GLOBAL TRADING COMPANY, RAIPUR ,RAIPUR V. INCOME TAX OFFICER, WARD-1(2), RAIPUR, RAIPUR

ITA 302/RPR/2024

AI Insights

The case involves Global Trading Company appealing against the order of the Commissioner of Income Tax (Appeals), which upheld the additions made by the Assessing Officer under various sections of the Income Tax Act, 1961. The additions were primarily based on alleged bogus purchases and sales, which the assessee contested as being genuine transactions supported by proper documentation. The ITAT found procedural lapses in the handling of the assessee's request for adjournment due to medical emergencies, leading to a violation of the principles of natural justice. Consequently, the ITAT set aside the CIT(A)'s order and remanded the case for a fresh hearing.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 29783 (ITAT-RAIPUR)
• Duration Of Justice: 4 month(s) 30 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-11-2024
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Next Hearing Date: 28-08-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 21-06-2024
• Other Referred Cases: Hexaware Technologies Ltd Vs ACIT & Ors., Siemens Financial Services (P) Ltd Vs DCIT, Panabyte Technologies Ltd Vs DCIT & Ors, Twylight Infrastructure (P) Ltd Vs ITO, Goldiam International Ltd Vs DCIT, DCW Ltd Vs ACIT & Ors, J.M. Financial & Investment Consultancy Services (P) Ltd Vs ACIT, MA Multi-Infra Development (P) Ltd Vs ACIT, Harsha Rice Mills (P) Ltd Vs ITO, Krishna Industries Vs ITO, Shanti Parboiling Industries VS ACIT Circle 2(1), Raipur, CIT vs. Premkumar Arjundas Luthra (HUF)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: S.L.ANURAGI
• Assessee Lawyers: RAHUL BARDIA
• Keywords: Set aside; Opportunity of being heard; Corroborative evidences; Unexplained expenditure; Income from undisclosed sources; Bogus purchase; Period of limitation; Reopening of assessment; Principle of natural justice; Third party statement; Search and seizure; Accommodation entries; Initiation of penalty proceedings; Opportunity of cross examination; Bogus
• Section: 147; 148; 144; 143(3); 142(1); 250; 271(1)(c); 251; 48; 68; 69C; 153C; 44AB; 72; 145(3); 246A; 20; 101

Judgement Text

" आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी रिवश सूद, Ɋाियक सद˟ एवं ŵी अŜण खोड़िपया, लेखा सद˟ क े समƗ । BEFORE SHRI RAVISH SOOD, JM & SHRI ARUN KHODPIA, AM ITA No. 302/RPR/2024 (Assessment Year: 2016-17) आदेश / O R D E R Per Arun Khodpia, AM: The captioned appeal is filed by the assessee against the order of learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi (in short, Ld. CIT(A)), passed u/s 250 of the Income Tax Act, 1961 (in short, ‘the Act’) for the AY 2016-17 dated 29.04.2024, which in turn arises from the order of the learned Assessing Officer (AO), Assessment Unit, Income Tax Department passed u/s 147 r.w.s. 144B of the Act, dated 12.05.2023. 2. The grounds of appeal raised by the assessee are extracted as under: Global Trading Company, K. No.712/1 Near Loha Bazar, Ring Road No.2, Raipur, 493221, Chhattisgarh. V S Assistant Commissioner of Income Tax Circle 2(1), Revenue Building, Raipur Chhattisgarh 492001. PAN: AAHFG4356L (अपीलाथŎ/Appellant) . . (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से / Assessee by : Shri Rahul Bardia, CA राजˢ की ओर से / Revenue by : Shri S.L. Anuragi, CIT-DR सुनवाई की तारीख / Date of Hearing : 28.08.2024 घोषणा की तारीख / Date of Pronouncement : 20.11.2024 ITA No.302/RPR/2024 Global Trading Company 2 “Ground No.1: The order passed by the Commissioner of Income Tax (Appeals) (hereinafter referred to as \"the CIT(A)] is bad in Law and on facts and circumstances of the case. Ground No.2: The learned CIT(A) has erred on facts and in law in upholding the impugned order of the learned assessing officer which is contrary to law, passed without application of mind and without complying with the procedure and rules, is against equity and justice and facts of the assessee and material on record. Ground No.3: On the facts and circumstances of the case and in law, the notice issued u/s 148 and order passed in this case is contrary to law including the specific provision of section 147 to 151 of the Act and CIT(A) erred in not holding so. Ground No.4: On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in passing the ex-parte order, without granting sufficient opportunity of being heard to the appellant even after requesting for adjournment before the hearing date due to the medical contingencies. That the Ld. CIT(A) has erred in upholding the addition without considering the submission on merits as well as on technical grounds. Non-Grant of adjournment which is out of genuine reasons is against the principle of natural justice. Ground No.5: Without prejudice to above grounds, the learned CIT(A) erred in confirming the action of Learned Assessing Officer without appreciating the fact that notice issued for A.Y. 2016-17 dated 30.06.2021 not being the subject matter before the Honble Apex Court, these notices cannot be deemed to be issued u/s. 148A(b) of the Act and Taxation and Other Laws (Relaxation and Amendment of certain provisions) Act, 2020 [TOLA] was not applicable for Assessment Year 2016-17 and therefore, there is no question of Revenue relying on TOLA to justify the impugned notice under Section 148 of the Act as being within the period of limitation. The notice issued for A.Y. 2016-17 dated 30.06.2021 is bad in law and void ab initio as the impugned notice is barred by limitation. Ground No.6: Without prejudice to above grounds, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the action of Learned Assessing Officer for the primary impugned notice issued u/s 148 of the Act dated 30.06.2021, without quoting the mandatory Documentation Identification Number (\"DIN\") on the body of the said directions, in contravention of the CBDT Circular No. 19/2019 dated August 14, 2019 and is therefore, invalid and shall be deemed to have never been issued. The Ld. AO has not disposed off the ground raised properly. Thus, making the entire assessment process non- est and invalid. Ground No.7: Without prejudice to above grounds, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the action of Learned Assessing Officer for the impugned notice dated 19.07.2022 issued under Section 148 of the Act is barred by limitation as per the first proviso to Section 149 of the Act. Therefore, the ITA No.302/RPR/2024 Global Trading Company 3 said notice along with the assessment order passed by the AO is invalid and bad in law. Ground No.8: Without prejudice to above grounds, on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in upholding the action of Learned Assessing Officer for the impugned notice issued u/s 148 dated 19.07.2022 without quoting the mandatory Documentation Identification Number (\"DIN\") on the body of the said directions, in contravention of the CBDT Circular No. 19/2019 dated August 14, 2019 and is therefore, invalid and shall be deemed to have never been issued. The Ld. AO has not disposed off the ground raised properly. Thus, making the entire assessment process non-est and invalid. Ground No. 9: Without prejudice to the above grounds, on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in confirming the action of Learned Assessing Officer for impugned notices issued under section 148 and 148A(b) dated 30.06.2021, 19.07.2022 and 26.05.2022 respectively & order passed u/s 148A(d) of the act dated 18.07.2022 without jurisdiction which is invalid and bad in law as notice being issued by the JAO and the same was not in accordance with Section 151A of the Act and on the basis of CBDT Notification No. 18 dated 28.03.2022. That objection was raised by the appellant during the case of assessment proceedings, but Ld. AO has not disposed off such objection during the case of assessment proceedings. Therefore, the said notice along with the assessment order passed by the AO is invalid and bad in law. Ground No. 10: Without prejudice to the above grounds, On the facts and circumstances of the case and in law, the learned CIT(A) has erred in confirming the action of Learned Assessing Officer as there is no valid sanction u/s 151 of the Income Tax Act, 1961 has been taken by the Ld. AO before the notices issued u/s 148 dated 