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Facts
The revenue appealed against the CIT(A)'s order which partly allowed the assessee's appeal for AY 2011-12, deleting additions related to accommodation entries (Rs. 88.73 lakhs) and bogus purchases (Rs. 21.17 crores). The original assessment was under section 143(3) and included additions under section 68, with penalty proceedings initiated. The Tribunal observed issues with unserved notices to the assessee and the CIT(A)'s reliance on a retracted statement for deletion of additions.
Held
The Tribunal found that notices to the assessee remained unserved and the CIT(A) had relied on a retracted statement for deleting additions. To ensure justice and fair play, the matter was restored to the CIT(A) with a direction to pass a fresh order only after ensuring proper service of notice on the assessee.
Key Issues
Whether the CIT(A) erred in deleting additions for accommodation entries and bogus purchases by admitting additional evidence and relying on a retracted statement, particularly when notices to the assessee were unserved.
Sections Cited
Section 143(3), Rule 46(2), Section 133(6), Section 68, Section 271(1)(c), Section 274
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DELHI BENCH ‘H’, NEW DELHI
Before: SH.M. BALAGANESH & SH. SUDHIR KUMAR
Appellant by Sh. Pravin Rawal, CIT DR Respondent by None Date of hearing: 16/10/2024 Date of Pronouncement: 14/11/2024 ORDER PER SUDHIR KUMAR, JM:
This appeal by the revenue is directed against the order of the Commissioner of Income Tax (Appeals)-23, New Delhi [hereinafter referred to as “CIT(A)”] vide order dated 14.03.2019 pertaining to A.Y. 2011-12 pertaining to arises out of the assessment order dated30.03.2014under section 143(3)of the Income Tax Act 1961 [hereinafter referred as ‘the Act’].
The assessee has raised following grounds of appeal :-
1. That the Ld. CIT(A) erred in law and on facts in admitting the additional evidences under Rule 46 (2) furnished by the assessee without properly appreciating that proper and sufficient opportunity was given to the assessee and assessee was not prevented by any reasonable cause to furnish such evidence before the Assessing Officer.
2. That the Ld. CIT(A) erred in law and on facts in deleting the additions of Rs.88,73,513/- made by AO on account of brokerage or commission on amount of accommodation entries provided by assessee without properly appreciating the facts and circumstances of the case.
3. That the Ld. CIT(A) erred in law and on facts in deleting the addition of Rs.21,17,25,385/- out of total addition of Rs.21,39,40,468/- made on account of bogus purchase, without properly appreciating the facts and circumstances of the case.
4. That the order of the CIT(A) is erroneous and not tenable in law and on facts and it is prayed that the order of the learned CIT(A) may be set aside and the order of the AO be restored.
3. The brief facts of the case are that the company is stated to be engaged in trading and Alloys. The assessee company has filed his return of income declaring Rs 7,19070/- for the A.Y. 2011-12 on 26-09-2011. The case was selected for scrutiny through CASS and notice u/s 143(2) of the Act was issued accordingly. In the response of the notice the authorized representative attended the proceedings. The assessee company during the year under consideration has shown a turnover of Rs.276,60,05,167/- as compared to the turnover of Rs.5,500/- in the immediate preceding year. Necessary notices u/s.133 (6) of the Act were issued to gather information from sale and purchase parties. The AO has made the total addition of Rs 22,35,33,050/- u/s 68 of the Act and penalty proceedings u/s. 271 (1)(c) read with section 274 for concealment / filing of inaccurate particulars of income has already been initiated.
4. Aggrieved by the order of the AO, the assessee has filed the appeal before Ld CIT(A) who vide order dated 14.03.2019 has partly allowed the appeal. Aggrieved the order dated 14-03-2019 the revenue is in appeal before us.
None present on behalf of the assessee. We have heard the Ld.DR and perused the material available on record.
The Ld. DR has filed an affixure report and submitted that the notice issued by the Hon’ble H Bench ITAT in A.Y.2011-12 have been affixed by Sh. Adhtiya Kumar, Tax Assistant on 01.11.2023 in his presence at above mentioned address which is the last known address of the assessee, as notice could not be served on him personally.
We have heard the ld. DR and perused the material available on record. The Ld. DR has submitted that the notice has not been served to the assessee as the assessee was not residing at the given address. The notice returned back as un- served as per the report submitted by the Inspector himself.
On perusal of the order of the Ld CIT(A) reveals that some letters issued u/s 133(6) of the Act were returned back un- served. The authorized representative did not show any reasonable cause why the notices were received un-served. The Ld.CIT(A) has relied the cross examination of Sh. Amit Gupta conducted on 10-04-2018. Shri Amit Gupta has retracted his statement after 6 years. Ld CIT(A) has erred in deleting the addition made by AO. The appeal of the revenue is liable to be allowed for statistical purpose. Therefore, in the interest of justice and fair play we restore the issue to the files of the Ld CIT(A). The Ld CIT(A) is directed to pass the fresh order after proper service of the notice upon the assessee.
In the result the appeal of the revenue is allowed for statistical purpose.
Order pronounced in the open court on 14.11.2024.