SHREE KRISHNA UDYOG, RAIPUR,RAIPUR V. INCOME TAX OFFICER, WARD-1(1), RAIPUR, RAIPUR

ITA 841/RPR/2025

AI Insights

The case involves Shree Krishna Udyog, the appellant, who contested an order from the Income Tax Officer (ITO) regarding the disallowance of Rs. 53,32,200, which was considered as bogus purchases from M/s Abhishek Enterprises. The ITO had reopened the assessment under section 148A of the Income Tax Act, 1961, alleging that the assessee had taken accommodation entry in the guise of purchases. The CIT(A) dismissed the appeal due to non-prosecution, as the appellant failed to respond to multiple notices. The Tribunal noted that the CIT(A) erred by not deciding the appeal on merits and instead dismissing it for non-compliance, which is against the provisions of the Act.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 838439 (ITAT-RAIPUR)
• Duration Of Justice: 1 month(s) 18 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 16-02-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2018-2019
• Appeal Filed On: 30-12-2025
• Other Referred Cases: Prem Kumar Arjun Das Luthra HUF vs. CIT
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: PRIYANKA PATEL
• Assessee Lawyers: G.S. AGRAWAL
• Keywords: Set aside; Opportunity of being heard; Bogus purchase; Principle of natural justice; Borrowed satisfaction; Bogus
• Section: 133(6); 145; 6