30.06.2021 and 19.07.2022. That the appellant has also asked the copy of such approval from Ld. AO during the case of assessment proceedings but no copy was provided by Ld. AO and even Ld. AO has not disposed off such objection during the case of assessment proceedings. Ground No. 11: Without prejudice to the above grounds, On the facts and circumstances of the case and in law, the learned CIT(A) has erred in sustaining the order passed by the Ld. AO as the approval is without recording satisfaction in accordance with the requirements of section 151 of Income Tax Act, 1961 in notices issued u/s 148 dated 30.06.2021 and 19.07.2022 and that the appellant has also asked the copy of such approval from Ld. AO during the case of assessment proceedings but no copy was provided by Ld. AO and even Ld. AO has not disposed off such objection during the case of assessment proceedings. Ground No.12: Without prejudice to above grounds, on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in confirming the action of Learned Assessing Officer for notice issued under section 148 dated 19.07.2022 under the new regime of assessment & re- assessment applicable w.e.f. 01.04.2021 based on CBDT Instruction 01/2022 F.No. 279/Misc/M-51/2022-ITJ dated 11.05.2022 without bringing ITA No.302/RPR/2024 Global Trading Company 4 any corroborative evidences or incrementing material, which is bad in law in the light of provision of section 149(1)(b). Ground No.13: Without prejudice to above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in sustained the addition totaling of Rs. 3,93,08,320/- on disallowance of purchase made of Rs. 56,91,993/-, Rs. 63,79,444/- and Rs. 2,72,36,883/- from M/s Rajendra Ispat, M/s Pratyush Steels and M/s Abhishek Enterprises respectively u/s 69C of the I.T. Act without considering the appellant submission and without providing opportunity of being heard as purchases are aptly supported by purchase bills and the payment of the same has been made through proper banking channel, authenticating that purchases made were genuine. Thus, CIT (A) has erred in sustaining the addition merely on suspicious, surmise and presumption, which is not good in law as well as facts and circumstances of the case. Ground No.14: Without prejudice to the above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in sustaining the addition totaling of Rs. 1,85,83,045/- sales made of Rs. 1,31,37,364/- and Rs. 54,45,681/- to M/s Pratyush Steels and M/s Abhishek Enterprises respectively being the unexplained income u/s 68 of IT Act and charged to tax u/s115BBE of the Act without considering appellant submission and without providing opportunity of being heard as sales are aptly supported by sales bills and the receipts of the same has been received through proper banking channel, authenticating that sales made were genuine. Thus, CIT (A) has erred in sustaining the addition merely on suspicious, surmise and presumption, which is not good in law as well as facts and circumstances of the case. Ground No.15: Without prejudice to the above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in sustaining the addition of Rs. 2,72,36,883 being the unexplained expenditure on account of purchases from M/s Abhishek Enterprises, in the Order passed under section 147 read with section 144B of the Income tax Act, 1961 dated 12.05.2023 instead, the appellant have purchased goods from M/s Abhishek Enterprises amounting to Rs. 2,69,86,883 in the F.Y. 2015-16 which is clearly substantiated from the ledger, confirmation and audited Financial Statement submitted during the course of assessment proceedings. Ground No.16: Without prejudice to the above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in sustaining the addition of Rs. 1,22,62,852/- on account of sales of goods to M/s Abhishek Enterprises & of Rs. 59,54,529/- on account of sales of goods to M/s Pratyush Steels, being the unexplained income, instead the appellant has made sales amounting Rs. 1,31,37,364/- and Rs. 54,45,681/- to M/s Abhishek Enterprises & M/s Pratyush Steels respectively which is clearly substantiated from the ledger, confirmation and audited Financial Statement submitted during the course of assessment proceeding. Thus, CIT (A) has erred in sustaining the additions merely on suspicious, surmise and presumption, which is not good in law as well as facts and circumstances of the case. ITA No.302/RPR/2024 Global Trading Company 5 Ground No.17: Without prejudice to the above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in sustaining the addition of Rs. 46,00,000/- being the unexplained expenditure on account of purchase made from M/s. Deepak Nanjyani, ignoring the fact that the firm has not entered into any transaction with M/s. Deepak Nanjyani during the financial year. Thus, CIT (A) has erred in sustaining the addition merely on suspicious, surmise and presumption, which is not good in law as well as facts and circumstances of the case. Ground No.18: Without prejudice to the above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in upholding the addition of Rs. 6,24,914/- as unexplained expenditure being 1 percent commission paid on Rs. 6,24,91,365/- for taking accommodation of entries. Ground No.19: Without prejudice to the above grounds, The AO / CIT (A) erred in law and facts in relying on certain data, findings of the general investigation in unrelated cases and third party statements. Neither do these materials establish any connection with the case of the Appellant nor was appellant given an opportunity to cross examine those parties/information. Ground No.20: Without prejudice to the above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in upholding the addition made merely on the ground that no response has been received against 133(6). Mere non-response from the alleged parties does not tantamount that transactions is not bonafide and genuine transactions. Thus, the action of the Ld. CIT(A) is bad in law. Ground No. 21: Without prejudice to above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred to understand that the goods purchased were sold to various parties and realization of the quantity sold are credited to the accounts and the quantities of the products are tallied as per the tax audit report and such sales were accepted by the learned AO of Income Tax Department during the course of assessment proceedings then disallowing the amount of purchase is against the principles of natural justice and vice versa. Ground No. 22: The learned CIT(A) has erred in sustaining the order as, the learned AO of the Income Tax Department had not questioned the authenticity of the Audited accounts and the Tax Audit Report done by an Independent Chartered which was put up by the assessee during the assessment proceedings and that the Learned AO has not rejected books of accounts during the assessment proceeding u/s 145(3). Ground No. 23: The learned CIT(A) has erred in sustaining the Demand imposed of Rs. 4,16,78,825/- as Income Tax payable. Further, Demand tax payable has also been computed wrongly by the learned AO and It proves that all assessment proceedings has been done by learned AO in mechanical manner. Thus, CIT (A) has sustained the demand merely on suspicious, surmise and presumption, which is not good in law as well as facts and circumstances of the case. ITA No.302/RPR/2024 Global Trading Company 6 Ground No. 24: The learned CIT(A) has erred on facts and in law by not adjudicating ground of initiation of penalty proceedings u/s 271(1)(c) without any material on record. Ground No. 25: The CIT (A) has sustained the addition merely on suspicious, surmise and presumption, which is not good in law as well as facts and circumstances of the case. Ground No. 26: The order of the Ld. CIT (A) is erroneous and not tenable in law and on facts. Ground No. 27: The appellant craves leave to add, alter or amend any/all of the grounds of appeal before or during the case of the hearing of the appeal. Ground No. 28: The above grounds of appeal are without prejudice to each other.” 3. The brief facts of the case culled out from the order of the Ld. CIT(A) are as under: STATEMENT OF FACTS: 1. The firm is deriving income from the business of trading of Iron and Steels under his partnership firm concern namely M/s Global Trading company. The books of accounts of the firm are duly audited under the provisions of Section 44AB of the Income Tax Act, 1961. 