SANJAY KUMAR YADAV,DELHI V. ASSESSMENT UNIT INCOME TAX DEPARTMENT, DELHI

ITA 4558/DEL/2024

AI Insights

The case involves Sanjay Kumar Yadav, the appellant, who appealed against the order of the National Faceless Appeal Centre, Delhi, which pertained to the Assessment Year 2018-19. The primary issue was the disallowance of Rs.15,18,420/- under section 69C of the Income Tax Act, which the Assessing Officer classified as bogus purchases from M/s Tirupati Enterprises. The appellant contested that the transactions were legitimate and that there was no direct evidence of fraud. The Assessing Officer's decision was based on the involvement of M/s Tirupati Enterprises in ITC fraud and the non-filing of returns, which the appellant argued did not implicate him directly. The CIT(A) upheld the disallowance due to lack of evidence from the appellant. The Tribunal found that the appellant was not given adequate opportunity to present his case, leading to the setting aside of the previous orders and a remand for a fresh assessment.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 31724 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 27-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2018-2019
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SAHIL KUMAR BANSAL
• Assessee Lawyers: SUMIT KUMAR GOYANKA
• Keywords: Principle of natural justice; Bogus
• Section: 148; 69C

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH, ‘G’: NEW DELHI BEFORE SHRI YOGESH KUMAR US, JUDICIAL MEMBER AND SHRI BRAJESH KUMAR SINGH, ACCOUNTANT MEMBER ITA No.4558/Del/2024 [Assessment Year: 2018-19] Sanjay Kumar Yadav, 7802, Arakshan Road, Ram Nagar, Pharganj, Delhi-110005 Vs Assessment Unit, Income Tax Department, Delhi PAN-AARPY8996L Assessee Revenue Assessee by Shri Sumit Kumar Goyanka, CA Revenue by Shri Sahil Kumar Bansal, Sr. DR Date of Hearing 03.03.2025 Date of Pronouncement 27.03.2025 ORDER PER BRAJESH KUMAR SINGH, AM, This appeal by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi dated 01.08.2024 pertaining to Assessment Year 2018-19. 2. Ground of appeal raised by the assessee are as under:- 1. Legitimate Business Operation & Market Practices • The goods purchased were common in appellant's line of business, which supports the claim of genuine transactions. • Industry norms regarding the suppliers and the nature of the goods related to appellant business is all good are related to jewelry which are precious items are picked via self-vehicle only and there is no need for any delivery challans, lorry receipts and e-way bills are not applicable on it. it demonstrates a consistent pattern of legitimate trade. 2. No Direct Evidence of Fraud 2 ITA No.4558/Del/2024 • The classification of the purchase as bogus is based on the status of M/s Tirupati Enterprises and not on any direct evidence against appellant. • Stress that mere non-filing of returns, not available on registered address the ITC claimed is bogus and further purchase made by him and sales made to other parties by M/s Tirupati Enterprises are also bogus, does not automatically implicate appellant in wrongdoing. 3. Absence of Alternate Evidence • The AO has not provided compelling evidence to prove that the transactions were fabricated. • The AO failed to produce any concrete evidence or specific findings to substantiate the claim that the purchases were bogus. The presumption of non-genuineness was unfounded and contrary to the documentary evidence provided. 4. Independent Verification • The AO's conclusion was based on third party information If possible, request the authorities to independently verify the existence of M/s Tirupati Enterprises and the transactions in question. • Appellant tried to contact the proprietor of M/s Tirupati Enterprises to get account confirmation but he came to know that he had died due to covid. 5. Violation of Principles of Natural Justice: • The AO did not consider the complete information provided by the appellant, thereby violating principles of natural justice. The appellant was not given a fair opportunity to present all relevant information before the disallowance was made. 3. Brief facts of the case:- In this case, the Assessing Officer had information that the assessee had made transaction with entity named M/s Tirupati Enterprises proprietary Shri Bunty Verma for Rs.15,18,420/- during the Financial Year 2017-18. The Assessing Officer also had information that Shri Bunty Verma was involved in ITC fraud amounting to rupees above 50 Crores during the said period. Notice u/s 148 of the Act was issued on 09.04.2022. The Assessing Officer noted that M/s Tirupati Enterprises proprietary Shri Bunty Verma was a non-filer and the assessee during Financial Year 2017-18 relevant to AY 2018-19 had made total 3 ITA No.4558/Del/2024 purchases amounting to Rs.15,63,973/- (includes GST Tax of Rs.45,552/-) and has made sales to M/s Tirupati Enterprises in Financial Year 2019-20 and he stated that the assessee had no further transaction with M/s Tirupati Enterprises. The Assessing Officer further noted that on perusal of the ledger account, it was noticed that there was no evidence for the date and mode of payment. A show-cause notice was issued on 10.11.2023 asking the assessee to explain why the addition of Rs.15,18,420/- should not be made. According to the Assessing Officer, no reply was given tot he said show-cause notice. Accordingly, the Assessing Officer disallowed a sum of Rs.15,18,420/- u/s 69C of the Act. 4. Aggrieved with the said order, the assessee appealed before the Ld. CIT(A). Before the Ld. CIT(A), the assessee did not appear and the ld. CIT(A) noted that no concrete documents were placed by the assessee before him to support its grounds of appeal. Therefore, in absence of any evidence to rebut the assessment order, the Ld. CIT(A) confirmed the addition of Rs.15,18,420/- u/s 69C of the Act made in the assessment order. 5. Against the above order, the assessee is in appeal before us. 6. During the hearing, the ld. Counsel for the assessee submitted that submissions made by the assessee before Assessing Officer and the Ld. CIT(A) were not considered in fairness by both the authorities and therefore, the matter may be set-aside to the file of the Assessing Officer to give a fresh opportunity to submit the evidence/documents in support of its claim. 7. The Ld. Sr. DR supported the orders of the authorities below. 4 ITA No.4558/Del/2024 8. We have considered the rival submissions and perused the material available on record. It is seen that the assessee did not appear before the ld. CIT(A) and submitted that the hearing notices were not served upon him. In view of the above material facts and in the interest of justice, order dated 29.11.2023 of the Assessing Officer and the order of the ld. CIT(A) dated 01.08.2024 are set-aside and the matter is restored back to the file of the Assessing Officer for de novo assessment in accordance with law. 9. In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced in the open court on 27th March, 2025. Sd/- Sd/- [YOGESH KUMAR US] [BRAJESH KUMAR SINGH] JUDICIAL MEMBER ACCOUNTANT MEMBER Dated 27.03.2025 f{x~{tÜ f{x~{tÜ f{x~{tÜ f{x~{tÜ Copy forwarded to: 1. Assessee 2. Respondent 3. PCIT 4. CIT(A) 5. DR Asst. Registrar, ITAT, New Delhi "