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Facts
The assessee appealed against an addition of Rs. 1,11,17,348/- made by the AO under Section 69C for alleged bogus purchases, treating it as unexplained expenditure. The assessee also challenged the legality of the reassessment proceedings initiated under Section 148, arguing that the sanction under Section 151 was not as per law and that Section 147 provisions were not attracted. The CIT(A) had remanded the assessment for denovo adjudication after admitting additional evidence presented for the first time by the assessee.
Held
The Tribunal upheld the CIT(A)'s decision to remand the assessment to the AO for denovo adjudication, noting that the assessee had submitted new evidence at the CIT(A) stage. It directed the assessee to present both factual and legal grounds, along with necessary documentary evidence, before the AO during the denovo assessment. Consequently, the Tribunal dismissed the assessee's grounds of appeal.
Key Issues
1. Whether the addition made for alleged bogus purchases under Section 69C was justified. 2. Whether the reassessment proceedings initiated under Section 148, and the sanction under Section 151, were legally valid.
Sections Cited
69C, 148, 151, 147
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Income Tax Appellate Tribunal, RAIPUR BENCH, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY & SHRI ARUN KHODPIA
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM:
This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeals)/NFAC, Delhi dated 20.12.2024 for the assessment year 2016-17 as per the following grounds of appeal:
1. The AO erred in making addition of Rs.1,11,17,348/- on account of alleged bogus purchases treating it to be unexplained expenditure u/s. 69C. The addition made by the AO is illegal, arbitrary, baseless and not justified.
2. The notice issued u/s.148 and consequent reassessment order passed by AO is illegal inasmuch as the sanction u/s. 151 from specified authority is not as per law and without jurisdiction.
3. The initiation of re-assessment proceedings and issue of notice u/s. 148 is bad in law, illegal and ab initio void. Provisions of section 147 are not attracted in the case of appellant.
4. The appellant reserves the right to add, amend or alter any of the ground/s of appeal.”
2. At the very outset, it is noted that the Ld. CIT(Appeals)/NFAC had remanded the impugned order of assessment to the file of the A.O for framing denovo assessment observing as follows: “5.5 To prove the genuineness of the purchases, the appellant has, during the course of present proceedings submitted many documentary evidences. On careful perusal of para-1.1 of the submission made by the appellant it is admitted position that many of the documents are being produced for the first time before me. These documents should have been produced by the appellant during the course of assessment proceedings, more particularly, in response to the show cause notice issued to the appellant.
5.6 Be as it may, these arguments and documents were not available with the AO for his examination and for determination of total income. In the given facts and circumstances, in the interest of substantive justice, I consider it appropriate to set aside the impugned order of assessment to be framed denovo. The appellant is directed to cooperate with the assessment proceeding. 5.7 In view of the decision in para-5.3 above, decision on the remaining grounds of appeal is not required.
6. The appeal filed by the assessee is set aside.”
3. That it was admitted by the Ld. Counsel for the assessee before us that there were certain additional evidences which were produced for the first time before the Ld. CIT(Appeals)/NFAC and the same were not there before the A.O at the time of framing assessment. Therefore, in the interest of substantive justice, the Ld. CIT(Appeals)/NFAC accepted those additional evidence and remanded the matter back to the file of the A.O to determine the genuineness of the purchase of the assessee after considering the validity and authenticity of the additional evidence filed by the assessee.
4. In this regard, considering the merits of the matter, we do not find any infirmity in the findings of the Ld. CIT(Appeals)/NFAC which is hereby upheld. However, at the time of submission, the Ld. Counsel brought to our notice that in Form 35 there were certain legal grounds which were raised before the Ld.CIT(Appeals)/NFAC who had not adjudicated the same. In this regard, as evident from Para 5.7 itself of the impugned order since the matter has been remanded for denovo adjudication by the Ld. CIT(Appeals)/NFAC, therefore, it had not adjudicated the legal grounds raised by the assessee. Needless to say, since the assessment would be framed in denovo, the assessee shall put forth the legal grounds also before the A.O a/w. necessary documentary evidence. We, thus, in terms of our aforesaid observations, find no infirmity in the view taken by the Ld. CIT(Appeals) and uphold the same.
As per the above terms, the grounds of appeal raised by the assessee are dismissed.
In the result, appeal of the assessee is dismissed.
Order pronounced in the open court on 7th May, 2025.