Harikesh Steel Pvt. Ltd., Ahmedabad V. ITO, Ward-2(1)(3), Ahmedabad

ITA 682/AHD/2018

AI Insights

Harikesh Steel Pvt. Ltd. appealed against the order of the CIT(A)-2, Ahmedabad, which upheld the addition of Rs.1,03,67,376 to the assessee's income on the grounds that the purchases were bogus. The primary contention was the absence of a statutory notice under Section 143(2) during the reopening of the assessment under Section 147. The Assessing Officer had initially made additions based on alleged non-compliance with notices and the submission of bogus purchase bills. The tribunal, referencing a decision by the Hon'ble Gujarat High Court, emphasized the mandatory nature of the notice under Section 143(2) when the original return of income was filed, leading to the allowance of the appeal.

• Counselvise Citation: [2023] 140 COUNSELVISE.COM (IT) 129456 (ITAT-AHMEDABAD)
• Duration Of Justice: 5 year(s) 5 month(s) 11 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 29-08-2023
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Next Hearing Date: 15-08-2023
• Assessment Year: 2012-2013
• Appeal Filed On: 18-03-2018
• Other Referred Cases: CIT vs. Sukhini P. Mody, Tax Appeal No.1353-54 & 1357 of 2007
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ASHOK NATHA BHALEKAR
• Keywords: Bogus purchase
• Section: 147; 148; 144; 142(1); 143(1); 143(2)

Judgement Text

ITA No.682/Ahd/2018 A.Y. 2012-13 Page 1 of 4 IN THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “B” BENCH, AHMEDABAD BEFORE Ms. SUCHITRA KAMBLE, JUDICIAL MEMBER AND SHRI WASEEM AHMED, ACCOUNTANT MEMBER ITA No.682/Ahd/2018 Assessment Year: 2012-13 Harikesh Steel Pvt. Ltd., 704, Lodha Bhavan, Near Old High Court, Navrangpura, Ahmedabad. [PAN – AACCH 1293 D] Vs. Income Tax Officer, Ward – 2(1)(3), Ahmedabad. (Appellant) (Respondent) Assessee by None Revenue by Shri Ashok Natha Bhalekar, Sr. DR Da te o f He a r in g 16.08.2023 Da te o f P ro n o u n ce m e n t 30.08.2023 O R D E R PER SUCHITRA KAMBLE, JUDICIAL MEMBER : This appeal is filed by the Assessee against the order dated 19.01.2018 passed by the CIT(A)-2, Ahmedabad for the Assessment Year 2012-13. 2. The assessee has raised the following grounds of appeal :- “1. The CIT(A) erred in not appreciating that the statutory notice under section 143(2) of the I.T. Act was not served on the assessee and hence the consequential assessment was bad in law as well as on facts. 2. The CIT(A) erred in upholding the addition of Rs.1,03,67,376/- on the pretext that the purchases were bogus. 3. The CIT(A) ought to have appreciated the overall facts and circumstances of the case and in the process should have allowed the contentions canvassed by the appellant. 4. The CIT(A) erred in confirming the direction for charging of interest under Section 234A/234B & 234C of the Act.” ITA No.682/Ahd/2018 A.Y. 2012-13 Page 2 of 4 3. Information was received from the Director of Income Tax (Investigation), Ahmedabad that the assessee company is beneficiary of bogus bills issued by Jitendra Balvantsinh Chavda, Proprietor M/s Chamunda Enterprise and Shri A.A. Patel, Proprietor M/s. Riya Enterprise. The Assessing Officer observed that the assessee company received bogus bills amounting to Rs.1,45,86,000/- from the said parties. The return of income for A.Y. 2012-13 was filed by the assessee on 30.03.2013 declaring income of Rs.12,530/-. The Assessing Officer observed that the assessee company declared purchase of Rs.13,68,26,680/- which included amount of Rs.1,45,86,000/- of bogus purchase. Consequently, the assessee’s case was reopened under Section 147 of the Act by issuance of notice under Section 148 of the Act dated 19.08.2014. In response to various notices of Section 142(1) of the Act, the assessee company filed submissions on 18.02.2015 but the Assessing Officer observed that the assessee has not complied with the statutory notices and passed Assessment Order under Section 144 of the Act thereby making addition of Rs.1,45,86,000/- on account of bogus purchase. 4. Being aggrieved by the Assessment Order, the assessee filed appeal before the CIT(A). The CIT(A) partly allowed the appeal of the assessee. 5. At the time of hearing, none appeared on behalf of the assessee despite giving notice, hence we are proceeding on the basis of submissions made by the assessee before Revenue Authorities which are mentioned in order of the CIT(A). The assessee submitted before the CIT(A) that the Assessing Officer while reopening the assessment under Section 147 of the Act has not issued notice under Section 143(2) and, therefore, in compliance with statutory requirement the Revenue failed to issue statutory notice which is mandatory and, therefore, the Assessment Order itself becomes void ab initio. The assessee relied upon the decision of Hon’ble Gujarat High Court in the case of CIT vs. Sukhini P. Mody, Tax Appeal No.1353-54 & 1357 of 2007. 6. The Ld. DR submitted that the CIT(A) has given categorical finding that no return has been filed and, therefore, notice under Section 143(1) of the Act is not mandatory in assessee’s case. The Ld. DR further submitted that on merit also, the assessee has not produced any document as such, therefore, confirmation of the ITA No.682/Ahd/2018 A.Y. 2012-13 Page 3 of 4 addition is justifiable by the CIT(A). The Ld. DR relied upon the Assessment Order and the order of the CIT(A). 7. We have heard the Ld. DR and perused all the relevant material available on record. It is pertinent to note that statutory notice under Section 143(2) of the Act has to be issued and served as it is a mandatory procedure in case of reopening where original return of income was filed. The finding of the CIT(A) in paragraph no.7 that the assessee has not filed return in response to notice under Section 148 of the Act is not justifiable as the original return of income was field by the assessee and the submission of the assessee dated 18.02.2015 was there on record. The Assessing Officer has not taken a single cognisance of the said submissions and passed the order under Section 144 of the Act i.e. best assessment order and, therefore, on legal issue itself the assessment order become s null and void. In respect of merit as well, the contention of the assessee that the purchase does not relate to this year and was not claimed in this year was not taken in to account by the Assessing officer as well as the CIT(A). Since ground no.1 is legal issue which is decided in favour of the assessee, there is no need to give detailed order in respect of merit. Thus, the appeal of the assessee is allowed. 8. In the result, appeal filed by the assessee is allowed. Order pronounced in the open Court on this 30 th August, 2023. Sd/- Sd/- (WASEEM AHMED) (SUCHITRA KAMBLE) Accountant Member Judicial Member Ahmedabad, the 30 th day of August, 2023 PBN/* Copies to: (1) The appellant (2) The respondent (3) CIT (4) CIT(A) (5) Departmental Representative (6) Guard File ITA No.682/Ahd/2018 A.Y. 2012-13 Page 4 of 4 By order UE COPY TRUE COPY Assistant Registrar Income Tax Appellate Tribunal Ahmedabad benches, Ahmedabad