the only & 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur course of action is to remand the matter back to the file of the Ld. CIT(Appeals) for adjudication on merits providing one final opportunity to the assessee.

4.9 Considering the ex-parte order by the Ld. CIT(A) and the controversy raised by the assessee, in our opinion the present case falls within the category covered by our view and decision in the case of Brajesh Singh Bhadoria (supra), therefore, in absence of any contradicting information or submission, we find it appropriate to restore this matter back to the files of Ld. CIT(A) for fresh adjudication.

4.10 Before parting with, we may herein observe that as the matter in present case pertains to bogus / sham transactions entered into by the assessee with M/s Surakshit Real Estate Ltd., Kolkata, and there was complete failure on the part of assessee to furnish the explanation regarding genuineness of the transactions with any corroborative evidence, so as to dislodge the findings of the Ld. AO, therefore, it would be a responsibility of & 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur the revenue authorities to investigate in detailed manner as per law, to conclude that whether the subject transactions carried out by the assessee falls within the category of tax planning or tax evasion and in case it is emerged and concluded that the subject transactions are sham / bogus transactions for tax evasion to defraud the revenue, the additions made by the Ld. AO can be sustained in the hands of assessee. Our aforesaid view is supported by the observations of this tribunal in the case of Subedar Pathak vs. ACIT, Central Circle-1, Raipur, in Dated 09.06.2025, wherein the relevant observations of the tribunal are extracted here under for the sake of adherence by the First Appellate Authority:

"20. In S. P. Chengalvaraya Naidu (dead) by L.Rs. v. Jagannath (dead) by L.Rs. and others AIR 1994 SC 853 this court commenced the verdict with the following words:-

"Fraud-avoids all judicial acts, ecclesiastical or temporal"

It had been held that the courts of law are meant for imparting justice between the parties and one who comes to the court, must come with clean hands. A person whose case is based on falsehood has no right to approach the Court.

4.11 In terms of aforesaid observations, the order of Ld. CIT(A) is set aside and the matter is restored back to his file for denovo adjudication, with adequate & 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur opportunity of being heard to the assessee to prove the genuineness of the disputed bogus purchases pointed out by the Ld. AO, failing which the First Appellate Authority shall be at liberty to pass an appropriate order in terms of our aforesaid observation, following the mandate of law, within 3 months of receipt of this order.

4.12 Needless to say, the assessee shall be afforded with reasonable opportunity of being heard, in the set aside appellate proceedings. The assessee is also directed to cooperate and assist proactively in the set aside proceedings, failing which the Ld. CIT (A) would be at liberty to decide the appeal in accordance with the mandate of law.

ITA No. 347/RPR/2025 (for AY 2014-15)

raised by the assessee in are as under:

1. That, on the facts and in the circumstance of the case and in law, the order passed by Ld. ACIT, Central Circle-2, Raipur dt. 30/03/2022 is bad in law and illegal and as such liable to be quashed.

1.1. That, reasons supplied by the department is incomplete as there is a reference of "Information was provided by the DDIT(Inv.)-4(1), Kolkata" in the impugned reason itself, but those information was not supplied to the & 347/RPR/2025 Hanumant Ingots Pvt. Ltd. vs. ACIT, Central Circle-2, Raipur assessee. In the absence of supply of complete reasons together with the reference materials, the proceedings is invalid and consequential order dt. 30/03/2022 is not sustainable in law. 1.2. That, copy of approval from Ld. PCIT (Central), Bhopal (whose approval was obtained as per notice u/s 148 dt. 31/03/2021) was not supplied to the assessee, and therefore the proceedings is invalid and consequential order dt. 30/03/2022_is not sustainable in law.

2.1. That, addition of Rs. 52,50,616.00 u/s 68 is not called for and it is liable to be deleted. 2.2. That, addition of Rs. 87,00;000.00 is not called for and it is liable to be deleted.

5.1 As the ground of appeal, facts and circumstances in both the above appeals are identical and interconnected, our decision for ITA 346/RPR/2025, narrated herein above shall apply mutatis mutandis in accordingly the same is also allowed for statistical purposes.

Order pronounced in the open court on 25/06/2025.