VINOD GUPTA,DELHI V. DCIT,CIRCLE 10(1), DELHI

ITA 6113/DEL/2024

AI Insights

The case involves Vinod Gupta, the appellant, contesting the orders of the National Faceless Appeal Centre (NFAC), Delhi, which sustained the additions made by the Assessing Officer (AO) regarding alleged bogus purchases and other disallowances. The primary issues revolved around the alleged non-compliance of the assessee during the appellate proceedings and the jurisdiction of the AO. The Tribunal found that the CIT (A) had erred in dismissing the appeal solely on non-compliance without adjudicating on the merits, and also noted the procedural lapses in serving notices to the assessee.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 126938 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-04-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: H
• Assessment Year: 2015-2016
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: JITENDRA SINGH
• Assessee Lawyers: NITIN GULATI
• Keywords: Bogus purchase; Principle of natural justice; Non compliance; Bogus
• Section: 143(1); 40A(3); 40(a)(ia)

Judgement Text

"IN THE INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH: ‘H’: NEW DELHI) BEFORE SHRI RAMIT KOCHAR, ACCOUNTANT MEMBER AND SHRI SUDHIR PAREEK, JUDICIAL MEMBER ITA No:-6113/Del/2024 (Assessment Year- 2015-16) Vinod Gupta 212, Tower 6, Narmada Apartments, D6, Sector C, Pocket 9, Vasant Kunj, South West Delhi Vs. DCIT, Circle 10(1) CR Building New Delhi PAN No:AHTPG1451D APPELLANT RESPONDENT Assessee by :Shri Nitin Gulati Adv Revenue by :Shri Jitendra Singh Sr. DR Date of Hearing :23.04.2025 Date of Pronouncement :23.04.2025 ORDER PER SUDHIR PAREEK, JM Aforetitled appeal by Assessee is preferred against the order of National Faceless Appeal Centre, (NFAC), Delhi [for short hereinafter referred to as the “(Ld. CIT(A)”] dated 23.09.2024 for Assessment Year 2015-16, on the following grounds of appeal: - ITA No.- 3708/Del/2024 Sh. Arun 2 “ 1.) That on the facts and in the circumstances of the case and in law, Ld. CIT-A erred in sustaining the order passed by Ld AO in making additions of Rs 3,45,91,487/-being estimating extra profit @ 12.5% on purchases taken as bogus, without assigning any reason and without following any procedure due to which the Assessment Order is bad in law, void-ab-initio and is liable to be quashed 2) That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in sustaining the order passed by Ld in making additions of Rs 274249/- being disallowing u/s 40(a)(ia) and Rs 641000/-u/s 40A(3) and Rs 123567/-on account of late payment of GST Charges without assigning any reason and without following any procedure due to which the Assessment Order is bad in law, void-ab-initio and is liable to quashed 3) That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in sustaining the order passed by Ld AO, without giving due opportunities to the assesse, as the hearing notices were not served to the appellant. Moreover, the Ld CIT(A) has not been served by post and or by email, due to which, the appeal was not filed in due time. Hence requested to condone the delay in filing the present appeal by the appellant and the matter may please be restored to the file of Ld CIT(A), as a part of principles of natural justice 4) That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in sustaining the order passed by Ld AO [ITO- Faridabad) is erred in law and facts as the ITO Faridabad is Non Jurisdictional Assessing Officer, as the jurisdictional lies with ITO- Delhi; and the assumption of jurisdiction by Ld AO [ITO-Faridabad) is invalid 5) That on the facts and in the circumstances of the case and in law, Ld CIT-A erred in sustaining the order passed by Ld AO [ITO- Faridabad) by accepting corresponding sales which were made out of purchases which have been assessed as bogus purchase. Moreover, no movement of cash has been brought on record, had these purchases are bogus. The assesse is not having any humongous resources to generate such a huge cash. No unaccounted asset or anything have been brought on record which has been generated had these purchases are bogus because bogus purchases will always generate the cash, which has never been brought on record ITA No.