2. Income tax Return for the Assessment year 2016-17 relating to Accounting year 2015-16 uls 135(1) of the Income Tax Act 1961 was fled on 15.10.2016 by the assessee declaring total income of Rs. 4,76,120/- and also fled income of Rs. 4,78,120/- return u/s 148 of the Income Tax Act, 1961 on 02.11.2022. 3. The Learned AO has issued Notice under section 148 which is null and void on various technical grounds like no prior approval of respective authority, reopening of assessment is bad in law, issuing notice without DIN, etc. Hence, at the outset, such proceeding is void ab initio as notice u/s 148 issued by the learned AO is null and void. In spite of that, the assessment proceedings u/s 148 has been initiated and various notices u/s 142(1) was received. Thereafter online reply was submitted, for the various notices issued along with the necessary documents 4. Further, appellant was asked to explain why the sales to the tune of Rs. 1,31,37,364/- to Mis Pratyush Steels, Rs. 54,45,681/- to M/s Abhishek Enterprises totaling to Rs. 1,85,83,045/- and purchase of Rs. 56,91,993/-, Rs. 63,79,444/-, Rs. 2,72,36,883/- and Rs. 46,00,000/- from M/s ITA No.302/RPR/2024 Global Trading Company 7 Rajendra Ispat, M/s Pratyush Steels and M/s Abhishek Enterprises and M/s Deepak Nanjyani totalling to Rs. 4,39,08,320/-, during the period under consideration should not be considered as unaccounted income and unexplained expenditure. Appellant had duly explained with all the supporting documentary evidences including PAN, Address and TIN of alleged bogus parties, bills issued by the alleged bogus parties, confirmation of account and bank statement through which payments were made to parties, VAT Return and reconciliation are placed to prove Genuineness, Credibility & Viability of the transactions done. The Learned A.O. has neither accepted the documents/evidences provided the Appellant nor provided any material evidences to prove the contrary against the firm. by 5. Further, the firm has not entered any transaction with M/ s. Deepak Nanjyani amounting to Rs. 46,00,000/-. Further, the firm does not know how the Department came across the information of M/s. Deepak Nanjyani in connection with them as the firm does not have any transaction of whatsoever nature with M/s. Deepak Nanjyani. We have place the same fact to the Learned AO but the Learned AD has not considered the same and made addition of Rs. 46,00.000 6. Appellant transaction is unfeigned and the same has been done through banking channels. In computing the Other income of the Appellant the Learned AD has made addition to the tune of Rupees 6.31. 16.279 to the Return Income Before making such addition the main material very heavily relied upon by A.O., is the statement recorded of Shri Gitesh Aggrawal and Rajender kumar chawhan at Appellant back without allowing the opportunity to them to cross examine them at the time of recording of statement 7. Further, the him is subject to the Audit under Partnership Act taws, conducted by Mis Santosh Kumar Jain and Co., Address Civil Lines, Raipur (CG) an independent Chartered Accountants and he verified and tallied the quantity of the goods purchased and sold by the firm during the year under Appeal and the accounts and books and sales were also accepted by the learned A O. of the Income Tax Department. 2. Inspite of all the explanations and detailed submissions, the learned AD without considering the facts and documents produced had passed assessment order uls 147 read with section 144 of the Income tax Act making addition of Rs. 1,85,83,045/-is contended as of Fictitious sales and treated as undisclosed and unexplained income and is added to total income u/s 68 of IT Act under the provision of section 115BBE of the IT Act and entries totalling to Rs. 4,39,08,320/- in the form of Fictitious purchases and treated as undisclosed and unexplained expenditure and is added to the total income uls 69C under the provision of section 1158BE of the IT Act. Further, the amount of Rs. 6.24.914/- as commission being 1 percent of Rs. 6,24,91,365/-Is treated as unexplained expenditure and added to the income which is purely on presumptive basis which are not warranted and not in the spirit of law as well as in the facts and circumstances of the case 9. Hence appellant has file the appeal against the said addition as addition made by the Learned AO is purely on presumption, surmise and conjecture ITA No.302/RPR/2024 Global Trading Company 8 and bad in law. All these additions/ disallowances, forming part of the Grounds of Appeal (given below) are subject matter for judicious consideration and decision. Against this action of the learned AO, appeal has been fled before your Honor. ” 4. The order u/s 147 of the Act dated 12.05.2023 passed by the Ld. AO after making certain additions u/s 68 of the Act against bogus sales, u/s 69C of the Act against bogus purchase and commission paid to procure accommodation entries. Aggrieved by the such additions, the assessee preferred an appeal before the Ld. CIT(A), however, the appeal therein had decided against the assessee. 5. Dissatisfied with the order of the Ld. CIT(A), the assessee preferred an appeal before the ITAT, which is under consideration in the present case. 6. At the outset, Shri Rahul Bardia, CA, learned Authorized Representative (in short, Ld. AR) for the assessee assailed the validity of jurisdiction assumed by the Ld. AO in framing the impugned assessment u/s 147 r.w.s. 144B of the Act, dated 12.05.2023. It was the submission that the approval u/s 151 of the Act was wrongly obtained by the AO from the Ld. Principal Commissioner of Income Tax-1, Raipur (PCIT), which is according to mandate of law was to be obtained from the Chief Commissioner of Income Tax, Raipur. On this issue, the Ld. AR place reliance on the following case laws: “(1) Hexaware Technologies Ltd Vs ACIT & Ors. Reported in 8 NYPCTR 575 (2) Siemens Financial Services (P) Ltd Vs DCIT, reported in 334 CTR (Bom) 825 ITA No.302/RPR/2024 Global Trading Company 9 (3) Panabyte Technologies Ltd Vs DCIT & Ors reported in 8 NPYCTR 412 (Bom) (4) Twylight Infrastructure (P) Ltd Vs ITO reported in 336 CTR (Del) 800 (5) Goldiam International Ltd Vs DCIT reported in 38 NYPTTJ 411 (6) DCW Ltd Vs ACIT & Ors reported in 457 ITR 632 (Bom) (7) J.M. Financial & Investment Consultancy Services (P) Ltd Vs ACIT reported in 327 CTR (Bom) 458 (8) MA Multi-Infra Development (P) Ltd Vs ACIT reported in 451 ITR 181 (9) Harsha Rice Mills (P) Ltd Vs ITO reported in 37 NYPTTJ 499 (Raipur) (10) Krishna Industries Vs ITO reported in 37 NYPTTJ 138 (Raipur) (11) Shanti Parboiling Industries VS ACIT Circle 2(1), Raipur passed in ITA No. 99/RPR/2021.” 7. Ld. AR also furnished before us a written submission, the same is extracted as under for the sake of clarity of complete facts: “Ground No.4: On the facts and circumstances of the case and in law, the Learned CIT(A) has erred in passing the ex-parte order, without granting sufficient opportunity of being heard to the appellant even after requesting for adjournment before the hearing date due to the medical contingencies. That the Ld CIT (A) has erred in upholding the addition without considering the submission on merits as well as on technical grounds. Non- Grant of adjournment which is out of genuine reasons is against the principle of natural justice. The assessee filed appeal against the assessment order on 10.06.2023. The Id CIT (A) issued notice for hearing on 15.03.2024 and 15.04.2024. Thereafter the Ld CIT appeals issued final hearing on 18.04.2024 fixing the date of hearing on 25.04.2024. The counsel of the assessee requested for adjournment on 22.04.2024. There was medical emergency at the house of counsel and therefore request was for made to kindly grant the adjournment till 15.05.2024. The CIT (A) rejected the adjournment application and issued the appeal order on 29.04.2024. Your honour the counsel of the assessee could not prepare the reply during March end and April start due to pressure of year end matters and bank audits. However, due to medical emergency at the house of counsel, request was made only for extension