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Facts
The assessee's return of income for AY 2017-18 was selected for scrutiny, leading to an assessment order disallowing purchases of Rs. 84,00,000/- as bogus. The assessee challenged this before the CIT(A), but failed to provide supporting evidence despite opportunities. The CIT(A) upheld the AO's order.
Held
The Tribunal observed that the assessee had been non-compliant before the first appellate authority and had not filed documentary evidence. However, considering the principles of natural justice, the Tribunal decided to give the assessee one more opportunity.
Key Issues
Whether the disallowance of purchases on an ad-hoc basis without proper show cause notice and without considering timely submission of evidence was justified, and whether the assessee should be granted another opportunity to present its case.
Sections Cited
250, 143(3), 143(2), 142(1), 133(6)
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Income Tax Appellate Tribunal, “G” BENCH, MUMBAI
O R D E R Per Kavitha Rajagopal, J M:
This appeal has been filed by the assessee, challenging the ex parte order of the learned Commissioner of Income Tax (Appeals) (‘ld.CIT(A) for short), National Faceless Appeal Centre (‘NFAC’ for short) passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2017-18.
The assessee has raised the following ground of appeal:
On the facts and in the circumstances of the case the Learned Commissioner of Income Tax (Appeals) (LIT) has erred in upholding the content of the Learned Assessing Officer ('A.O.') in disallowing purchases of the Appellant at 25% of Rs.3,36,55,836/- is Rs.84,00,000/- on an adhoc basis and without issuing show cause notice for proposed additions of Rs.84,00,000/- for due to the mere fact that the supplier Zarhak Steels Private Limited to whom notice u/s. 133 (6) of the Income Tax Act was issued had did not submit their response in time.
The brief facts of the case are that the assessee company had filed its return of income on 12.10.2017, declaring current year loss of Rs.8,58,122/-. The assessee’s case issued and duly served upon the assessee.
The ld. Assessing Officer ('A.O.' for short) passed the assessment order u/s. 143(3) of the Act on 08.12.2019, thereby determining the total income at Rs.75,41,878/-, by making additions/disallowance of Rs.84 lacs as bogus purchases.
Aggrieved, the assessee was in appeal before the first appellate authority, challenging the assessment order.
The ld. CIT(A) vide order dated 12.12.2023, upheld the order of the ld.A.O. for the reason that inspite of several opportunity the assessee has failed to substantiate its claim and has been non compliant throughout the appellate proceedings.
The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A).
We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has challenged the addition made by the ld. A.O. before the first appellate authority but has been non compliant and has not filed any documentary evidences in support of its claim.
The learned Authorised Representative ('ld. AR' for short) for the assessee contended that the assessee may be given one more opportunity to present its case before the ld. CIT(A) and had undertaken to file all the relevant documentary evidences before the ld. CIT(A) to substantiate the assessee’s claim. to setting aside the issue to the file of the ld. CIT(A) for the reason that the assessee was given several opportunity by the ld. CIT(A) which was not availed by the assessee.
On the above factual matrix of the case, we are of the considered view that the assessee may be given one more opportunity to present its case before the first appellate authority by adhering to the principles of natural justice. We, therefore, remand this issue back to the file of the ld. CIT(A) for de novo adjudication. The assessee is directed to comply with the proceedings without any undue delay.
In the result, the appeal filed by the assessee is allowed for statistical purpose.