DY. COMMISSIONER OF INCOME TAX-1(1), BHILAI V. NIKHIL MITTAL, BHILAI

ITA 656/RPR/2025

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The case involves an appeal by the Deputy Commissioner of Income Tax-1(1), Bhilai against Shri Nikhil Mittal concerning the assessment year 2018-19. The appeal arose from an order by the Ld. CIT(Appeals)/NFAC, which had not addressed the merits of the case regarding bogus purchases made by the assessee from M/s. H.K Enterprises, a firm involved in Input Tax Fraud. The Income Tax Appellate Tribunal found that the CIT(Appeals) had not complied with the statutory requirements of Section 250(4) & (6) of the Income Tax Act, 1961, leading to the decision to remand the case for a thorough examination of the issues on merits.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 783817 (ITAT-RAIPUR)
• Duration Of Justice: 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 10-11-2025
• Appeal Filed By: Department
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2018-2019
• Appeal Filed On: 30-10-2025
• Other Referred Cases: Hexaware Technology Ltd. Vs. Assistant Commissioner of Income Tax (2024) 464 ITR 430 (Bom.)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Revenue
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: S.R RAO
• Keywords: Bogus purchase; Onus to prove; Principle of natural justice; Search and seizure; Accommodation entries; Bogus
• Section: 132; 133(6)