of 15 days. This was denied. The time span was only from 15.03.2024 to 29.04.2024. This is only 44 days' time with two notices received. It is therefore requested that the case be decided ITA No.302/RPR/2024 Global Trading Company 10 on the basis of material already filed with the Id AO instead of ex-parte order. Ground No.5 Without prejudice to above grounds, the learned CIT(A) erred in confirming the action of Learned Assessing Officer without appreciating the fact that notice issued for A.Y. 2016-17 dated 30.06.2021 not being the subject matter before the Hon'ble Apex Court, these notices cannot be deemed to be issued u/s.148A(b) of the Act and Taxation and Other Laws (Relaxation and Amendment of certain provisions) Act, 2020 [TOLA] was not applicable for assessment Year 2016-17 and therefore, there is no question of Revenue relying on TOLA to justify the impugned notice under Section 148 of the Act as being within the period of limitation. The notice issued for A.Y. 2016-17 dated 30.06.2021 is bad in law and void ab initio as the impugned notice is barred by limitation. It is settled principle that only those notices which were expiring on or before 31.3.2020 / 31.03.2021 were extended under the TOLA. In the present case, the assessment year involved is AY 2016-17. The period of six years from end of assessment year of AY 2016-17 expires on or before 31.03.2023. Thus, the notice issued u/s 148 on 30.06.2021 cannot be extended and covered u/s 148A(b) on the basis of supreme court judgement in the case of UOI Vs Ashish Agrawal 326 CTR 473(SC). In the present case the Ld AO issued notice u/s 148A(b) on 26.05.2022 and issued order u/s 148A(d) on 18.07.2022. These were done in compliance to decision of UOI Vs Ashish Agrawal 326 CTR 473(SC). These were issued on or before 31.03.2023 however fresh notice was required to be issued following the due process as mandated for 148A/ 148. The notice u/s 148A(b)/ 148A(d) and consequential notice u/s 148 dt 19.07.2022 is bad in law as was done as per UOI Vs Ashish Agrawal 326 CTR 473(SC), which was not applicable in the present case. 148A. Conducting inquiry, providing opportunity before issue of notice under section 148.-The Assessing Officer shall, before issuing any notice under section 148, - (a) conduct any enquiry, if required, with the prior approval of specified authority, with respect to the information which suggests that the income chargeable to tax has escaped assessment; (b) provide an opportunity of being heard to the assessee, by serving upon him a notice to show cause within such time, as may be specified in the notice, being not less than seven days and but not exceeding thirty days from the date on which such notice is issued, or such time, as may be extended by him on the basis of an application in this behalf, as to why a notice under section 148 should not be issued on the basis of information which suggests that income chargeable to tax has escaped assessment in his case for the relevant assessment year and results of enquiry conducted, if any, as per clause (a); (c) consider the reply of assessee furnished, if any, in response to the show- cause notice referred to in clause (b); ITA No.302/RPR/2024 Global Trading Company 11 (d) decide, on the basis of material available on record including reply of the assessee, whether or not it is a fit case to issue a notice under section 148, by passing an order, with the prior approval of specified authority, within one month from the end of the month in which the reply referred to in clause (c) is received by him, or where no such reply is furnished, within one month from the end of the month in which time or extended time allowed to furnish a reply as per clause (b) expires: In the present case the Ld AO, must have issued fresh notice u/s 148A and then u/s 148. Conversion of notice u/s 148 dated 30.06.2021 to notice u/s 148A(b) dated 26.05.2022 as per UOI VS Ashish Agrawal 326 CTR 473(SC) is not allowed for AY 2016-17. Therefore, the issue of notice u/s 148 dated 19.07.2022 deserves to be quashed. Assessee relies upon:- (a) Siemens Financial Services (P) Ltd Vs Deputy Commissioner of IT & Others (High Court of Bombay) 334 CTR 825. (b) HEXAWARE TECHNOLOGIES LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS. HIGH COURT OF BOMBAY Source (2024) 8 NYPCTR 575 (Bom) Ground No.6 Without prejudice to above grounds, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the action of Learned Assessing Officer for the primary impugned notice issued u/s 148 of the Act dated 30.06.2021, without quoting the mandatory Documentation identification Number (\"DIN\") on the body of the said directions, in contravention of the CBDT Circular No. 19/2019 dated August 14, 2019 and is therefore, invalid and shall be deemed to have never been issued. The Ld. AO has not disposed off the ground raised properly. Thus, making the entire assessment process non-est and invalid. Assessee invites your kind attention to Page No 101 to 103, of the paper book. The original notice u/s 148 dated 30.06.2021 is issued without DIN. The Ld AO issued DIN on 03.07.2021 vide DIN: ITBA/AST/S/91/2021- 22/1033979596(1). The Ld AO made error in not mentioning the fact on the body of notice u/s 148 dated 30.06.2021, that the present notice issued without DIN after taking prior permission from the specified authority as per CBDT Circular No. 19/2019 dated 14.08.2019. It is a mandatory requirement. Further the case of ld AO should fall under the exception as per CBDT Circular No. 19/2019. The Ld AO did not comply with the mandatory requirement. The assessee on has raised objection before the Ld AO in response to notice u/s 148A(b) and also during assessment proceeding. However, Ld AO rejected it and CIT (A) supported the decision of Ld AO. The assessee relies upon the recent judgments in the case of:- ITA No.302/RPR/2024 Global Trading Company 12 SHREEJI BIHARIJI COLONISERS & BUILDERS (P) LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX* ITAT, AMRITSAR BENCH ITA No. 48 & 49/Asr/2023; Asst. yrs. 2018-19 & 2019- 20 Date of Decision 22nd July, 2024 Search and seizure-Assessment under s. 153C-Validity-Vis-à-vis approval granted under s. 153D-Admittedly, the Addl. CIT did not mention DIN, on the letter of approval granted under s. 153D, a mandatory requirement as per cls. 2 and 4 of the CBDT Circular No. 19 of 2019, dt. 14th Aug., 2019- Therefore, the approval granted under s. 153D by the Addi. CIT to the draft assessment order is without issuance of DIN and such a approval under s. 153D which is the fulcrum for passing final assessment order dt. 18th June, 2021 in question is thus apparently non-est in law, in the absence of DIN, allocated to such communication at all-Accordingly, the final assessment order so passed under s. 153C in question on the basis of such invalid and non-est approval under s. 153D is thus without sanction of law and void ab initio-Thus, the issue of non-maintaining of DIN on the body of the statutory order is a defect which is not even curable under s. 292B because in the absence of DIN on the body of the order, the said order is deemed to never been issued-In the entirety of facts and circumstances of the case, that the impugned order passed under s. 153C r/w 143(3) cannot be upheld and deserve to be set aside as the same has been passed in violation of CBDT Circular No. 19 of 2019 r/w CBDT and Circular No. 27 of 2019 and the same is treated as non-est in eyes of law-Finesse International Design (P) Ltd. vs. Dy. CIT (2024) 234 DTR (Del) (Trib) 12: (2024) 227 TTJ (Del) 501 and SPS Structures Ltd. vs. Dy. CIT (2024) 227 TTJ (Chd) 771 followed. HEXAWARE TECHNOLOGIES LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS. HIGH COURT OF BOMBAY Source (2024) 8 NYPCTR 575 (Bom) Reassessment-Notice under s. 148-Validity vis-a-vis absence of DIN-In the notice dt. 27th Aug., 2022 impugned in the petition, admittedly there is no DIN mentioned-Letter of the AO cannot validate the notice issued under s. 148 on 27th Aug., 2022-If DIN is not mentioned in the letter/notice/order, the reason for not mentioning the DIN and the approval from specified authority for issuing such letter/notice/order without DIN has to be obtained and mentioned in such letter/notice/order- In the present