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Income Tax Appellate Tribunal, “B” BENCH KOLKATA
Before: SHRI SANJAY GARG & SHRI RAKESH MISHRA
S.K. Development Pvt. Ltd. DCIT, Circle 9(2) 23A, Netaji Subhash Road, Vs Aaykar Bhavan, P-7, 10th Floor, Kolkata-700001 Chowringhee Square, Kolkata-700069 (Appellant) (Respondent) PAN: AADCS7398K Present for: Appellant by : Shri Manish Tiwari, AR Respondent by : Shri P.P. Barman, DR Date of Hearing : 09.09.2024 Date of Pronouncement : 04.12.2024 O R D E R PER RAKESH MISHRA, ACCOUNTANT MEMBER:
This appeal filed by the assessee is against the order of the Ld. Commissioner of Income-tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as “the Ld. CIT (A)”) passed u/s 250 of the Income Tax Act, 1961 (hereinafter referred to as “the Act”) for AY 2009-10 dated 25.04.2024, which has been passed against the assessment order u/s 263/143(3) of the Act, dated 22.03.2015. 2. The grounds of appeal raised by the assessee are reproduced as under:
1.) That on the facts and in the circumstances of the case, Ld. CIT(A) has erred in passing order u/s 250 of Income Tax Act, 1961 dated 24.04.2024 on ex-parte view for non-compliance. S.K. Development Pvt. Ltd.; A.Y. 2009-10 2.) (a) That on the facts and in the circumstances of the case, Ld CIT(A) has erred in confirming the addition of Rs. 38,20,000/- on account of bogus purchases. (b) That on the fact and in the circumstances of the case, Ld. CIT(A) erred in confirming the action of AO who concluded that the appellant company inflated purchases by Rs. 38,20,000/- thereby making addition. 3.) That the appellant craves leave to add, alter, adduce or amend any ground(s) on or before the date of hearing of the appeal.
Brief facts of the case are that the assessee had filed its return of income on 29.09.2019, declaring total income of ₹79,95,260/-. Originally, the assessment u/s 143(3) of the Act was passed on 22.12.2011, whereby the total income of the assessee was assessed at ₹81,23,260/-. Subsequently, the Ld. CIT-3, Kolkata found that the order passed u/s 143(3) of the Act was prejudicial to the interest of the Revenue and he initiated the proceedings u/s 263 of the Act. Consequent to the order under section 263, the assessment u/s 143 read with section 263 of the Act was passed on 22.03.2015, whereby the addition of ₹38,20,000/- was made on account of bogus purchases and the total income was assessed at ₹1,19,43,260/-.
Aggrieved with the order of the Ld. AO, the assessee filed an appeal before the Ld. CIT(A) who dismissed the appeal on account of non-submission of response/submission during the appellate proceedings despite several notices being issued and with the findings which read as under:-
“6. DECISION: I have gone through and duly considered the facts emanating from grounds of appeal and statement of facts and other facts of the case available on the record. From the documents available on record, it is found that the appellant didn't furnish satisfactory documentary evidence to explain its state of affairs during the assessment proceedings of A.Y. 2009- 10. 6.1. Grounds 1 & 2: During the appellate proceedings, the appellant has not complied to the notices issued nor filed any written submission. In absence of the written submission and evidence, it remained to be unexplained as to how the AO's order is erroneous. If the appellant claims that the assessment S.K. Development Pvt. Ltd.; A.Y. 2009-10 order was objectionable it should have provided supporting arguments of evidences. The appellate proceedings are first line of remedy to those who think that the injustice has been done by the AO. However, the appellant failed to avail the same by non- complying. I am of the view that the government cannot waste its own resources in time and money by providing endless opportunities to pursue taxpayers their own appeals, especially when numbers of pending appeals are high. The more opportunities to a particular taxpayer are always at the cost of denying opportunity to other taxpayer of getting his/her appeal heard early. Therefore, it is assumed that the appellant is not interested in pursuing his own appeal. Moreover, the appellant failed to bring on records any facts or documents which can explain how the order of the AO is erroneous. 6.2. As per the assessment order dated: 22.03.2015, total income of the appellant was assessed at Rs. 1,19,43,260/- after making addition of Rs.38,20,000/- on account of bogus purchases. During the assessment proceedings, appellant company in its books of accounts shows total purchase of "Toughened Glass" of Rs. 48,22,500/- from one entity named "M/s. Nitson & Amitsu Solutions Pvt. Ltd.". During the course of assessment proceedings, statements of accounts received from entity "M/s. Nitson & Amitsu Solutions Pvt. Ltd." shows this amount as Rs. 10,02,500/- only. The Id. AO during the course of assessment, sought clarity regarding this discrepancy of purchases. No satisfactory documentary evidences were produced by the appellant company before the AO regarding these discrepancies, therefore, the AO has made an addition of difference amount of Rs. 38,20,000/- on account of bogus purchases. During the appellate proceedings, the appellant has not complied to the notices issued nor filed any written submission. In response to the most of the notices issued, appellant company has sought adjournment but never filed any submission which supports its grounds of appeal. Accordingly, I agree with the reasons given by the AO and confirm his action of making addition of Rs. 38,50,000/- on account of bogus purchases. Grounds of appeal Nos. 1 and 2 are hereby dismissed.
7. Ground no. 3: Since no such option has been exercised by the appellant during the appellate proceedings, it is clear that this ground of appeal is academic in nature and does not merit separate adjudication.”
5. At the time of hearing Ld. Counsel for the assessee though raised two grounds of appeal but firstly he contended that the Ld. CIT(A) confirmed the order of the Ld. AO ex parte in view of non- compliance to various notice issued and the assessee was prevented from making a representation before him and the order was passed. Hence, the ld. Counsel for the assessee prayed before the bench to set aside the order of the Ld. CIT(A) and restore the matter to his file for fresh adjudication. S.K. Development Pvt. Ltd.; A.Y. 2009-10
6. On the other hand, the Ld. CIT, DR opposed this prayer of the assessee.
7. The addition of ₹38,20,000 was made as the Ld. AO had conducted enquiries for the purchases made from M/s Nitson & Amitsu Solutions Pvt. Limited which were being claimed at ₹ 48,22,500 by the assessee while the supplier had confirmed purchases of only ₹ 10,02,500 and as no reconciliation of the discrepancy was made before the Ld. AO, the addition of ₹ 38,20,000 was made. Before the Ld. CIT(A) as well, the assessee did not respond to the notices of hearing issued nor made any submission and only sought adjournments. The Ld. AR requested that in the interest of justice and fair play, the matter may kindly be restored to the file the Ld. CIT(A) in order to enable the assessee to make proper submissions before him. The Ld. DR requested that the order of the Ld. CIT(A) may be confirmed.
8. We have considered the request and note that the addition has been confirmed as no proper representation was made before the Ld. CIT(A). Hence, in view of the facts of the case, we are of the view that a final opportunity may be granted to the assessee and the order of the Ld. CIT(A) is hereby set aside to him to be made afresh. The assessee shall furnish all necessary evidence in support of the claim that the addition was not warranted and shall not seek any unnecessary and avoidable adjournment. Hence for statistical purposes, Ground Nos. 1 and 2 are allowed while Ground No. 3 being general in nature, does not require any separate adjudication.