SPARK GEMS,MUMBAI V. ITO-19(3)(1), MUMBAI

MA 285/MUM/2025

AI Insights

The case involves Spark Gems, the appellant, against the Income Tax Officer, the respondent, concerning the assessment year 2012-13. The Tribunal initially dismissed the Revenue's appeals due to the non-appearance of the assessee, attributed to the notices being sent to an outdated email address of a former accountant. Upon the assessee's application for recall, it was revealed that there was a significant factual error in the Tribunal's earlier order regarding the absence of a cross-appeal by the assessee, which was actually filed. The Tribunal found that the reassessment concerning alleged bogus purchases was improperly addressed in the absence of a comprehensive hearing of all related appeals.

• Counselvise Citation: [2026] 140 COUNSELVISE.COM (IT) 826317 (ITAT-MUMBAI)
• Duration Of Justice: 2 month(s) 23 day(s)
• Appeal Type: Miscellaneous Application
• Pronouncement Date: 09-01-2026
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: G
• Assessment Year: 2012-2013
• Appeal Filed On: 17-10-2025
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: SWAPNIL CHOUDHARY
• Assessee Lawyers: SURESH PATNI
• Keywords: Reassessment proceedings; Bogus purchase; Bogus
• Section: 147

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, ‘G’ BENCH MUMBAI BEFORE: SHRI AMIT SHUKLA, JUDICIAL MEMBER & SHRI MAKARAND VASANT MAHADEOKAR, ACCOUNTANT MEMBER MA Nos.284 & 285/Mum/2025 (Arising out of ITA Nos.3616/Mum/2024 & 3617/Mum/2024 (Assessment Year :2012-13) Spark Gems 81, Kamal 69, Walkeshwar Road Maharashtra- 400 006 Vs. Income Tax Officer- 19(3)(1), Mumbai PAN/GIR No.AAAFS5688J (Appellant) .. (Respondent) Assessee by Shri Suresh Patni Revenue by Shri Swapnil Choudhary Date of Hearing 09/01/2026 Date of Pronouncement 09/01/2026 आदेश / O R D E R PER AMIT SHUKLA (J.M): These Miscellaneous Applications have been preferred by the assessee seeking recall of the Tribunal’s order passed in Revenue’s appeals, on the ground that the said appeals came to be disposed of ex parte, owing to non-appearance of the assessee for reasons which, according to the applicant, were neither deliberate nor attributable to any negligence on its part. Printed from counselvise.com MA Nos.284 & 285/Mum/2025 Spark Gems 2 2. It is the case of the assessee that the notices of hearing were served on an email address belonging to its erstwhile accountant, who had ceased to be associated with the firm several years prior. It is further stated that during the relevant period, the assessee was not carrying on active business operations, and consequently, the notices did not come to its knowledge, resulting in non-representation before the Tribunal at the time when Revenue’s appeals were taken up for hearing. 3. Apart from the above, a significant and material factual error has been pointed out in the impugned order, namely, the observation of the Tribunal that no cross appeal had been filed by the assessee against the addition sustained by the learned Commissioner of Income Tax (Appeals). The said observation, as correctly demonstrated before us, does not accord with the record. The assessee had, in fact, already preferred appeals being ITA Nos. 3649 and 3650/Mum/2025, which stand fixed for hearing on 03.02.2026. Thus, the premise on which the Revenue’s appeals were finally disposed of was founded on an incorrect assumption of fact. 4. On a careful perusal of the records, it emerges that the reassessment proceedings under section 147 were initiated on the basis of information available on the ITBA portal alleging bogus purchases aggregating to ₹7,83,88,794. However, upon detailed examination of the material on record, the learned CIT(A) recorded a categorical finding that the total purchases effected by the assessee during the relevant year were only to Printed from counselvise.com MA Nos.284 & 285/Mum/2025 Spark Gems 3 the extent of ₹24,72,470, and accordingly restricted the addition to that limited amount. 5. While adjudicating the Revenue’s appeals, the Tribunal noted that, except for purchases of ₹24,22,474 from the parties in question, no other purchases were found to have been made at all, and thus, the larger allegation of bogus purchases stood negated on facts. In absence of any appeal by the assessee, the addition sustained by the learned CIT(A) was allowed to stand, and Revenue’s appeals were dismissed. 6. However, in view of the admitted position that the assessee’s appeals against the sustenance of the addition are already pending and fixed for hearing, it is evident that the matter requires holistic adjudication after hearing both sides in all connected appeals together. Principles of judicial propriety, procedural fairness, and avoidance of piecemeal adjudication clearly warrant recall of the Revenue’s appeals so that the entire controversy can be adjudicated comprehensively in one composite hearing. 7. In these circumstances, we are satisfied that there exists a manifest mistake apparent from the record within the meaning of section 254(2) of the Act, warranting recall of the earlier order. Accordingly, the Revenue’s appeals, including the connected appeal relating to penalty proceedings under section 271(1)(c), are recalled. All the matters are directed to be listed together with the assessee’s appeals on 03.02.2026, the date already fixed. Printed from counselvise.com MA Nos.284 & 285/Mum/2025 Spark Gems 4 8. In the result, both the Miscellaneous Applications filed by the assessee are allowed. Order pronounced on 9th January, 2026. Sd/- (MAKARAND VASANT MAHADEOKAR) Sd/- (AMIT SHUKLA) ACCOUNTANT MEMBER JUDICIAL MEMBER Mumbai; Dated 09/01/2026 KARUNA, sr.ps Copy of the Order forwarded to : BY ORDER, (Asstt. Registrar) ITAT, Mumbai 1. The Appellant 2. The Respondent. 3. CIT 4. DR, ITAT, Mumbai 5. Guard file. //True Copy// Printed from counselvise.com "