M/S VXA GLOBAL LLP,JAIPUR V. INCOME TAX OFFICER, WARD 1(1), JAIPUR, JAIPUR

ITA 1027/JPR/2025

AI Insights

The case involves M/s. VXA Global LLP, which appealed against the order of the Commissioner of Income Tax, National Faceless Appeal Centre (CIT, NFAC), Delhi, for the assessment year 2021-22. The CIT, NFAC, had upheld the AO's order, which was passed under sections 144 and 144B of the Income Tax Act, 1961, and involved additions of Rs. 1,33,17,500 as bogus purchases and Rs. 37,44,000 as unexplained expenditure. The assessee contended that the order was based on surmises and conjectures without proper evidence or opportunity for cross-examination, violating the principles of natural justice. The ITAT noted the assessee's non-compliance with previous notices and the absence of written submissions, leading to the initial dismissal of the appeal. However, recognizing the need for a fair hearing, the ITAT restored the matter to the AO for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 782272 (ITAT-JAIPUR)
• Duration Of Justice: 3 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 28-10-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Assessment Year: 2021-2022
• Appeal Filed On: 15-07-2025
• Other Referred Cases: Anil Goel Vs. CIT, Popular Engineering Co. v. ITAT
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: GAURAV AWASTHI
• Assessee Lawyers: PARIDHI JAIN
• Keywords: Condonation of delay; Opportunity of being heard; Corroborative evidences; Unexplained expenditure; Bogus purchase; Principle of natural justice; Cancellation of registration; Bogus
• Section: 144; 142(1); 37(1)

Judgement Text

"vk;djvihyh; vf/kdj.k] t;iqjU;k;ihB] t;iqj IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”B” JAIPUR Mk0 ,l- lhrky{eh]U;kf;dlnL; ,oaJhjkBksMdeys'kt;UrHkkbZ] ys[kk lnL; ds le{k BEFORE: DR. S. SEETHALAKSHMI, JM & SHRI RATHOD KAMLESH JAYANTBHAI, AM vk;djvihy la-@ITA No. 1027/JPR/2025 fu/kZkj.ko\"kZ@Assessment Year : 2021-22 M/s. VXA Global LLP 1,Laxman Singh Block, Jhotwara Road Jaipur302 012 cuke Vs. The ITO Ward -1 (1) Jaipur LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: AAPFV 1206L vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksjls@Assesseeby : Ms. Paridhi Jain, Advocate jktLo dh vksjls@Revenue by: Shri Gaurav Awasthi, JCIT-DR lquokbZ dh rkjh[k@Date of Hearing : 08/10/2025 mn?kks\"k.kk dh rkjh[k@Date of Pronouncement: 28 /10/2025 vkns'k@ORDER PER: DR. S. SEETHALAKSHMI, J.M. This appeal filed by the assessee is directed against the order of learned Commissioner of Income Tax, National Faceless Appeal Centre, Delhi[ for short CIT(A)] dated 26.06.2024 for the assessment year 2021-22 raising therein following grounds of appeal. ‘’(1). The Learned NFAC (Appeals) has erred in law and on facts in upholding the assessment Order of Assessment Unit Income Tax Department dated 23.12.2022 for the assessment year 2021-22 passed U/s 144 read with section 144B of the Income-tax Act, 1961 and dismissing the appeal Printed from counselvise.com 2 ITA NO. 1027/JP/2025 M/S. VXA GLOBAL LLP VS ITO WARD 1(1), JAIPUR 2) The Learned NFAC (Appeals) has erred in law and on facts in upholding the addition by framing various incorrect observations on surmises & conjectures and without providing the complete statements of the various persons and other documents/evidences/material relied upon by AO and without providing the opportunity to cross examination of these persons and by violation of principle of natural justice 3) The Learned NFAC (Appeals) has erred in law and on facts in upholding the Order of AO under section 144 r/w section 144B of the Income Tax Act being illegal, excessive and without authority of law. 4) The Learned NFAC (Appeals) has erred in law and on facts in upholding the Order of AO making addition by framing various incorrect observations on surmises and conjectures and without providing the complete statements of the various persons and other documents/ evidences/material relied upon by AD and providing proper opportunity to the appellant 5) The Learned NFAC (Appeals) has erred in law and on facts in upholding the Order of AO which is passed without service of notice and SCN and without providing opportunity of being heard 6) The Learned NFAC (Appeals) has erred in law and on facts in upholding the Order of AO when the selection of case for complete scrutiny is against the norms of situation of case for scrutiny as specified by the Board and the assessment framed on this basis is null and void 7) The Learned NFAC (Appeals) has erred in law and on facts in upholding the Order of AO in which AO was arbitrary and illegal in making addition of a sum of Rs 1,33,17,500.00 treating purchases as bogus purchases and treating it as unexplained expenditure under section 37(1). 