case, in the impugned notice dt. 27th Aug., 2022, no such reference is there-Therefore, the impugned notice is clearly invalid and bad in law. Ground No.7 Without prejudice to above grounds, on the facts and in the circumstances of the case and in law, the Ld. CIT(A) has erred in confirming the action of Learned Assessing Officer for the impugned notice dated 19.07.2022 issued under Section 148 of the Act is barred by limitation as per the first proviso to Section 149 of the Act. Therefore, the said notice along with the assessment order passed by the AO is invalid and bad in law. ITA No.302/RPR/2024 Global Trading Company 13 Kind attention is invited to last para of the page 87. The Ld AO is under the presumption that section 149(1)(a) is applicable. In actual the period of three years from the end of assessment year 2016-17 has expired on 31.03.2020 therefore the provision of section 149(1)(b) is applicable. This itself shows that the Ld AO re- opened the case under wrong presumption of facts of the case. The notice u/s 148 is issued on 19.02.2022, however it is issued without following the process as prescribed u/s 148A(a), 148A(d) approval and 151(ii). Ground No.8 Without prejudice to above grounds, on the facts and in the circumstances of the case and in law, the learned CIT(A) has erred in upholding the action of Learned Assessing officer for the impugned notice issued u/s 148 dated 19.07.2022 without quoting the mandatory Documentation identification Number (DIN) on the body of the said directions, in contravention of the CBDT circular 19/2019 No. dated August 14, 2019 and is therefore, invalid and shall be deemed to have never been issued. The Ld. Ao has not disposed off the ground raised properly' Thus, making the entire assessment process non-est and invalid. Assessee invites your kind attention to Page No 70 to 72 and 102 to 103 of the paper book. The notice u/s 148 dated 19.07.2022 is issued without DIN. A separate letter intimating the DIN on the same date i.e. 19.07.2022 is issued. However as per CBDT circular 19/2019 whenever a notice is issued without Mandatory DIN, then the fact of this must be mentioned in the body of the notice and details of approval taken from the specified authority must also be mentioned. Then the Ld AO can issue DIN within 15 days of the upload of notice and upload in the system. In the present case of the assessee, no such mandatory requirement of writing the fact of issue of notice without DIN is followed. Thus, the notice issued dated 19.07.2022 is null and void in terms of para 4 of the CBDT circular 19/2019. Assessee relies upon HEXAWARE TECHNOLOGIES LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS (Bombay High Court). Ground No.9 Without prejudice to the above grounds, on the facts; and in the circumstances of the case and in law, the Learned CIT(A) has erred in confirming the action of Learned Assessing officer for impugned notices issued under section 148 and 148A(b) dated 30.06.2021, 19.07.2022 and 26.05.2022 respectively & order passed u/s 148A(d) of the act dated 18.07.2022 without jurisdiction which is invalid and bad in law as notice being issued by the JAO and the same was not in accordance with Section 151A of the Act and on the basis of CBDT Notification No 18 dated 28.03.2022 That objection was raised by the appellant during the case of assessment proceedings, but Ld. AO has not disposed of such objection during the case of assessment proceedings. Therefore, the said notice along with the assessment order passed by the AO is invalid and bad in law. Attention is invited to the Page No. 70 to 72 of the paper book, which is a notice u/s 148 dated 19.07.2022 issued by JAO against the circular No. 18 dated 28.03.2022. Copy of the circular is placed at Page No 349 of the ITA No.302/RPR/2024 Global Trading Company 14 paper book. The notice issued is against the requirement of section 151A. Therefore the notice issued u/s 148 dated 19.07.2022 deserves to be quashed. The assessee relies upon:- HEXAWARE TECHNOLOGIES LTD. vs. ASSISTANT COMMISSIONER OF INCOME TAX & ORS. HIGH COURT OF BOMBAY Source (2024) 8 NYPCTR 575 (Bom) Reassessment-Notice under s. 148-Validity vis-a-vis notice issued by jurisdictional AO and not as per s. 151A-Impugned notice dt. 27th Aug., 2022 has been issued by respondent No. 1 (JAO) and not by the NFAC, which is not in accordance with the Scheme prescribed by CBDT as per s. 151A-Guidelines dt. 1st Aug., 2022 are internal guidelines as is clear from the endorsement on the first page of the guideline-\"Confidential for departmental circulation only\"-Said guidelines are not issued under s. 119- Any such guideline issued by the CBDT is not binding on petitioner-Further the said guideline is also not binding on respondent No. 1 as they are contrary to the provisions of the Act and the Scheme framed under s. 151A- Further, there is no question of concurrent jurisdiction of the JAO and the FAO for issuance of notice under s. 148 or even for passing assessment or reassessment order-Arguments advanced by the Revenue on the Office Memorandum dt. 20th Feb., 2023 is clearly contrary to the provisions of the Act as well as the Scheme dt. 29th March, 2022. JASJIT SINGH vs. UNION OF INDIA & ORS. HIGH COURT OF PUNJAB & HARYANA Date of Decision 29th July, 2024 Source (2024) 8 NYPCTR 939 (P&H) Reassessment-Notice under s. 148-Validity vis-a-vis notice issued by jurisdictional AO and not as per s. 151A-Central Government in terms of powers conferred under s. 151A, had introduced the e-assessment of Income Escaping Assessments Scheme 2022, which as per s. 3 mandated assessment, re- assessment and re-computation under s. 147 and issuance of notice under s. 148 through automatic allocation-Amended provisions of s. 144B now does not refer to notice under s. 148 and only deals with the manner in which the assessment by the National Faceless Assessment Centre is to be done Power of transfer to the JAO is although available but it has to be exercised only in a particular case considering the facts and circumstances therein and not by way of general order as passed vide letter dt. 19th Jan., 2024-Such circular or instructions by the Board could not have been issued to override statutory provisions or to make them otiose or obsolete-In view of the aforesaid discussion, there is no occasion to distinguish or take a different view as suggested by the counsel for the Revenue from what has already been held by the Co-ordinate Bench- Notices issued by the JAO under s. 148 and the and connected cases. proceedings initiated thereafter without conducting the faceless assessment as envisaged under s. 1448 are liable to be quashed. KANKANALA RAVINDRA REDDY & ORS. vs. INCOME TAX OFFICER & ORS. ITA No.302/RPR/2024 Global Trading Company 15 HIGH COURT OF TELANGANA Date of decision 14th September, 2023 Source: (2023) 334 CTR (Telangana) 646. Reassessment-Notice under s. 148A-Validity vis-a-vis notice by jurisdictional AO and not in faceless manner as per s. 144B r/ws. 151A-A plain reading of the two notifications issued by the CBDT dt. 28th March, 2022 and 29th March, 2022, would clearly indicate that the CBDT was very clear in its mind when it framed the two schemes with respect to the proceedings to be drawn under s. 148A, that is to have it in a faceless manner-From the factual matrix, firstly the statutory provisions of ss. 144B and 151A and secondly, the subsequent direction given by the Supreme Court in the case of Union of India & Ors. vs. Ashish Agarwal (2022) 326 CTR (SC) 473: (2022) 213 DTR (SC) 217 what is clearly reflected is the fact that the Supreme Court has only permitted the Union of India to proceed further with the reassessment proceedings under the amended provision of law, more particularly, as amended by the Finance Act, 2021-In the present case, both the proceedings ie., the impugned proceedings under s. 148A, as well as the consequential notices under s. 148 were issued by the local jurisdictional officer and not in the prescribed faceless manner- Order under s. 148A(d) and the notices under s. 148 are issued on 29th April, 2022, i.e., after the \"Faceless Jurisdiction of the IT Authorities Scheme, 2022 and the \"e-Assessment of Income Escaping Assessment Scheme, 2022\" were introduced-Impugned notices