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Income Tax Appellate Tribunal, HYDERABAD BENCHES “B” , HYDERABAD
Before: SHRI R.K. PANDA & SHRI LALIET KUMAR
O R D E R PER LALIET KUMAR, J.M.
This appeal is filed by the assessee, feeling aggrieved by the order passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi dated 27.07.2023 for the AY 2016-17 on the following grounds :
2. The grounds raised by the assessee reads as under :
“1.The appellate order passed by the National Faceless Appeal Centre (‘NFAC’) dated 27.07.2023 and the assessment order passed u/s 143(3) by the National Faceless Assessment Centre (‘NFAC’) dated 28.01.2019 are illegal, erroneous, bad in law and in violation of the principles of natural justice.
The NFAC and the NFAC ought to have considered all the relevant material on record before passing the assessment order and appellate order, respectively.
3. The NFAC erred in making and the NFAC erred in confirming the addition of Rs. 11,69,15,619/- towards purported bogus purchases.
The NFAC and the NFAC failed to appreciate that the transactions with creditors were in the regular course of business and do not represent bogus purchases as alleged.
5. The NFAC and the NFAC erred in treating the creditors as non- genuine for the mere reason that few details, including balance confirmation were not furnished at a short notice.
6. The NFAC and the NFAC failed to state the specific provisions of the Act under which addition of Rs. 11,69,15,619/- was made, consequently the addition is not sustainable.”
Facts of the case, in brief, are that assessee is a company filed its return of income u/s.139(1) of the Income tax Act on 16/10/2016 declaring total income of Rs.75,85,820/-. The case of the assessee was selected for limited scrutiny. Accordingly, Notices u/s 143(2) dated 27/07/2017 and 07/09/2017 were issued and served on the assessee. Thereafter, notice u/s 142(1) was issued on 04/10/2018 seeking information of share premium received during the year and the party wise current liabilities and the transactions with those parties, for which assessee replied on 29.11.2018 stating that there was no share application money and that it did not allot any shares to any person and also furnished the details of other current liabilities like Audit Fee payable, Salaries payable, Director remuneration payable, VAT payable etc. Thereafter, a show-cause notice was issued on 30.11.2018 asking for furnishing of information sought vide notice u/s 142(1) of the Act.
3.1. During the course of assessment, Assessing Officer observed that the ledgers produced by the assessee M/s Vaidik Iron & Steels Pvt. Ltd. has a Credit balance of Rs. 27,14,16,008/- as on 31.03.2016. However, the assessee did not produce the confirmation from the party. Assessee neither provided the essential details like address, PAN of the creditor for examination of the genuineness of the liability of the assessee company. Further on examination of the ledger account of M/s Vaidik iron & Steels Pvt. Ltd. in the books of the assessee, it is observed that the party has no opening balance and there were purchase transactions amounting to total Rs. 11,69,15,619/-. In spite of the repeated opportunities given to the assessee, the genuineness of the creditors was not proven by the assessee. Hence, the claim of purchases from this party amounting to Rs. 11,69,15,619/- was disallowed as expenditure and added back to the total income of the assessee. Since the assessee has concealed the particulars of its income, penalty proceedings u/s 271(1)(c) of Income Tax Act were initiated separately. Thus, Assessing Officer completed the assessment and passed assessment order dt.26.12.2018 u/s 143(3) of the Act.
4. Feeling aggrieved by the order passed by the assessing officer, assessee filed appeal before the Ld. CIT(A) / NFAC, who dismissed the appeal of assessee.
Feeling aggrieved with the order of ld.CIT(A), assessee is now in appeal before us.
On the date of hearing, none appeared on behalf of the assessee. Hence, we proceed to hear the appeal on the basis of information available on record and after hearing the ld. DR.
Per contra, the ld.DR relied upon the orders of lower authorities.
8 We have heard the ld. DR and perused the material available on record and also the order passed by the lower authorities. On perusal of the impugned order passed by ld.CIT(A), we found that ld.CIT(A) passed an order confirming the action of the Assessing Officer. The merits of the assessee’s appeal before the ld.CIT(A) have neither been discussed nor decided by the ld.CIT(A). From pages 6 to 8 of the order of ld.CIT(A), it is clear that ld.CIT(A) was forced to decide the appeal on the basis of material available on record, as there was no representation on behalf of the assessee. In view of the above reasons, in our view, the ends of justice will be met if the matter is remanded back to the file of ld.CIT(A) with a direction to decide the issue after considering the documents available on record and affording the opportunities of hearing to the assessee in accordance with law.
The assessee shall be at liberty to file documents, if any, as required for proving its case and the ld.CIT(A) shall consider the evidences, if any, filed by the assessee. Needless to say the ld.CIT(A) shall examine those documents / evidence filed by the assessee and also the other documents available on record. After considering the documents filed by the assessee and the submissions made by the assessee, the ld.CIT(A) shall pass a detailed speaking order dealing with the contentions of the assessee. We have not adjudicated the other grounds on merits as we are setting aside the orders passed by the lower authorities to the file of ld.CIT(A) for fresh adjudication. Thus, the grounds of the assessee are allowed for statistical purposes.
In the result, the appeal of the assessee is treated as allowed for statistical purposes.
Order pronounced in the Open Court on 6th March, 2024.