AVISH JUGALKISHORE ATAL,AKOLA V. DEPUTY COMMISSIONER OF INCOME TAX - CENTRAL CIRCLE 6(1), MUMBAI, MUMBAI

ITA 702/MUM/2025

AI Insights

The case involves Avish Jugalkishore Atal, the proprietor of M/s. Avish Traders, who appealed against the order of the Commissioner of Income Tax (Appeals) 54, Mumbai. The appeal was related to the Assessment Year 2012-13 and challenged the reassessment order which included additions for bogus purchases of cotton bales and disallowance of brokerage expenses. The initial reassessment was based on information that the assessee had made bogus purchases aggregating to Rs.1.30 Crore. The AO had passed a best judgment assessment due to non-compliance by the assessee, which was later upheld by the CIT(A) but dismissed for lack of prosecution. The Tribunal found that the assessee should be given another opportunity to present his case, emphasizing the principles of natural justice.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 25088 (ITAT-MUMBAI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2012-2013
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAM KRISHN KEDIA
• Assessee Lawyers: DHARAN GANDHI
• Keywords: Opportunity of being heard; Bogus purchase; Period of limitation; Principle of natural justice; Bogus
• Section: 147; 148; 144

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, MUMBAI BEFORE SHRI. OM PRAKASH KANT, AM AND MS. KAVITHA RAJAGOPAL, JM ITA No. 702/Mum/2025 (Assessment Year: 2012-13) Avish Jugalkishore Atal 3rd Floor, Trineshwar Complex, Tilak Road, Akola – 444001. Vs. Deputy Commissioner of Income Tax – Central Circle 6(1), Mumbai Kautilya Bhavan, Mumbai – 400051. PAN/GIR No. ABIPA6112C (Assessee) : (Respondent) Assessee by : Shri. Dharan Gandhi Respondent by : Shri. Ram Krishn Kedia, (SR. DR.) Date of Hearing : 13.03.2025 Date of Pronouncement : 20.03.2025 O R D E R Per Kavitha Rajagopal, J M: This appeal has been filed by the assessee, challenging the order of the learned Commissioner of Income Tax (Appeals) 54, Mumbai (‘ld. CIT(A)’ for short), passed u/s.250 of the Income Tax Act, 1961 (‘the Act'), pertaining to the Assessment Year (‘A.Y.’ for short) 2012-13. 2. It is observed that this appeal has been filed belatedly with a delay of 457 days beyond the period of limitation for which the assessee had filed an affidavit for condoning the said delay. On perusal of the same, we deem it fit to hold that the assessee had ‘sufficient cause’ for the delay and we therefore condone the delay caused in filing the present appeal. 3. The assessee has raised the following grounds of appeal: ITA No. 702/Mum/2025 (A.Y. 2012-13) Avish Jugalkishore Atal 2 “1. The assessment order u/s 144 r.w.s 147 of the Act dated 21.12.2014 is bad in law and without jurisdiction. 2. The reassessment proceeding initiated by issuing notice u/s 148 of the Act is bad in law. 3. The Ld. CIT(A) erred in confirmation of the action of the Ld. AO in making addition of Rs. 1,28,80,000/-with regard to bogus purchases of cotton bales. 4. The Ld. CIT(A) erred in upholding the action of the Ld. AO in not allowing brokerage expenses of Rs. 1,20,000/- 5. The Ld. CIT(A) erred in dismissing the appeal for lack of prosecution which is contrary to settled position in law. 6. The order of the Ld. CIT(A) is without sufficient opportunity of being heard as none of the notices were served on proper email address.” 4. Brief facts of the case are that the assessee is an individual and proprietor of M/s. Avish Traders. The assessee had filed his return of income dated 30.09.2012, declaring total income at Rs. 25,39,467/-. The assessee’s case was reopened vide notice u/s. 148 dated 29.03.2017, based on the information that the assessee has made bogus purchases of cotton bales and cotton lint through Shri. Anil Nandlal Mundada, aggregating to Rs.1.30 Crore without any actual delivery of goods. Further, the learned Assessing Officer ('ld. A.O.' for short) observed that the assessee had filed declaration under Income Declaration Scheme, 2016, with respect to the said purchase for Rs. 1,20,000/- in which the assessee had made a declaration that the said purchase was made in the year 2012. The assessee was non-compliant before the ld. AO and the ld. AO had passed the assessment order u/s. 144 r.w.s. 147 of the Act, dated 21.12.2017, being the best judgment assessment, determining total income at Rs. 1,55,39,470/-, after making an addition on bogus purchases amounting to Rs.1,28,80,000/- and disallowance of brokerage of Rs. 1,20,000/-, pertaining to the said bogus purchases. ITA No. 702/Mum/2025 (A.Y. 2012-13) Avish Jugalkishore Atal 3 5. Aggrieved the assessee was in appeal before the first appellate authority, who vide an ex parte order dated 11.08.2023, had dismissed the appeal filed by the assessee for the reason that the assessee has been non-compliant and has failed to substantiate his claim. 6. The assessee is in appeal before us, challenging the impugned order of the ld. CIT(A) on the above-mentioned grounds. 7. We have heard the rival submissions and perused the materials available on record. It is observed that the assessee has been non-compliant throughout the proceeding before the first appellate authority and had failed to furnish any explanation along with any supporting documentary evidence in support of his claim. The ld. CIT(A) has also not decided the issue on the merits of the case for the above-mentioned reason. 8. The learned Authorised Representative (ld. AR for short) for the assessee contended that the assessee has got a good case on the merits and prayed that the assessee may be given one more opportunity to present his case before the lower authorities. 9. The learned Departmental Representative (ld. DR for short) vehemently opposed to setting aside the issue to the lower authorities for the reason that the assessee was given sufficient opportunity before the ld. AO as well as before the ld. CIT(A) but has not availed of the same. The ld. DR relied on the order of the lower authorities. 10. In the above facts of the case, we are of the considered opinion that the assessee may be given one more opportunity to present his case before the ld. AO by furnishing the documentary evidence proposed to be filed by the assessee in order to substantiate his claim. We therefore remand all these issues back to the file of the ld. AO by adhering to the principles of natural justice and in the interest of justice dispensation. The ld. AO ITA No. 702/Mum/2025 (A.Y. 2012-13) Avish Jugalkishore Atal 4 is directed to consider the submission of the assessee and to pass a de novo assessment order on the merits of the case and in accordance with law. 11. In the result, the appeal filed by the assessee is allowed for statistical purpose. Order pronounced in the open court on 20.03.2025 Sd/- Sd/- (OM PRAKASH KANT) (KAVITHA RAJAGOPAL) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated: 20.03.2025 Karishma J. Pawar (Stenographer) Copy of the Order forwarded to: 1. The Appellant 2. The Respondent 3. CIT- concerned 4. DR, ITAT, Mumbai 5. Guard File BY ORDER, (Dy./Asstt.Registrar) ITAT, Mumbai "