issued by local jurisdiction AO and the proceedings drawn by the Department is neither tenable, nor sustainable-All the impugned orders getting quashed, the consequential orders passed by the Department pursuant to the notices issued under ss. 147 and 148 would also get quashed. Ground No. 10 Without prejudice to the above grounds, On the facts and circumstances of the case and in law, the learned CIT(A) has erred in confirming the action of Learned Assessing Officer as there is no valid sanction u/s 151 of the Income Tax Act, 1961 has been taken by the Ld. AO before the notices issued u/s 148 dated 30.06.2021 and 19.07.2022. That the appellant has also asked the copy of such approval from Ld. AO during the case of assessment proceedings but no copy was provided by Ld AO and even Ld. AO has during not disposed off such objection the case of assessment proceedings. Assessee invites your kind attention to Page No 70 to 72 of the paper book. The Ld AO has not given copy of the sanction letter u/s 151 inspite of repeated request. From the last line of the page No 90 of the paper book, it is apparent that the approval is taken from Pr-CIT-1, Raipur. The present case of assessee is covered u/s 149(1)(b) and therefore the specified authority as per section 151 (ii) must approve the order u/s 148A(d) or issue of notice u/s 148. However, in the present case, this has not been done. The case of the assessee is squarely covered by the following decisions: - (c) Siemens Financial Services (P) Ltd Vs Deputy Commissioner of IT & Others (High Court of Bombay) 334 CTR 825. ITA No.302/RPR/2024 Global Trading Company 16 (d)Panabyte Technologies Ltd Vs DCIT & Others (High Court of Bombay) 8 NYPCTR 412. (e) Twylight Infrastructure (p) Ltd Vs ITO & Ors (High Court of Delhi) 336 CTR 800. (f) Goldiam International Ltd Vs DCIT 38 NYPTTJ 411. (g) DCW Ltd Vs ACIT & Ors (High Court of Bombay) 457 ITR 632. (h)J.M. Financial & Investment Consultancy services (P) Ltd Vs ACIT & Ors (High Court of Bombay) 327 CTR 458. (i) MA Multi-Infra Development (P) Ltd Vs ACIT (High Court of Bombay) 451 ITR 181 (Bom). Ground No.12 Without prejudice to above grounds, on the facts and in the circumstances of the case and in law, the learned CIT (A) has erred in confirming the action of Learned Assessing officer for notice issued under section 148 dated 19.07.2022 under the new regime of assessment & re-assessment applicable w.c.f. 01.04.2021 based on CBDT Instruction 01/2022 F. No. 279 Misc/M-51/2022-ITJ dated 11.05.2022 without bringing any corroborative evidences or incrementing material, which is bad in law in the right of provision of section 149(1)(b). The condition to cover the case u/s 149(1)(b) are:- i) AO is in the possessions of books of accounts or other conclusive documents or evidence, which establishes the income chargeable to tax. ii) Escapement of income in the form of asset. iii) Escapement of income likely to be 50 Lakhs or more. In the present case, the Id AO is only relying upon the statement recorded of Shri Abhishek Agrawal, Shri Gitesh Agrawal and Shri Rajendra Kumar Chawhan. There is no other material or books of accounts or document or conclusive material with the Ld AO. It is also settled principle that the statement recorded during survey has no evidentiary value [CIT Vs Khader Khan Son (2012) 82 CCH 0357). The opportunity to cross examine any of the above stated persons were not allowed inspite of repeated written request. Most interesting part of the statement relied upon the department is that name of the assessee concern is not taken by any of the above person. In addition, the assessee submits that the proposed escaped income as per notice u/s 148A(b) is not presented in form of asset as per required of section 149(1)(b). If we apply the gross profit rate [2.65%) of assessee for AY 2016-17 to the alleged accommodation entry of purchase of Rs 39308300/-, then the alleged escapement of income shall be below Rs 50,00,000/-. Ground No.13 ITA No.302/RPR/2024 Global Trading Company 17 Without prejudice to above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in sustained the addition totalling of Rs. 3,93,08,320/- on disallowance of purchase made of Rs. 56,91,993/-, Rs. 63,79,444/- and Rs.2,72,36,883-frorn M/s Rajendra Ispat, M/s Pratyush steels and M/s Abhishek Enterprises respectively u/s 69C of the 1.T. Act and charged to tax u/s 115BBE of the Act being the unexplained expenditure without considering the appellant submission and without providing opportunity of being heard as purchases are aptly supported by purchase bills and the payment of the same has been made through proper banking channel, authenticating that purchases made were genuine. Thus, CIT (A) has erred in sustaining the addition merely on suspicious, surmise and presumption, which is not good in law as well as facts and circumstances of the case. The assessee submitted following papers before the Ld AO during the stage of assessment: - A] Copy of ledger of M/s Rajendra Ispat, M/s Pratyush Steel and Abhishek Enterprises | Refer Page No. 245 to 249] B] Copy of bills of Rajendra Ispat [refer page 325 to 336] C) Copy of Bills of Pratyush Steel [Refer page 311 to 324] D] Copy of Bills of Abhishek Enterprises [Refer page 296 to 310] E] Stock records of assessee [refer page 187] F] Copy of VAT return of assessee [refer page 342 to 346] G] Confirmation of accounts of above parties [page No. 337 to 341] H] Copies of bills issued by assessee [Refer page No. 262 to 295] I) Audit report for AY 2016-17 [Refer Page No. 156 to 196] J] Bank statements evidencing payments [Refer page 197 to 244] Transaction for purchases done from above three parties are fully supported by vouchers and declared in VAT returns filed. Sales is not doubted. Books of accounts is accepted. There cannot be sales without purchases. Therefore, purchase must also be accepted. In addition to the above, the Ld AO also erred in invoking the provision of section 115BBE by making addition u/s 69C. These are business transactions which are fully recorded in the books of accounts. Therefore, the invocation of provision section 690 rws section 115BBE is wrong. Without prejudice to the submissions made above, it is also submitted that when the sales is not doubted and books of accounts is accepted than only profit element should be accepted. The assessee relies upon the following:- ITA No.302/RPR/2024 Global Trading Company 18 SHIV TRADING CO. vs. INCOME TAX OFFICER ITAT, RAIPUR 'SMC' BENCH Date of Decision 4th July, 2023 Source (2023) 37 NYPTTJ 964 (Raipur). Income from undisclosed sources-Addition under s. 69C- Alleged bogus purchase-Assessee had admittedly failed to substantiate the authenticity of the purchases aggregating to Rs. 26.88 lacs that were claimed to have been made from KA-On the contrary, a perusal of the assessment order reveals that NS i.e. proprietor of the aforesaid concern had admitted in his statement of having provided bogus purchase bills through his aforesaid concern-As the assessee had failed to substantiate the authenticity of its claim of having made genuine purchases from the aforementioned concern, therefore, no infirmity in the orders of the lower authorities who had rightly held the same as bogus purchases-Fact that the AO had neither rejected the books of account of the assessee firm nor dislodged the sales accounted for by the assessee firm in its regular books of account-Considering the totality of the facts the assessee firm had procured the goods in question not from the aforementioned party but had purchased the same at a discounted rate from the open/grey market and had routed the said transaction through its books of account on the basis of bogus purchase bills procured from the aforementioned bogus concern-Addition restricted to the as regards the bogus/unproved purchases to the extent of bringing the GP rate of such purchases at the same rate of other genuine purchases-Principal CIT vs. Mohhomad Haji Adam & Co. [ITA No. 1004 of 2016, dt. 11th Feb., 2019 (Bom)(HC)] followed. HARSHA RICE MILLS (P) LTD. vs. INCOME TAX OFFICER* ITAT, RAIPUR BENCH Source (2023) 37 NYPTTJ 499 (Raipur) Income-Addition-On account alleged bogus purchase- Assessee-company had failed to substantiate the veracity of its claim of having made