Judgement Text

" 1 आयकर अपीलीय अिधकरण, रायपुर Ɋायपीठ, रायपुर IN THE INCOME TAX APPELLATE TRIBUNAL RAIPUR BENCH, RAIPUR ŵी पाथŊ सारथी चौधरी, Ɋाियक सद˟ एवं ŵी अवधेश क ुमार िमŵ, लेखा सद˟ क े समƗ BEFORE SHRI PARTHA SARATHI CHAUDHURY, JM & SHRI AVDHESH KUMAR MISHRA, AM आयकर अपील सं. / ITA No: 841/RPR/2025 (िनधाŊरण वषŊ Assessment Year: 2018-19) Shree Krishna Udyog, 17A, Bhanpuri Industrial Area, Raipur, Chhattisgarh, 492010 Vs Income Tax Officer, Ward 1(1), Aaykar Bhawan, Civil Lines, Raipur Chhattisgarh, 492001 PAN: AAPFS5659E (अपीलाथŎ/Appellant) : (ŮȑथŎ / Respondent) िनधाŊįरती की ओर से / Assessee by : Shri G. S. Agrawal, CA राजˢ की ओर से / Revenue by : Dr. Priyanka Patel, Sr. DR सुनवाई की तारीख / Date of Hearing : 10/02/2026 घोषणा की तारीख / Date of Pronouncement : 16/02/2026 आदेश / O R D E R Per Avdhesh Kumar Mishra, AM: This appeal for Assessment Year (‘AY’) 2018-19 filed by the assessee is directed against order dated 16.10.2025 of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (‘NFAC’), Delhi [‘CIT(A)’] passed under section 250 of the Income Tax Act, 1961 (‘Act’). 2. The appellant assessee has raised following grounds of appeal: - “1. That under the facts and the law, the Order of below authorities are bad in law and on facts. Disallowance of Rs. 53,32,200/- kindly be deleted. 2. That under the facts and the law, the Ld. Commissioner of Income Tax (Appeals) erred in passing the Order ex-parte without allowing proper opportunity to the Printed from counselvise.com ITA No.841/RPR/2025 Shree Krishna Udyog vs. Income Tax Officer, Ward-1(1), Raipur 2 Appellant. Prayed that the Order of the Ld. CIT (Appeals) is against natural justice as Appellant applied for adjournment on 08.09.2025 upto 22.10.2025, Ld. CIT (Appeals) passed Order on 16.10.2025. 3. That under the facts and the law, the proceedings initiated by the Ld. AO u/s 148A(1)(a) is without jurisdiction as no prior approval has been obtained by him from the specified authority, therefore, the proceedings are invalid and the Order be annulled. 4. That under the facts and the law, the Ld. AO further erred, which the Ld. CIT (Appeals) did not appreciate, in passing the Order u/s 148A(1)(d) without taking the approval from Ld. PCCIT as per Sec. 151 as more than 3 years elapsed, therefore, the entire proceedings is invalid and the Assessment Order be annulled. 5. That under the facts and the law, the Ld. CIT (Appeals) did not consider that the Ld. AO could not satisfy himself on the basis of information received to initiate proceedings u/s 147as to whether it is the case of bogus sale or case of bogus purchase. The entire proceedings of assessment is invalid, the Order kindly be annulled. 6. That under the facts and the law, the Ld. AO further erred in passing the Order u/s 148A(1)(d) without allowing opportunity of being heard as no information on which basis the proceedings were initiated, as required u/s 148A(1)(d), were supplied and were supplied later-on vide his letter dated 13.10.2025. Prayed to annul the Assessment Order. 7. That under the facts and the law, the Order of the Ld. CIT (Appeals) further erred in confirming the Order of the Ld. AO though the Ld. AO did not make any enquiry as required u/s 148A(a) and acted upon the borrowed opinion. Therefore, the entire proceedings is invalid and the Assessment Order be annulled. 8. That under the facts and the law, the Ld. CIT (Appeals) further erred in dismissing the Appeal though books of accounts and subsequent sales were accepted and provisions of Sec. 145 were not applied. Prayed to delete the addition of Rs. 53,32,200/- 9. That under the facts and the law, the Ld. CIT (Appeals) further erred in confirming the Order of the Ld. AO though all the purchases from M/s Abhishek Enterprises are not bogus purchases and are genuine purchases, by taking actual deliveries and making payment by cheque, no VAT disputed and having other supporting which the Ld. AO did not consider. Prayed to delete the addition of Rs. 53, 32,200/- 10. That under the facts and the law, the Ld. CIT (Appeals) failed to appreciate that the Ld. AO proceeded on the basis of presumption & surmises as proprietor of M/s. Abhishek Enterprises has never said that the sales made by him are bogus. The Ld. AO also did not allow cross-examination. Prayed to delete the addition of Rs.53,32,200/- 11. That under the facts and the law, the Ld. CIT (Appeals) further erred in confirming the Order of the Ld. AO without considering the facts that the Ld. AO initiated the proceedings and made additions on the basis of vague information, not applicable to the Appellant and on the basis of some statements which are not relevant. Prayed to delete the addition of Rs.53,32,000/-.\" Printed from counselvise.com ITA No.841/RPR/2025 Shree Krishna Udyog vs. Income Tax Officer, Ward-1(1), Raipur 3 3. The relevant facts giving rise to this appeal are that the assessee filed its original Income Tax Return (‘ITR’) of the relevant year on 31.10.2018 declaring income of Rs.9,57,020/-. Later, the case was re-opened on the reasoning that the assessee has taken accommodation entry to Rs.53,32,197/- in the garb of purchases from M/s Abhishek Enterprises. The Ld. Assessing Officer (‘AO’) in absence of any compliance on the part of the assessee taxed bogus purchase of Rs.53,32,197/-. Aggrieved, the assessee filed appeal before the Ld. CIT(A), who dismissed the appeal due to non-prosecution as under: “The following notices have been issued through ITBA portal: - Notice issued u/s.250 Issued date Date of hearing Remarks 1st notice 12/09/2024 27/09/2024 No response 2nd notice 03/01/2025 10/01/2025 No response 3rd notice 13/01/2025 20/01/2025 Prayer for adjournment for 45 days filed on 05/03/2025, 22/04/2025, 24/07/2025. 