RAJESH CHIMNANI L/H LATE SHRI SUDHAM CHAND CHIMNANI, RAIPUR,RAIPUR V. INCOME TAX OFFICER-3(1), RAIPUR, RAIPUR

ITA 79/RPR/2025

AI Insights

The case involves Rajesh Chimnani, the legal heir of the late Shri Sudham Chand Chimnani, who appealed against the order of the Income Tax Officer (ITO) for the assessment year 2016-17. The ITO had made a disallowance of Rs. 92,09,090 on account of alleged bogus purchases and issued a reassessment order under sections 147 and 148 of the Income Tax Act, which the assessee contested as illegal and without proper jurisdiction. The CIT(Appeals)/NFAC initially set aside the ITO's order and remanded the case for a fresh assessment, which was upheld by the Tribunal. The Tribunal's decision allows for a re-examination of the legal grounds concerning the notice issued under section 148 during the new assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35662 (ITAT-RAIPUR)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 20-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2016-2017
• Laws Referred To: Income-tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: R.B DOSHI
• Keywords: Set aside; Opportunity of being heard; Reassessment proceedings; Bogus purchase; Bogus
• Section: 144; 251; 22

Judgement Text

"आयकर अपीलȣय अͬधकरण Ûयायपीठ रायपुर मɅ। IN THE INCOME TAX APPELLATE TRIBUNAL, RAIPUR BENCH, RAIPUR BEFORE SHRI PARTHA SARATHI CHAUDHURY, JUDICIAL MEMBER AND SHRI ARUN KHODPIA, ACCOUNTANT MEMBER आयकर अपील सं. / ITA No.79/RPR/2025 Ǔनधा[रण वष[ / Assessment Year : 2016-17 Rajesh Chimnani, L/h. Late Shri Sudham Chand Chimnani, B-17/7, Near Pani Tanki, New Rajendra Nagar, Raipur (C.G.)-492 001 PAN: ACFPC0343R ........अपीलाथȸ / Appellant बनाम / V/s. The Income Tax Officer-3(1), Raipur (C.G.) ……Ĥ×यथȸ / Respondent Assessee by : Shri R.B Doshi, CA Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई कȧ तारȣख / Date of Hearing : 13.03.2025 घोषणा कȧ तारȣख / Date of Pronouncement : 20.03.2025 2 Rajesh Chimnani L/h of Late Shri Sudham Chand Chimnani ITA No. 79/RPR/2025 आदेश / ORDER PER PARTHA SARATHI CHAUDHURY, JM: This appeal preferred by the assessee emanates from the order of the Ld. CIT(Appeals)/NFAC, dated 16.12.2024 for the assessment year 2016-17 as per the following grounds of appeal on record: “1. The AO erred in making disallowance of Rs.92,09,090/- on account of alleged bogus purchases. The disallowance made by the AO is illegal, arbitrary, baseless and not justified. 2. The notice issued u/s.148 and consequent reassessment order passed by AO is illegal inasmuch as the sanction u/s.151 from specified authority is not as per law and without jurisdiction. 3. The reassessment order passed by AO is illegal, bad in law and is liable to be quashed. 4. Without prejudice to above ground, assumption of jurisdiction by the AO, initiation of reassessment proceedings and the consequent reassessment order passed by the AO is illegal, ab initio void. 5. The appellant reserves the right to add, amend or alter any of the ground/s of appeal.” 2. Brief facts in this case are that the assessee had filed its return of income for A.Y.2016-17 on 16.09.2016, declaring an income of Rs.6,06,850/-. As per the information received by the ITO (Investigation), Raipur from the Commercial Tax Department, the case has been selected for scrutiny after obtaining prior approval from the Pr. CIT-1, Raipur. Accordingly, the Assessing Officer issued notice u/s.148 of the Act, dated 3 Rajesh Chimnani L/h of Late Shri Sudham Chand Chimnani ITA No. 79/RPR/2025 29.07.2022 with a direction to file ITR within 30 days. However, the assessee had not filed the same. 3. During the course of assessment proceedings, the Assessing Officer observed that investigation was conducted in case of one, Shri Deepak Nanjyani wherein it was found that 28 entities belonging to 22 different individuals are involved in providing bogus bills to various beneficiaries and the assessee is one of such beneficiary who had taken accommodation entries. Assessment was completed by the Assessing Officer vide his order passed u/s.147 r.w.s. 144 of the Act, dated 22.05.2023 wherein after making an addition of Rs.92,09,090/- on account of bogus purchases, income of the assessee was determined at Rs.98,15,940/-. 4. On appeal before the first appellate authority, the Ld. CIT(Appeals)/NFAC who set-aside the order of the Assessing Officer and restored the matter back to his file with the direction to frame the assessment afresh after giving adequate opportunity of being heard to the assessee. For the sake of completeness, the observations of the Ld. CIT(Appeals)/NFAC are culled out as follows: “5. During the course of appellate proceedings, the legal heir of the appellant submitted that the appellant Shri Sudham Chand Chimnani has expired on 24.10.2020 and his legal heir is his son Rajesh Chimnani. Rajesh Chimnani has been registered as legal heir of Late Shri Sudham Chand Chimnani in e-filing portal since 13.01.2022. The Notices in respect of hearing were sent to e-mail \"[e-mail]\" which belongs to the counsel of appellant and all the tax related 4 Rajesh Chimnani L/h of Late Shri Sudham Chand Chimnani ITA No. 79/RPR/2025 matters/compliances are looked after by the counsel of the appellant only. However, the counsel, owing to his personal reasons and pre-occupation, could neither himself look into the matter nor did he communicate about the non-compliance of notices to the legal heir of appellant. This is how the notices remained un-complied. I find that the explanation submitted by the appellant was not submitted before the AO during assessment proceedings. Therefore, the contention of the appellant needs to be examined by the AO, hence this is fit case for setting aside to the file of AO for fresh adjudication. 