genuine purchases from the mentioned parties in question-Findings lower authorities that the assessee would have procured the goods from the open/grey market at a discounted value as against that booked by him on the basis of bogus bills in its books of accounts is accepted-As per order of the AO it is found that AO had not given any cogent reason for working out the disallowance @ 25 per cent of the value of the impugned bogus/unsubstantiated purchases-Also, the manner in which the CIT(A) had scaled down the disallowance to 3.29 per cent is not found impressive- Admittedly the addition in the hands of the assessee is liable to be restricted only to the extent of the profit which the assessee would have made by procuring the goods at a discounted value from the open/grey market as against the inflated value at which the same were booked on the basis of the bogus bills in its books of account-Issue of quantification of profit which the assessee would have made by procuring the goods in question from the open/grey market is concerned-Addition in the hands of the assessee as regards the bogus/unproved purchases was to be made to the extent of bringing the G.P rate of such purchases at the same rate of other genuine purchases-Profit made by the assessee in the case by procuring the goods at a discounted value from the open/grey market can safely be determined ITA No.302/RPR/2024 Global Trading Company 19 by bringing the G.P. rate of such bogus purchases at the same rate as that of the other genuine purchases-Hence, the AO is directed to restrict the addition to the hands of the assessee qua the impugned bogus/unverified purchases by bringing the GP rate of such bogus purchases at the same rate as that of the other genuine purchases-Principal CIT vs. Mohhomad Haji Adam & Co. (IT Appeal No. 1004 of 2016, dt. 11th Feb., 2019) followed. KRISHNA INDUSTRIES vs. INCOME TAX OFFICER ITAT, RAIPUR 'SMC' BENCH Source (2023) 37 NYPTTJ 138 (Raipur) Income-Addition-Bogus purchase/unverified purchase- Assessee failed to prove genuine purchase-AO has rightly treated purchase in question from parties as bogus-Also, as the assessee had failed to corroborate his claim of having made genuine purchases from the aforementioned parties, therefore, no infirmity does emerge from the rejection of its books of accounts by the AO under s. 145(3)-AO after rejecting the books of accounts of the assessee firm under s. 145(3) had justifiably on an estimate basis disallowed 25 per cent of the value of the impugned purchases in order to bring the same at par with the value at which the same would have actually been procured by him-However, the profit made by the assessee in the case by procuring the goods at a discounted value from the open/grey market can safely be determined by bringing the G.P. rate of such bogus purchases at the same rate as that of the other genuine purchases-In terms of said observation matter restored to the file of the AO, with a direction to restrict the addition in the of the hands of the assessee as regards the impugned bogus/unverified purchases of Rs. 80.23 lacs (supra) by bringing the G.P. rate of such bogus purchases at the same rate as that of the other genuine purchases. Ground No.14 Without prejudice to the above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in sustaining the addition totalling of Rs. 1,85,83,045/- sales made of Rs. 1,31,37,364/- and Rs. 54,45,681/- to M/s Pratyush Steels and M/s Abhishek Enterprises respectively being the unexplained income u/s 68 of IT Act and charged to tax u/s115BBE of the Act without considering appellant submission and without providing opportunity of being heard as sales are aptly supported by sales bills and the receipts of the same has been received through proper banking channel, authenticating that sales made were genuine. Thus, CIT (A) has erred in sustaining the addition merely on suspicious, surmise and presumption, which is not good in law as well as facts and circumstances of the case. The Id AO failed to understand the nature of sales made by the assessee to M/s Pratyush Steels to Rs 1,31,37,364/- and M/s Abhishek Enterprises for Rs 54,45,681/. The transaction was tripartite action in which sales were made to M/s Pratyush Steels and Abhishek Enterprises and goods were sent to M/s Bajrang Power and Ispat Ltd, Copies of bills issued and transportation details are available. Sales are duly recorded and supported by evidences. Transactions are through banking channel. ITA No.302/RPR/2024 Global Trading Company 20 The department is relying upon statements of parties on whom survey u/s 133A was conducted. The Ld AO did not provide opportunity to cross examine inspite of repeated written request. Assessee replies upon ANDAMAN TIMBER INDUSTRIES vs. COMMISSIONER OF CENTRAL EXCISE SUPREME COURT OF INDIA Source (2015) 281 CTR (SC) 241 Assessment-Natural justice-Denial of opportunity to cross- examine witnesses-Order of the adjudicating authority was based upon the statements of two witnesses-When the assessee disputed the correctness of the said statements and wanted to cross-examine them, the adjudicating authority did not grant this opportunity to the assessee-Denial of opportunity to the assessee to cross-examine the witnesses whose statements were made the sole basis of the impugned order is a serious flaw rendering the order a nullity in as much as it amounted to violation of principles of natural justice whereby the assessee was adversely affected-As far as the Tribunal is concerned, it has simply stated that cross- examination of the said dealers could not have brought our any material which would not be in the possession of the assessee itself to explain as to why it ex-factory prices remain static-It was not for the Tribunal to make guess as to for what purposes the assessee wanted to cross-examine those dealers and what extraction the assessee wanted from them-If the testimony of these two witnesses is discredited, there is no material with the Department on the basis of which it could justify its action as the statement of the aforesaid two witnesses was the only basis of issuing the show-cause notice-Impugned order as passed by the Tribunal is set aside Ground No.17 Without prejudice to the above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in sustaining the addition of Rs. 45,00,000/- being the unexplained expenditure on account of purchase made from M/s. Deepak Nanjyani, ignoring the fact, that the firm has not entered into any transaction with M/s. Deepak Nanjyani during the financial year. Thus, CIT (A) has erred in sustaining the addition merely on suspicious, surmise and presumption, which is not good in law as well as facts and circumstances of the case. Kindly refer page No..... of paper book. It is specifically mentioned that the assessee has not entered into any transaction with M/s Deepak Nanjyani. The assessee requested to share the details of transaction on the basis of which the allegation is made on the assessee. The Ld AO rejected the request and simply on the basis of information received has made addition. Conclusions based on suspicion cannot take the place of proof: SC relied on Umacharan Shaw & Bros v. CIT: (1959) 37 ITR 271 [SC). Ground No.18 Without prejudice to the above grounds, on the facts and in the circumstances of the case as well as in law, the learned CIT (A) has erred in ITA No.302/RPR/2024 Global Trading Company 21 upholding the addition of Rs. 6,24,914/- as unexplained expenditure being 1 percent commission paid on Rs. 6,24,91,365- for taking accommodation of entries. There is no evidence with the Ld AO. The addition is simply made on the basis of assumption and surmises. The assessee has submitted all evidence in support of transaction done. In addition to this the Ld AO did not confront any statement or material gathered and used against the assessee. It is therefore requested that the addition of Rs 6,24,914/- must be deleted. Conclusions based on suspicion cannot take the place of proof: SC relied on Umacharan Shaw & Bros v. CIT: (1959) 37 ITR 271 (SC).” 8. Based on the aforesaid submissions, it was the prayer that the order of Ld. CIT(A) was not justified and therefore, the same is liable to be set aside. 