8) The Learned NFAC (Appeals) has erred in law and on facts in upholding the Order of AO in which AO was arbitrary and illegal in of Rs 37,44,000.00 disallowing the ITC and treating it as bogus purchases and making it as unexplained expenditure under section 37(1) and adding the same as income 9) The Learned NFAC (Appeals) has erred in law and on facts in upholding the Order of AO passed without following the procedure laid down in the act 10) The Learned NFAC (Appeals) has erred in law and on facts in concluding the Appeal and passed the order uis 250 of the Act on 26.04. Printed from counselvise.com 3 ITA NO. 1027/JP/2025 M/S. VXA GLOBAL LLP VS ITO WARD 1(1), JAIPUR 2024 without giving the reasonable opportunity of being heard and by violating the principle of natural justice 2.1 At the outset of hearing of the appeal, the Bench noticed that there is delay of 318 days in filing the appeal by the assessee before the Bench for which the assessee has filed an application dated 15-07-2025 for condonation of delay giving therein mainly following reasoning . ‘’ 3. The appellant filed an appeal to the National Faceless Appeal Centre (NFAC), Delhi which was dismissed vide its order dated 26.06.2024 ex-parte 4. The order dated 26.06.2024 was passed without providing the opportunity of being heard to the appellant. The appellant was unable to contact the professional and access income tax portal being medically unfit and stuck in serious personal problems. In the Third week of the month of June 2025, the appellant contacted the professional enquiring about the status of first Appeal, then, got to know that first appeal was dismissed and order u/s 250 of the act was passed on 26.06.2024. 5. In these circumstances the order passed by the NFAC(A) on 26.06.2024 and posted on the Income-tax Portal had come to the knowledge of the appellant firm in the Third week of June, 2025. The assessee immediately requested the professional to look into the order and advice. He advised the assessee firm to file a belated appeal to the Income-tax Appellate Tribunal against the order of the NFAC(A) with the application for condonation of delay narrating the true facts. Accordingly, the appellant is filing the appeal to the Appellate Tribunal and requests to condone the delay of 383 days (i.e. from 26.06.2024 to 15.07.2025) in filing the appeal as delay happened due to the insufficient knowledge and Printed from counselvise.com 4 ITA NO. 1027/JP/2025 M/S. VXA GLOBAL LLP VS ITO WARD 1(1), JAIPUR information with the appellant regarding first appeal being dismissed due to bad health condition 6. In these circumstances the delay of 383 days in filing the appeal to the Hon. Appellate Tribunal may kindly be condoned as the appellant has not deliberately delayed the filing of the appeal more so when the delay has not given any advantage to the appellant. On the contrary the delay has caused lots of difficulties and endangered its appeal if the delay is not condoned. The appellant submits that the delay in filing the appeal was due to facts beyond its control. The appellant most humbly apologizes to your honours for the delay in filing the appeal.’’ To this effect, the assessee has filed an affidavit deposing the above facts as to the delay made in filing the appeal. 2.2 On the other hand, the ld.DR did not object to the submissions of the assessee as to condonation of delay and submitted that the Court may decide the issue as deemed fit and proper in the case. 2.3 After hearing both the parties and perusing the materials available on record and also taking into consideration the reasons mentioned by the assessee in the condonation application, the Bench adopts the lenient view and condones the delay in late filing the appeal before ITAT. 3.1 Apropos grounds of appeal of the assessee, it is noticed that the ld. CIT(A) has passed an ex-parte order in the case of the assessee by holding that despite providing sufficient opportunities the assessee had not Printed from counselvise.com 5 ITA NO. 1027/JP/2025 M/S. VXA GLOBAL LLP VS ITO WARD 1(1), JAIPUR filed any written submission and thus he dismissed the appeal of the assessee by observing at para 7 to para 7.2 of his order as under. ‘’7.Decision:- I have gone through the facts emanating from grounds of appeal and statement of facts and other facts of the case available on the record. From the documents available on record, it is found that the appellant was given sufficient opportunities but appellant failed to avail the opportunity of being heard on the fixed dated of hearings. During the appellate proceedings, the appellant has not complied with even for once nor filed any written submission. In absence of the written submission and evidence, it remained to be unexplained as to how the AO's order is erroneous. If the appellant claims that the assessment order is objectionable he should file the supporting