OM SHRI SHUBH LABH AGRITECH PRIVATE LIMITED,GWALIOR vs. ASSISTANT COMMISSIONER OF INCOME TAX CENTRAL CIRCLE, GWALIOR

This appeal has been preferred against the impugned order dated 20.09.2024 passed in Appeal no. CIT(A)-3, Bhopal/IT-10289/2020-21 by the Ld. Commissioner of Income– tax(Appeals)-3, Bhopal [hereinafter referred to as the “CIT(A)”] u/s. 250 of the Income tax Act, 1961 [hereinafter referred to as "Act"] for the Assessment year [A.Y.] 2021-22, wherein learned CIT(A) has dismissed assessee’s 1st appeal and confirmed the additions made vide assessment order dated 31.12.2022 passed u/s 143(3) of the Act.

The brief facts under appeal state that the assessee company is engaged in business of whole sale of agricultural raw material, flour miling etc. The case was selected for complete scrutiny under CASS for A.Y. 2021-22. Statutory notices u/s. 143(2) and 142(1) of the Act were issued and served upon the assessee. After considering assessee’s reply, learned assessing officer completed the assessment u/s 143(3) and made various high pitched additions and assessed total income at Rs. Om Shri Shubh Labh Agritech Pvt. Ltd. v ACIT, Central Circle, Gwalior 1,73,32,20,040/-.vide assessment order dated 31.12.2022 passed u/s 143(3) of the Act.

Aggrieved, assessee preferred 1st appeal against the above said assessment order before learned CIT(A), who dismissed assessee’s first appeal, confirming the additions made by the assessing officer.

Appellant assessee has preferred this second appeal mainly on the ground that learned CIT(A) has erred in passing impugned order without considering the facts and judicial norms, ignoring the settled law that the GP rate to apply in case of bogus purchases.

We have perused the records. None responded for the appellant assessee. We proceed to decide the matter ex-parte on the basis of the material available on record. Heard learned representative in attendance for the respondent revenue, who supported the impugned order.

We notice that the assessee has challenged the confirmation of additions of Rs. 1500906058/- in respect of purchases from various traders as bogus purchases, addition of Rs. 5,48,16,466/- in respect of unexplained credits u/s 68 r.w.s. 115BBE of the Act and Rs. 19,95,000/- in respect of deprecation claimed on fixed assets. After going through the assessment order and the impugned order passed by the 1st appellate authority, it is noticed that the Ld. CIT(A) has observed in Para 3.2.4 of the impugned order that the appellant assessee did not provide any reason or details backed by evidence to counter the various observations made by the AO regarding each supplier. Ld. 1st appellate authority, Further, observed that since the basic details of purchase is fictitious and transaction is dubious so the point of natural justice and opportunity to cross examine does not have much importance. It is the settled law that the working of the Tribunal is based on the bedrock of the principles of natural justice. In the totality of facts and circumstances and keeping the high pitched additions in view, we are of the consistent view that the assessee be afforded an opportunity of hearing in accordance with the principles of natural justice. We, accordingly restore the matter to the file of assessing officer to decide the matter afresh after considering the submissions/evidences of the assessee so as to ensure the compliance of the principles of natural justice in the true spirit.