- 3708/Del/2024 Sh. Arun 3 2. Facts of the case may be summarised as that the assessee filed return of income declaring total income of Rs 20,57,570/- for AY 2015-16 which was processed u/s 143(1) of the Act at the returned income itself. Thereafter the case was selected for scrutiny under CASS and in persuation thereof notice u/s 143(2),142(1) of the Act dated 27-07-2016,15-06-2016 issued and served upon assessee and at the time of completion of assessment proceedings total income of Rs 1,56,79,180 was computed. By aggrieving with the same the assessee/ appellant filed appeal which was not allowed by the Learned CIT (A) and hence assessee before us by preferring instant appeal for adjudication. 3. Heard rival submissions and carefully scanned the material on record. 4. In the course of hearing, the Learned AR reiterating the grounds of appeal submitted that the Learned CIT (A) erroneously dismissed the appeal for alleged non compliance which is contrary to the principal of natural justice and failed to adjudicate on merits of the case. ITA No.- 3708/Del/2024 Sh. Arun 4 5. Per Contra, The Learned DR relied upon orders passed by both lower authorities . 6. Vide impugned order the Learned CIT (A) observed that notices on different occasions were issued to the assessee/appellant but no any reply furnished on behalf of assessee and it seems that assessee/appellant remained reluctant to persue the appeal . In such a situation , the Learned CIT (A) inclined to decide the appeal ex parte and consequently in the absence of reply/ substantial evidence the first Appellate authority confirm both the additions in question i.e. Rs 65,21,609/- and 71,00,000/- . 7. The Learned AR submitted that the order dated 23-09-2024 passed by the CIT (A) was communicated to assessee on 28-12- 2024 and he was primarily engaged in business activities in Dubai where he residing and conducted operations . Further submitted that being based in Dubai , was relied upon AR in India to handle the appeal proceedings . It was also submitted that due to failure of AR in informing about the necessity and timelines for filing the appeal and such a lack of communication resulted in the appeal not being filed within the prescribed period. ITA No.- 3708/Del/2024 Sh. Arun 5 8. The Learned AR also submitted that upon realizing the lapse the assessee immediately terminated the services of AR and took steps to prepare and file the appeal personally and taken all necessary actions to avoid such lapse in the future,so the delay in filing the appeal neither deliberate nor intentional but caused due to reasons beyond control. Above submissions supported by affidavit and relevant documentary evidences like photocopies of passport entries etc of assessee/appellant Vinod Gupta. 9. The Learned CIT (A) confirmed the addition in question solely on the basis of non-compliance of assessee/appellant during Appellate proceedings and in such a scenario there is material question arises before us that whether the Learned CIT (A) was justified in deciding appeal in such a manner. As per the provisions of section 250(6) of the Act, the Learned CIT (A) is under legal obligation to decide the appeal on its merits by stating the points for determination , the decision thereon and the reason for the decision. In the course of hearing before us, the Learned AR explained the reasons for alleged non compliance of the assessee before first appellate authority , which seems to be genuine and trustworthy we are of the considered view that the assessee was prevented by sufficient cause ITA No.- 3708/Del/2024 Sh. Arun 6 in aforesaid non compliance. It is established principal of law that the rules of procedure just handmaid for administrative of justice and not to penalize anybody and whatever it is, matter should be decided on its merits and without adopting the way of technicalities. 10. On the basis of foregoing fact situation and also in the interest of justice , we are of the considered view that if assessee granted one more opportunity to defend him , object of justice will be served to some extent and so we are inclined to remit the matter back to the Learned CIT (A) with the direction to decide afresh after providing sufficient and meaningful opportunities to assessee and simultaneously the assessee will be cooperative in proceedings without sought unnecessary adjournments. 11. Consequently , appeal of the assessee allowed as indicated above for statistical purpose. Order pronounced in the Open Court on 23.04.2025. Sd/- Sd/- (RAMIT KOCHAR) (SUDHIR PAREEK) ACCOUNTANT MEMBER JUDICIAL MEMBER Dated: 30/04/2025 Pooja/NEHA, Sr. PS "