evidences. However, the appellant failed to avail the same by non-complying Therefore, it is presumed that the appellant is not interested in pursuing his own appeal Moreover, the appellant failed to bring on records any facts or documents which can explain how the order of the AD is erroneous. In the case of Anil Goel Vs. CIT, [2008] 306 ITR 212 (Punjab & Haryana), the Hon'ble High Court held as under:- \"4. It is thus obvious on the plain language of section 250 of the Act that date and place of hearing was duly fixed The assessee was also given notice along with notice to the Assessing Officer. The assessee had ample opportunity to make his submissions by appearing in person or through authorized representative. Despite fixing the case for seventeen hearings no one had put in appearance nor any justifiable reason for adjournment was given. Printed from counselvise.com 6 ITA NO. 1027/JP/2025 M/S. VXA GLOBAL LLP VS ITO WARD 1(1), JAIPUR 5 The Tribunal also found that non-recording of reasons in support of order passed by CIT(A) would not amount to committing any illegality because the CIT(A) has adopted the reasoning advanced by the Assessing Officer and has upheld his order The judgment of this Court in the case of Popular Engineering Co. v. IΤΑΤ [2001] 248 ITR 5771, has been nightly relied upon wherein it has been observed that elaborate reasons need not be recorded by the CIT(A) as has been done by the Assessing Officer. The reasons are required to be clear and explicit indicating that the authority has considered the issue in controversy if the appellate/revisional authority has to affirm such an order it is not required to give separate reasons which may be required in case the order is to be reversed by the appellate/revisional authority.’’ 7.1 With regards to the merits of the case, the findings of the AD have been reproduced in the preceding paragraphs During the course of the assessment proceedings it was seen that the assessee had purchased goods from Sho Himanchal Kumar to the tune of Rs. 1,33,17,500/-Since the other party was a non- filer the assessee was asked to substantiate the genuineness of purchases along with documentary evidences The assessee failed to provide any such details and accordingly, the AD added back the sum of Rs. 1,33,17.500/- as bogus purchases Further, since the assessee had availed ITC of Rs 37,44,000/- on invoices which were irregular and in contravention of provisions of CGST Act, the said amount was also added back as unexplained and bogus 7.2 As mentioned above, the appellant has not made any written submissions during the appellate proceedings The onus lies on the appellant to satisfactorily explain these transactions, which it has failed to discharge in light of the above I find no reasons to interfere with the order of the Assessing officer, and Printed from counselvise.com 7 ITA NO. 1027/JP/2025 M/S. VXA GLOBAL LLP VS ITO WARD 1(1), JAIPUR accordingly the addition of Rs. 1,33,17,500/- on the issue of purchases from non-filers and Rs.37,44,000/- on the issue of ITC, as per the assessment order, is confirmed. All the grounds of appeal are accordingly dismissed. In the result, the appeal is dismissed.’’ 3.2 During the course of hearing, the ld. AR of the assessee prayed that the assessee may be provided one more opportunity to adduce the documents required by the AO so that the issue in question could be settled. 3.3 On the other hand, the ld DR objected to such submission of the ld.AR of the assessee and relied upon the orders of the lower authorities. 3.4 We have heard both the parties and perused the materials available on record. Brief facts of the case are that the assessee has filed the return of income on 15-03-2022 declaring total income of Rs.13,04,780/- . In the ITR & Audit Report, the nature of business is mentioned as ‘’Retail Trade of Other Products – code – 09208. The case of the assessee was selected for complete scrutiny under CASS to verify the following issue. ‘’Here the genuineness of transactions uploaded through VRU, identity of parties related with transactions and whether the assessee has sown correct income in the ITR may be verified’’. Thus, it is required to examine Genuineness of claim of purchases made from Non-filers/ filers of non- business ITRs and other transactions uploaded through VRU.’’ Printed from counselvise.com 8 ITA NO. 1027/JP/2025 M/S. VXA GLOBAL LLP VS ITO WARD 1(1), JAIPUR The assessee was given multiple notices by the AO but the assessee remained non-compliant to the notices under section 142(1) of the Act and show cause notices. Hence, the AO observed that the assessee is totally non-responsive and the AO made an addition of Rs.1,70,61,500/- u/s 37(1) of the Act in the hands of the assessee by observing as under:- ‘’8. Conclusion a) Thus, in view of the above it is pertinent to mention here that it is either Suo-Moto Cancellation of registration initiated by the Tax Official for various default as per the provisions of GST law and Even the State GST Dept. However the assessee did not furnish any clarification in this regard b) It is also to be noted that Sri Himanchal Kumar filed GSTR1 for 17 months i.e. FY 2019-2020 - 2 months: FY 2020-21-12 months and FY 2021-22 -2 months c) There is no record of business before FY 2020-21 The business is in the name of individual who never indulged in any business activities but suddenly has business activities with transactions running into crores of rupees and did not file return of income in spite of alleged turnover in that one year i.e. FY 2020-21. The parties also have not carried out any business thereafter. d) It is also seen from the records that Sn Himanchal Kumar has not filed return of income for any of the Assessment Years till date e) The assessee has not produced complete details of e-way bills. Stock Register, date of purchase, date of payment, purchase bills. Copies of invoices to prove the actual movement of stock. f) The Chartered Accountant has certified in the Audit report \"valuation stock is not possible and valuation has been taken as certified by partner From the 3CD report, it is also noticed that nothing has been mentioned about the goods traded such as item name, unit name, opening and closing stock an purchases and sales for the year. g) Physical enquiries have shown that the address of the party is either fake o the addresses available do not pertain to these parties. Printed from counselvise.com 9 ITA NO. 1027/JP/2025 M/S. VXA GLOBAL LLP VS ITO WARD 1(1), JAIPUR h) Non-submission of individual ledgers, bank payment details, ledger of the assessee in the books of the third-party suppliers etc as asked for in the SCN dated 12.12. 2022, clearly points that the assessee has failed to prove the genuineness of the purchases made from the third parties mentioned above i) The assessee did not exercise the option given in the SCN dated 12/12/2022 to produce or examine the suppliers. As assessee has remained non-compliant despite repeated notices issued to the assessee as discussed in the above paras the assessee had availed ITC of Rs.37,44,000/- on invoices which were irregular and contravention to the provisions of CGST Act, represents bogus purchases where genuineness of transactions was not substantiated by the assessee. Therefore, the said claim of purchases amounting Rs 37,44,000/- debited to the Trading and P & L account which are not proved is disallowed and added back to the returned income. 1) Further the purchases made from non-filer Shri Himanchal Kumar amounting to Rs.1,33,17,500/- are considered as not genuine and is brought to tax as unexplained expenditure u/s 37(1) of the IT Act and taxed accordingly (Total Disallowance u/s 37(1): Rs.1,70,61,500/-)’’ In first appeal, the ld. CIT(A) has confirmed the action of the AO as the assessee had not filed the any written submission / evidence to counter the order of the AO. The Bench noted that the assessee was ex-parte before the lower authorities and thus from the entire conspectus of the case, the Bench considers the prayer of the ld. AR of the assessee that lis between the parties has to be decided on merits so that nobody’s rights could be scuttled down without providing opportunity of being heard to the assessee. Hence, the matter is restored to the file of the AO to decide it afresh by providing one more opportunity of hearing, however, the Printed from counselvise.com 10 ITA NO. 1027/JP/2025 M/S. VXA GLOBAL LLP VS ITO WARD 1(1), JAIPUR assessee will not seek any adjournment on frivolous ground and remain cooperative during the course of proceedings. Thus, the appeal of the assessee is allowed for statistical purposes. 3.5 Before parting, we may make it clear that our decision to restore the matter back to the file of the AO shall in no way be construed as having any reflection or expression on the merits of the dispute, which shall be adjudicated by AO independently in accordance with law. 4.0 In the result, the appeal of the assessee is allowed for statistical purposes Order pronounced in the open court on 28/10/2025. Sd/- Sd/- ¼jkBksM deys'kt;UrHkkbZ ½ ¼MkWa-,l-lhrky{eh½ (RATHOD KAMLESH JAYANTBHAI) (Dr. S. Seethalakshmi) ys[kk lnL; @Accountant Member U;kf;dlnL;@Judicial Member Tk;iqj@Jaipur fnukad@Dated:- 28 / 10/2025 *Mishra vkns'k dh izfrfyfivxzsf’kr@Copy of the order forwarded to: 1. The Appellant- M/s. VXA Global LLP, Jaipur 2. izR;FkhZ@ The Respondent- The ITO, Ward -1(1), Jaipur 3. vk;djvk;qDr@ The ld CIT 4. foHkkxh; izfrfuf/k] vk;djvihyh; vf/kdj.k] t;iqj@DR, ITAT, Jaipur 5. xkMZQkbZy@ Guard File (ITA No. 1027/JPR/2025) vkns'kkuqlkj@ By order, lgk;diathdkj@Asstt. Registrar Printed from counselvise.com "