4th notice 03/09/2025 08/09/2025 Prayer for adjournment 5th notice 29/09/2025 10/10/2025 An appellant who has unjustly been wronged is duty bound to ensure that he cooperates with the proceedings and hearings that may come to his ald, If the appellant, after filing an appeal, does not respond to notices, duly served upon him, asking him to justify, substantiate and defend his grounds, then the only inference that can be drawn from this conduct would be that the appellant is not cooperating with a proceeding, whose inception was at his instance, for a reason. An appellate authority cannot be expected to wait indefinitely with the hope that the appellant would someday decide to appear before him and defend his grounds of appeal. Therefore, I do not feel to provide any further adjournment to the appellant to furnish written submission when already time of more than 8 months was already allowed. In view of this, the instant appeal is, therefore, being decided upon merits as per the material TAX DEV on record before me. Grounds 1-5 Printed from counselvise.com ITA No.841/RPR/2025 Shree Krishna Udyog vs. Income Tax Officer, Ward-1(1), Raipur 4 In these grounds, the appellant has agitated that the A.O. has erred in passing assessment order arbitrarily, under presumption and surmises, against natural justice, without disclosing the material and not allowing opportunity to cross-examine the vendor and the order was bad in law, without any specific information against the appellant and on the basis of borrowed satisfaction. However, as already discussed, the appellant remained non-compliant during the course of appeal proceedings and has not provided any clarification on these issues raised by him. Therefore, I find that the appellant's agitations have not been explained or substantiated by the appellant during the course of appeal proceedings and therefore, cannot be accepted in absence of any explanation. Further, the appellant had failed to substantiate that it had requested for the specific information but the same was not provided by the AO or it had requested for cross-examination of the vendor which was not allowed by the AO. Accordingly, these grounds stand dismissed. Grounds 6-8 In all these grounds raised, the appellant has agitated against the actions of the AO on the issue of disallowance of Rs.53,32,200/-, considered as bogus transaction. The facts of the case have already been discussed in the initial part of the order. I find that the appellant has not filed any documentary evidence before the AO regarding the transactions allegedly held with M/s Abhishek Enterprises. As already discussed, the appellant remained non-compliant during the course of appeal proceedings and has not elaborated anything on the issue for which the disallowances/additions were made. He did not even produce the copy of his cash book or bank book or ledger copy of M/s Abhishek Enterprises in his books or the bills/ vouchers/ challan to show that the transaction was genuine. I also find that the AO has noted that when a notice u/s 133(6) was issued to M/s Abhishek Enterprises through mail, no reply was submitted even by the said party. In such a scenario, I am of the considered opinion that the appellant does not have anything to say or have anything to offer to the appellate authority in support of his various grounds of appeal, and thus, that the appellant does not want to press any of the grounds of appeal. In light of this, I do not see any reason to interfere with the findings of the AO as enumerated in the assessment order. These grounds, therefore, stand dismissed.” 4. Before us, Shri G.S. Agrawal, CA, Ld. Authorized Representative (‘AR’) of the assessee drew our attention to the fact that the Ld. CIT(A) had decided the Printed from counselvise.com ITA No.841/RPR/2025 Shree Krishna Udyog vs. Income Tax Officer, Ward-1(1), Raipur 5 appeal ex-parte due to non-prosecution. He prayed for remanding the case back to the Ld. CIT(A). 5. Dr. Priyanka Patel, Ld. Sr. DR, drawing our attention to various paras of the assessment order and impugned appellate order, submitted that reasonable opportunities of being heard had been provided to the appellant assessee by the Authorities below; Ld. AO and Ld. CIT(A). However, the appellant assessee tactfully ensured noncompliance to avoid investigations. Hence, she prayed for dismissing the appeal and upholding impugned order. She drew our attention to orders of the Authorities below to demonstrate that the appellant assessee did not ensure any effective compliance either before the Ld. AO or The Ld. CIT(A). On our specific query, she reluctantly admitted for remanding the case back to the file of the Ld. CIT(A) for adjudication on merit. 6. We have heard both parties and have perused the materials available on the record. We have taken note of the fact that the Ld. CIT(A) has not decided the appeal after discussing the issue in detail and his reasons for agreeing with the assessment order though he/she, as per provisions of section 250(6) of the Act, is obliged to dispose of the appeal in writing with well-reasoned order on each point of determination arisen for his consideration. It is evident from the perusal of section 251(1)(a), 251(1)(b) and Explanation of section 251(2) of the Act that the CIT(A) is required to apply his/her mind to all the issues which arise from the impugned order before him/her, whether or not these issues have been raised by the assessee before him/her. On cumulative consideration of the provisions of section 250(6) of the Act Printed from counselvise.com ITA No.841/RPR/2025 Shree Krishna Udyog vs. Income Tax Officer, Ward-1(1), Raipur 6 read with sections 250(4), 250(5), 251(1)(a), 251(1)(b) of the Act and Explanation of section 251(2) of the Act, the CIT(A) is not empowered to dismiss the appeal for non- prosecution of appeal and is obliged to dispose of the appeal on merits. Reliance is placed on the decision of the Hon'ble Bombay High Court in case of Prem Kumar Arjun Das Luthra HUF, (2017) 291 CTR 614 (Bom.). 7. We take note of the fact that the assessee has made non-compliance consistently before the Authorities below. The Ld. CIT(A) has decided the case ex- parte and not on the merit. Considering the facts in entirety and in the interest of justice, we are not offering any comment on merit of the case. We deem it fit to set aside the impugned order and remand the matter back to the file of the Ld. CIT(A) for deciding the case afresh/denovo, in accordance with the law, after providing adequate opportunity of being heard to the assessee. Ordered accordingly. The appellant assessee, no doubt, shall cooperate in remitted appellate proceedings. 8. In the result, this appeal of assessee is allowed for statistical purposes. Order pronounced in the open court on 16/02/2026. Sd/- (PARTHA SARATHI CHAUDHURY) Sd/- (AVDHESH KUMAR MISHRA) Ɋाियक सद˟ / JUDICIAL MEMBER लेखा सद˟ / ACCOUNTANT MEMBER रायपुर / Raipur; िदनांक Dated 16/02/2026 HKS, PS आदेशकी Ůितिलिप अŤेिषत / Copy of the Order forwarded to : 1. अपीलाथŎ/ The Appellant Printed from counselvise.com ITA No.841/RPR/2025 Shree Krishna Udyog vs. Income Tax Officer, Ward-1(1), Raipur 7 आदेशानुसार/ BY ORDER, //True copy// (Private Secretary) आयकर अपीलीय अिधकरण, रायपुर / ITAT, Raipur 2. ŮȑथŎ/ The Respondent 3. The Pr. CIT, Raipur (C.G.) 4. िवभागीय Ůितिनिध, आयकर अपीलीय अिधकरण, रायपुर/ DR, ITAT, Raipur 5. गाडŊ फाईल / Guard file. Printed from counselvise.com "