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Facts
The assessee filed a return for AY 2018-19. The AO, based on information of alleged GST evasion and purchases without goods movement from M/s. Tumbqun Plastic (₹13,12,816/-), initiated proceedings under section 148A(b), and issued a notice under 148. Due to the assessee's non-compliance, the AO completed an ex-parte assessment under section 144, disallowing the purchases, which was upheld ex-parte by the CIT(A).
Held
The Tribunal observed that both the assessment and first appellate orders were passed ex-parte due to the assessee's non-compliance. In the interest of justice and fair play, the matter was remanded to the CIT(A) for fresh examination, granting the assessee a reasonable opportunity of being heard. The assessee was directed to cooperate in the fresh proceedings.
Key Issues
Whether ex-parte assessment and first appellate orders confirming disallowance of purchases based on alleged GST evasion are valid without providing the assessee a proper opportunity of being heard.
Sections Cited
Section 250, Section 148A(b), Section 148, Section 144
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Income Tax Appellate Tribunal, BENCH-RANCHI
Before: Shri Sonjoy Sarma & Shri Ratnesh Nandan Sahay
Assessment Year: 2018-19 Shambu Dayal Modi………….……………............................……….……Appellant Modi Plastic Udyog, Mini Shed No.-31, 32, Phase-III, Adityapur Industrial Area, Adityapur, Jamshedpur, Seraikela-Kharsawan, Jharkhand-832109, Jamshedpur, Jharkhand – 832109. [PAN: AKXPM9308G] vs. ITO, Ward-3(1), Jamshedpur...…..….…..….........……........……...…..…..Respondent Appearances by: None appeared on behalf of the appellant. Shri Khubchand T. Pandya, Sr. DR, appeared on behalf of the Respondent. Date of concluding the hearing : October 14, 2025 Date of pronouncing the order : October 15, 2025 ORDER
Per Sonjoy Sarma, Judicial Member:
This appeal by the assessee is directed against the order of the NFAC, Delhi [“CIT(A)”] dated 19.03.2025 under section 250 of the Income-tax Act, 1961 (the “Act”) for the assessment year 2012–13.
Brief facts of the case are that the assessee filed its return of income for the assessment year 2018–19 declaring a total income of ₹5,45,350/-. Subsequently, the Assessing Officer received information that the assessee was allegedly involved in GST evasion by facilitating purchases without actual movement of goods. As per the information received from the GST database, the assessee had shown purchases amounting to ₹13,12,816/- from M/s. Tumbqun Plastic during the year under consideration. Based on this information, the Assessing Officer initiated proceedings under section 148A(b) of the Income-tax Act, 1961, Shambu Dayal Modi and thereafter issued notice under section 148 of the Act. Several statutory notices were issued to the assessee, calling for explanations and supporting documents. However, the assessee failed to comply with any of the notices issued. In the absence of any response, the Assessing Officer completed the assessment under section 144 of the Act on the basis of information available on record, disallowing the purchases of ₹13,12,816/- from M/s. Tumbqun Plastic and adding the same to the total income of the assessee.
Aggrieved by the above order, the assessee preferred an appeal before the learned CIT(A). However, despite being afforded several opportunities, the assessee neither appeared nor filed any written submissions. Accordingly, the Ld. CIT(A) disposed of the appeal ex parte, confirming the addition made by the Assessing Officer.
In the present appeal before the Tribunal, notices were duly issued by the Registry on consecutive occasions. However, neither the assessee nor any authorized representative appeared at the time of hearing. Since the matter cannot be kept pending indefinitely and both the authorities below have passed orders ex parte, we proceeded to hear the matter with the assistance of the learned Departmental Representative.
Having considered the material available on record, we find that the assessment as well as the first appellate order were both passed ex parte due to non-compliance by the assessee. In the interest of justice and fair play, we deem it appropriate to remand the matter to the file of the learned CIT(A) with a direction to re-examine the issue afresh after granting the assessee a reasonable opportunity of being heard. The assessee is also directed to cooperate in the proceedings before the CIT(A) and comply with all notices issued without fail.