HITESH MAHESHWARI,THAKURDWARI vs. ITO 19(1)(5) MUMBAI, TARDEO
What did the Tribunal hold?
The Tribunal held that the primary ground raised by the assessee, which was the lack of a proper opportunity of hearing before the CIT(A), was valid. The Tribunal observed that no proper opportunity was given to the assessee by the CIT(A). Consequently, the Tribunal deemed it appropriate to restore the matter to the CIT(A) for fresh adjudication. The CIT(A) was directed to provide the assessee with a proper opportunity of being heard. The Tribunal allowed the appeal of the assessee for statistical purposes, indicating that the substantive issues of reopening and disallowance were not adjudicated on merits but were remanded back due to procedural infirmities. No issue was expressly left undecided, as the matter was remitted for fresh consideration.
What were the facts?
The assessee, Hitesh Maheshwari, filed an appeal against the order of the Commissioner of Income-tax (Appeals) [CIT(A)] dated 19.09.2023 for Assessment Year 2011-12. The assessee had originally declared an income of Rs. 3,43,280/-. The case was reopened based on information from the VAT department indicating the assessee was a beneficiary of non-genuine bills totaling Rs. 18,36,377/-. The Assessing Officer (AO) completed the assessment under section 143(3) read with section 147 of the Income-tax Act, 1961, adding Rs. 18,36,377/- on account of non-genuine purchases, resulting in an assessed income of Rs. 18,36,377/-. The assessee's appeal before the CIT(A) was dismissed ex-parte due to non-compliance. The present appeal before the ITAT challenges the CIT(A)'s order.
What were the issues?
1. Whether the National Faceless Appeal Centre (NFAC) erred in not granting an opportunity of hearing to the appellant, and consequently, should the matter be set aside to the NFAC for a fresh hearing? (Question of procedure/natural justice) 2. Whether the NFAC erred in upholding the reopening of the assessment under section 148 of the Act? (Question of law) 3. Whether the NFAC erred in upholding the disallowance of bogus purchases of Rs. 18,36,377/-, considering that the AO allegedly did not issue notice for purchase details, did not provide the name of the party, relied solely on VAT department information without independent investigation, falsely claimed to have asked for details of entry providers and delivery challans, and did not grant an opportunity for cross-examination of alleged entry providers? (Question of mixed law and fact) Assessee's Contentions: - The NFAC did not grant an opportunity of hearing, necessitating a set-aside. - The reopening under section 148 was erroneous. - The disallowance of bogus purchases was unjustified due to procedural lapses by the AO, including lack of notice, failure to identify parties, reliance on external information without independent inquiry, and denial of cross-examination. Revenue's Contentions: - No specific contentions for the revenue are recorded in the judgment.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Before: SMT. BEENA PILLAI & SMT. RENU JAUHRI
Appellant by : Shri Jay Bhansali Respondent by : Shri Dharamveer D. Yadav Date of Hearing 09.10.2024 Date of Pronouncement 28.10.2024 आदेश / O R D E R PER RENU JAUHRI [A.M.] :- This appeal is filed by the assessee against the order of the Learned Commissioner of Income-tax (Appeals), Mumbai-30/National Faceless Appeal Centre, Delhi [hereinafter referred to as “CIT(A)”] dated 19.09.2023 passed u/s. 250 of the Income-tax Act, 1961 [hereinafter referred to as “Act”] for Assessment Year [A.Y.] 2011-12.
The assessee has raised following grounds of appeal:
1. On the facts and circumstances of the case and in law, the Id NFAC erred in not granting an opportunity of hearing to the appellant. The appellant craves that the matter be set aside to the Id NFAC for hearing afresh. 2 The Id NFAC erred in upholding the reopening of the assessment u/s 148 of the Act.
The Id NFAC erred in upholding the disallowance of bogus purchases of Rs 18,36,377/-despite the fact that: •The AO has not issued any notice calling for details of purchases. • The name of the party from whom bogus purchases were allegedly made was not provided to the assessee. • The AO has merely relied upon information from VAT Department without doing any independent investigation. • The AO has falsely mention in the Assessment Order that he asked for details of the alleged entry providers, delivery challans, etc. • The AO did not grant an opportunity to cross examine the alleged entry providers.
3. The assessee has also raised following additional grounds: “1. On the facts and circumstances of the case and in law, the Income-tax Officer, ITO Ward 1, Palanpur erred issuing notice dated 27.03.2018 under section 148 of the Income-tax Act, 1961 to reopen the case of the assessee although he had no jurisdiction to do so. Consequently, the reassessment proceedings and the reassessment order dated 28.12.2018 under section 143(3) r.w.s 147 of the Act is bad in law and liable to be quashed;”
The brief facts of the case are that the assessee filed return declaring income of Rs. 3,43,280/- on 30.09.2011 for the AY 2011-12. After receipt information from VAT department that the assessee was one of the beneficiaries in non-genuine bills transaction of Rs. 18,36,377/-, the case was reopened. Assessment was completed u/s 143(3) r.w.s 147 at an income of Rs. 18,36,377/- vide order dated 28.12.2018 after adding Rs. 18,36,377 on account of non- genuine purchases.
Aggrieved with the order, the assessee filed an appeal before Ld. CIT(A). However, the assessee’s appeal was dismissed exparte, as there was no compliance by the assessee during the appellate proceedings.
Before us, the first ground taken by the assessee pertains to not granting opportunity of hearing to the assessee. The assessee has requested that the matter is set aside to the Ld. CIT(A) for a fresh hearing.
We have heard the rival submissions and perused the material available on record. It is clear that no proper opportunity was given to the assessee by the Ld. CIT(A). We accordingly deem it proper to restore the matter to the Ld. CIT(A) for afresh adjudication after giving proper opportunity of being heard to the assessee. 8. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 28.10.2024.
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- Adj Agri International LLP, Rajkot vs The Income Tax Officer, Ward-1(1)(1), RajkotITA 1198/RJT/2026[2018-19]Status: Disposed21 Oct 2026AY 2018-19
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