6. Vide Finance Act, 2024, in section 251 of the Income-tax Act, in sub-section (1), in clause (a), the following proviso has been inserted w.e.f.01.10.2024 – \"Provided that where such appeal is against an order of assessment made under section 144, he may set aside the assessment and refer the case back to the Assessing Officer for making a fresh assessment\". The above amendment to section 251 of the Act is relating to the powers of the Joint Commissioner (Appeals) or the Commissioner (Appeals). Sub-section (1) of the said section provides that Commissioner (Appeals) have the powers to confirm, reduce, enhance or annul the assessment, in the case of an appeal against an order of assessment; or confirm, cancel, or vary to enhance or reduce, the penalty order, in the case of an appeal against an order imposing a penalty while disposing of such appeal. Prior to the above amendment, Commissioner (Appeals) was not having the powers of setting aside the assessment order. However, vide aforesaid amendment by inserting a proviso in clause (a) of subsection (1) thereof, Commissioner (Appeals) have been empowered to set aside the assessment order where an appeal have been filed against an order of assessment under section 144 of the Act and refer the case back to the Assessing Officer for making a fresh assessment. This amendment is in force w.e.f. 01.10.2024. The AO has issued various notices to the appellant from time to time. The appellant remained non responsive to the notices issued, during entire Assessment Proceedings. As per Memorandum Explaining Powers of CIT(A) in the bill to set aside and refer case back to AO for making fresh assessment one of the reasons for introducing bill is non-responsive attitude of assessee to the various notices during the course of Assessment Proceedings. In the case of appellant, the appellant also remained non responsive to various notices issued by AO. Therefore, the case of the appellant is set aside to the file of AO. 5 Rajesh Chimnani L/h of Late Shri Sudham Chand Chimnani ITA No. 79/RPR/2025 7. Considering the facts and circumstances of the case discussed in para 5 above and the powers vested in me vide proviso in clause (a) of subsection (1) of section 251 of the Act, I hereby set aside the order of the AO and restore the same back to the file of the AO with the directions to the AO to frame the assessment order afresh after giving adequate opportunity of being heard to the appellant. 8. In the result, the appeal is set aside.” 5. The Ld. Counsel for the assessee has raised a legal ground that the notice u/s.148 of the Act, dated 29.07.2022 and consequent reassessment order passed by the Assessing Officer is illegal as sanction u/s. 151 of the Act from the specified authority is not as per the mandate of law and without jurisdiction, therefore, the same is liable to be quashed for want of valid assumption of jurisdiction. 6. Per contra, the Ld. Sr. DR relying on the order of the Ld. CIT(Appeals)/NFAC submitted that the first appellate authority had rightly set-aside the order of the Assessing Officer and remanded the same to his file with a direction to frame the assessment order afresh after giving adequate opportunity of being heard to the assessee. 7. We have thoughtfully considered the submissions advanced by both the parties and facts and circumstances involved in the present case. We find that the Ld. CIT(Appeals)/NFAC as per powers vested with him vide proviso to in clause (a) of Sub-section (1) of Section 251 of the Act (vide Finance Act, 2024 w.e.f. 01.10.2024), set-aside the order of the Assessing 6 Rajesh Chimnani L/h of Late Shri Sudham Chand Chimnani ITA No. 79/RPR/2025 Officer and restored the same back to the file of the Assessing Officer with the directions to the Assessing Officer to frame the assessment order afresh after giving adequate opportunity of being heard to the assessee. Therefore, we find no infirmity with the findings of Ld. CIT(Appeals)/NFAC which is hereby upheld. 8. At this stage, it would be relevant to point out that as we have upheld the order of the Ld. CIT(Appeals)/NFAC who had set-aside the order of the Assessing Officer and restored the same to his file for denovo adjudication with similar terms, which in effect would be the new adjudication all together, therefore, the assessee shall be at liberty to raise the legal plea as had been raised before us at the time of denovo adjudication before the Assessing Officer. 9. As per the above terms the grounds of appeal raised by the assessee are allowed for statistical purposes. 10. In the result, appeal of the assesse is allowed for statistical purposes. Order pronounced in the open court on 20th March, 2025. Sd/- Sd/- ARUN KHODPIA PARTHA SARATHI CHAUDHURY (ACCOUNTANT MEMBER) (JUDICIAL MEMBER) रायपुर/ RAIPUR ; Ǒदनांक / Dated : 20th March, 2025. SB, Sr. PS 7 Rajesh Chimnani L/h of Late Shri Sudham Chand Chimnani ITA No. 79/RPR/2025 आदेश कȧ ĤǓतͧलͪप अĒेͪषत / Copy of the Order forwarded to : 1. अपीलाथȸ /The Appellant. 2. Ĥ×यथȸ /The Respondent. 3. The CIT(Appeals)-1, Raipur (C.G.) 4. ͪवभागीय ĤǓतǓनͬध, आयकर अपीलȣय अͬधकरण, रायपुर बɅच, रायपुर / DR, ITAT, Raipur Bench, Raipur. 5. गाड[ फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलȣय अͬधकरण, रायपुर / ITAT, Raipur. "