9. Shri S.L. Anuragi, learned CIT-DR representing the department has strongly supported the orders of the Ld. Lower Authorities. 10. We have considered the rival submissions, perused the material available on record and case laws relied upon. At the outset, on perusal of the grounds of appeal of the assessee it is noticed that the core grievance assailed was that the assessee was not afforded with sufficient opportunity of being heard before the First Appellate Authority. It was the submission that in the course of appellate proceedings before the Ld. CIT(A), a notice dated 18.04.2024 was communicated, fixing the date of hearing on 25.04.2024, in response, assessee seeking further time on the ground of medical emergency at the house of counsel has made a request through online portal on 22.04.2024 to grant adjournment till 15.05.2024 (copy placed at page 27 of the APB), however, the request of the assessee was rejected and the appellate order passed on 29.04.2024, without considering the ITA No.302/RPR/2024 Global Trading Company 22 submissions and explanations with the assessee was willing to furnish. In present appeal the assessee has assailed various legal ground including the validity of approval u/s 151, for which as per ground no. 10 of the present appeal, it was the allegation that the order of Ld. CIT(A) is suffering with the error in confirming the action of Ld. AO, as there is no valid sanction u/s 151 of the I. T. Act, 1961. Though, the assessee had raised various legal grounds before the First Appellate Authority but was not appeared before him or have not furnished requisite submissions/ explanations, dehors such details Ld. CIT(A) had passed the order on exparte basis stating that, the appellant-assessee has failed to provide any documentary evidence in support of its claim. Its seems that the assessee is not willing to cooperate with the appellate authority by not providing any submissions or documentary evidence. Ld. CIT(A) also, reproduced the letter of opportunity provided to the assessee dated 18.04.2024, requesting the assessee to furnish its rebuttal against the assessment order along with documentary evidence inter alia grounds of appeal / statement of facts, paper book etc. by / before 25.04.2024. We noticed that in the order of Ld. CIT(A) there is no whisper about the assessee’s request for adjournment dated 22.04.2024. It seems that the request of assessee has left attention of the Ld. CIT(A), whereas the same was available on the Income Tax Portal. Copy of adjournment request of the assessee dated 22.04.2024 is reproduced for the sake of clarity: ITA No.302/RPR/2024 Global Trading Company 23 11. In view of aforesaid facts, we find that the observation of Ld. CIT(A) that the assessee is wilfully and consciously avoiding furnishing of the reply is misconstrued, as the request of assessee with the plea of medical emergency was not taken into cognizance by the First Appellate Authority. Under such circumstances, the action of Ld. CIT(A) is found to be in violation of principle of natural justice. Though, Ld. CIT(A) had passed the order after discussing briefly about the merits of the case, but that was only a summarily acceptance to the order of Ld. AO, in absence of the submissions of the assessee, which the assessee was ITA No.302/RPR/2024 Global Trading Company 24 deprived off to furnish in absence of reasonable opportunity, as its request for further time was not taken into consideration by the Ld. CIT(A). 12. In backdrop of aforesaid facts and circumstances, in order to allow another opportunity to the assessee in the interest of justice, as time and again under various grounds of present appeal stated by the assessee, the order of Ld. CIT(A) is liable to be set aside to reconsider the appeal of assessee. 13. On the issue as the order of Ld. CIT(A) is an exparte order without dealing with the contentions of the assessee, thus, the same cannot be considered as a speaking order, which is mandatory as per settled position of law. On this aspect, we draw support from the judgment of Hon’ble Mumbai High Court in the case of CIT vs. Premkumar Arjundas Luthra (HUF) reported in [2016] 240 taxman 133, wherein Hon'ble Bombay High Court has held as under: “…………It is very clear once an appeal is preferred before the CIT(A), then in disposing of the appeal, he is obliged to make such further inquiry that he thinks fit or direct the Assessing Officer to make further inquiry and report the result of the same to him as found in Section 250(4) of the Act. Further Section 250(6) of the Act obliges the CIT(A) to dispose of an appeal in writing after stating the points for determination and then render a decision on each of the points which arise for consideration with reasons in support. Section 251(l)(a) and (b) of the Act provide that while disposing of appeal the CIT(A) would have the power to confirm, reduce, enhance or annul an assessment and/or penalty. Besides Explanation to sub-section (2) of Section 251 of the Act also makes it dear that while considering the appeal, the CIT(A) would be entitled to consider and decide any issue arising in the proceedings before him in appeal filed for its consideration, even if the issue is not raised by the appellant in its appeal before the CIT(A). Thus, once an assessee files an appeal under Section 246A of the Act, it is not open to him as of right to withdraw or not press the appeal. In fact, the CIT(A) is obliged to dispose of the appeal on merits. In fact, with effect from 1st June, 2001 the power of ITA No.302/RPR/2024 Global Trading Company 25 the CIT(A) to set aside the order of the Assessing Officer and restore it to the Assessing Officer for passing a fresh order stands withdrawn. Therefore, it would be noticed that the powers of the CIT(A) is co-terminus with that of the Assessing Officer i.e. he can do all that Assessing Officer could do. Therefore, just as it is not open to the Assessing Officer to not complete the assessment by allowing the assessee to withdraw its return of income, it is not open to the assessee in appeal to withdraw and/or the CIT(A) to dismiss the appeal on account of non-prosecution of the appeal by the assessee. This is amply dear from the Section 251(l)(a) and (b) and Explanation to Section 251(2) of the Act which requires the CIT(A) to apply his mind to at the issues which arise from the impugned order before him whether or not the same has been raised by the appellant before him. Accordingly, the law does not empower the CIT(A) to dismiss the appeal for non-prosecution as is evident from the provisions of the Act.” 14. In back drop of aforesaid judicial pronouncement, a/w the facts, circumstances, and observations in the instant case, the issues raised in the present appeal of the assessee, without adverting to the merits of the same, restore back to the file of Ld. CIT(A) for de novo adjudication. Needless to say, the assessee shall be afforded with reasonable opportunities of being heard in the set aside appellate proceedings. 15. Before parting with, we may herein note that during the course of hearing before us, certain legal issues qua the validity of approval u/s 151 has been assailed by the assessee, but since the appeal of assessee is restored back to the file of Ld. CIT(A), therefore, we refrain ourselves to deal with any ground of appeal. However, the assessee is granted with the liberty to assail any ground challenging the legality or on merits of the case before the First Appellate Authority and to furnish all the necessary information / evidence / submissions in support of its contentions. ITA No.302/RPR/2024 Global Trading Company 26 16. Resultantly, the present appeal of assessee is partly allowed for statistical purposes, in terms of our aforesaid observations. Order pronounced in the open court on 20/11/2024. Sd/- (RAVISH SOOD) Sd/- (ARUN KHODPIA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर/Raipur; िदनांक Dated 20/11/2024 Hem आदेश की Ůितिलिप अŤेिषत/Copy of the Order forwarded to : आदेशानुसार/ BY ORDER, (Private Secretary) आयकर अपीलीय अिधकरण, रायपुर/ITAT, Raipur 1. अपीलाथŎ / The Appellant- 2. ŮȑथŎ / The Respondent- 3. आयकर आयुƅ(अपील) / The CIT(A), 4. The Pr. CIT -1, Raipur, (C.G.) 5. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 6. गाडŊ फाईल / Guard file. // स×याǒपत Ĥित True copy // "