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ “एक-सदèय” मामला रायपुर मɅ IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH “SMC”, RAIPUR Įी पाथ[ सारथी चौधरȣ, ÛयाǓयक सदèय क े सम¢ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER आयकर अपील सं./ITA No.656/RPR/2025 Ǔनधा[रण वष[ /Assessment Year : 2018-19 The Deputy Commissioner of Income Tax-1(1), Bhilai (C.G.) .......अपीलाथȸ / Appellant बनाम / V/s. Shri Nikhil Mittal 32/32 Bunglow, Aamdi Nagar, HUDCO, Bhilai, Durg PAN: BEWPM0530J ……Ĥ×यथȸ / Respondent Assessee by : Shri S.R Rao, Advocate Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 10.11.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 10.11.2025 Printed from counselvise.com 2 DCIT-1(1), Bhilai Vs. Nikhil Mittal ITA No.656/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM The present appeal preferred by the Revenue emanates from the order of the Ld.CIT(Appeals)/NFAC, dated 25.08.2025 for the assessment year 2018-19 as per the grounds of appeal on record. 2. At the assessment proceedings, as per information available on record with the department, a search and seizure action was conducted u/s. 132 of the Income Tax Act, 1961 (for short ‘the Act’) in the case of Hanumant Trading and H.K Group on 19.02.2020. In his statement recorded on oath, Shri Mithilesh Kumar Tiwari, proprietor of M/s. H.K Enterprises has provided accommodation entries of bogus purchases and sale bills. That on verification of the details, it was observed that during the year under consideration, the assessee viz. Shri Nikhil Mittal, proprietor of M/s. Niros Industries had made bogus purchases amounting to Rs.54,20,106/-. The A.O had issued notice u/s. 133(6) of the Act to Shri Mithilesh Kumar Tiwari but there has been no reply from him. Again, by Verification Unit another notice u/s. 133(6) of the Act was also issued to Shri Mithilesh Kumar Tiwari but again, no reply has been received from him. Printed from counselvise.com 3 DCIT-1(1), Bhilai Vs. Nikhil Mittal ITA No.656/RPR/2025 3. That on careful consideration of the facts in the case of the assessee, it was observed by the A.O that the assessee had made total purchases of Rs.54,20,106/- from M/s.H.K Enterprises, proprietor Shri Mithilesh Kumar Tiwari and the said M/s.H.K Enterprises has been involved in Input Tax Fraud (ITC) by providing fake invoices. That finally, the A.O made addition of Rs.6,77,513/- (being 12.5% of Rs.54,20,106/-) as tainted purchases done from non-genuine parties since that the assessee also failed to discharge his burden to prove genuineness of such purchases made from M/s. H.K Enterprises. 4. That on careful perusal of the order of the Ld. CIT(Appeals)/NFAC, it is observed that the said authority has given relief to the assessee only on the issue of JAO/FAO relying on the decision of the Hon’ble High Court of Bombay in the case of Hexaware Technology Ltd. Vs. Assistant Commissioner of Income Tax (2024) 464 ITR 430 (Bom.) and Hon’ble High Court of Telengana and Hon’ble High Court of Gauhati in different matters with the same parity of reasoning akin to that held by the Hon’ble Bombay High Court (supra). However, the Ld. CIT(Appeals)/NFAC has not given any finding on merits of the matter nor on issues emanating from the assessment order. 5. At the time of hearing, the Ld. Counsel for the assessee had filed following written submissions: Printed from counselvise.com 4 DCIT-1(1), Bhilai Vs. Nikhil Mittal ITA No.656/RPR/2025 Printed from counselvise.com 5 DCIT-1(1), Bhilai Vs. Nikhil Mittal ITA No.656/RPR/2025 Printed from counselvise.com 6 DCIT-1(1), Bhilai Vs. Nikhil Mittal ITA No.656/RPR/2025 Be that as it may, the Ld. Counsel for the assessee also conceded that since the Ld. CIT(Appeals)/NFAC has not followed the mandate of the Act i.e. Section 250(4) & (6) of the Act and has not given his findings on merits on issues which emanates from the assessment order, therefore, the matter may be restored to the file of the Ld. CIT(Appeals)/NFAC after recording his submissions. 6. The Ld. Sr. DR in her submission vehemently contended that the issue of JAO/FAO remains sub-judice before the Hon’ble Apex Court of India and that since the Ld. CIT(Appeals)/NFAC has failed to adjudicate on the issues emanating from the assessment order regarding bogus purchases, therefore, the matter needs to be remanded back to the file of the First Appellate Authority for adjudication on merits. Printed from counselvise.com 7 DCIT-1(1), Bhilai Vs. Nikhil Mittal ITA No.656/RPR/2025 7. Having heard the submissions of the parties herein and on careful consideration of the facts and circumstances in this matter, the assessment order well establishes the fact that the assessee is a beneficiary of the bogus purchases made from M/s. H.K Enterprises, proprietor Shri Mithilesh Kumar Tiwari and the said entity i.e. M/s. H.K Enterprises is recorded to be involved in the Input Tax Fraud providing fake invoices. The assessee has failed to establish the genuineness of the purchases claimed to be have been made from the said entity. That as per the mandate of Section 250(4) & (6) of the Act, the Ld. CIT(Appeals)/NFAC should have conducted inquiry on this aspect and should have given his findings on the issue of bogus purchases as emanating from the assessment order and even after calling for a remand report from the A.O and at the same time, should have fulfilled the mandate of the Act. However, the Ld. CIT(Appeals)/NFAC chose to dispose off the appeal by resorting to an issue which itself is sub-judice before the Hon’ble Apex Court of India. Be that as it may, in the interest of substantial justice and on careful consideration of the submissions made by the parties herein, I am of the considered view that the matter needs to be remanded to the file of the Ld. CIT(Appeals)/NFAC for denovo adjudication on merits while complying with the principles of natural justice. The Ld. CIT(Appeals)/NFAC shall pass an order in conformity with Section 250(4) & (6) of the Act and the necessary inquiry conducted by it should be Printed from counselvise.com 8 DCIT-1(1), Bhilai Vs. Nikhil Mittal ITA No.656/RPR/2025 apparent in its findings itself so that the order comes out the character of a speaking order. The findings of the Ld. CIT(Appeals)/NFAC is set-aside. I order accordingly. 8. As per the above terms grounds of appeal raised by the Revenue stands allowed for statistical purposes. 9. In the result, appeal of the Revenue is allowed for statistical purposes. Order pronounced in open court on 10th day of November, 2025. Sd/- (PARTHA SARATHI CHAUDHURY) ÛयाǓयक सदèय/JUDICIAL MEMBER रायपुर / Raipur; Ǒदनांक / Dated : 10th November, 2025. SB, Sr. PS आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ / The Appellant. 2. Ĥ×यथȸ / The Respondent. 3. The Pr. CIT-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, “एक-सदèय” बɅच, रायपुर / DR, ITAT, “SMC” Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur Printed from counselvise.com "