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Judgment
Per Kavitha Rajagopal, JM:
This is an appeal filed by the assessee challenging the order passed by the Ld. Commissioner of Income Tax (Appeals) [‘the Ld. CIT(A)’, for short] under Section 250 of the Income Tax Act, 1961 ('the Act' for short) for Assessment Year (‘AY’, for short) 2016-17.
The assessee has raised the following grounds of appeal:-
“1.On the facts and circumstances of the case, and in law, the order passed by the Ld. Principal Commissioner of Income-tax (Appeals), Delhi-31 [hereinafter referred to as "Ld. CTT(A)" is bad in law.
1.1.The Ld. CIT(A) has erred in law, and on facts, in dismissing the appeal of the assessee stating that the assessee did not comply with the notices issued by the Lal. CIT(A).
1.2.The Ld. CIT(A) has erred in law, and on facts, in not deciding the issues ground wise in respect of various grounds of appeal raised by the assessee.
2.Without prejudice to the above, the Id. CIT(A) has erred in law, and on facts, in not adjudicating on merits following grounds raised by the assessee:
2.1.On the facts and circumstances of the case, the order passed by the Ld. Assessing Officer (AO) is arbitrary, illegal, bad in law as the order has been passed ignoring the relevant and clinching evidences filed by the assessee.
2.2.The 1d. AO has erred in law and facts of the case in not making available and not affording the assessee an opportunity to submit its response against the evidence, being survey report, relied upon by the Ld. AO for the purpose of assessing the income of the assessee and thus has violated the principles of natural justice.
2.3.The proceedings having been initiated by the Income Tax Officer, Ward 55(4) were transferred to and completed by Income Tax Officer, Ward 8(1) in disregard to the provisions of section 127 of the Income-tax Act, 1961 and therefore, the order is void being passed without proper jurisdiction
2.4.The Ld. AO has erred in law and facts in making an addition under section 68 of the Income tax Act, 1961 which is not at all applicable under the circumstances of the case as narrated by the 1.d. AO himself.
2.5.The Ld. AO has erred in law and facts of the case in holding the purchase amounting to Rs. 4,95,61,848/- as bogus and unexplained merely on the ground that assessee was not able to produce the parties during the assessment proceedings and by ignoring the other clinching evidences (e.g. bank statements, broker confirmation, purchase bills/invoices, PAN/TAN, purchase order, goods inward/outward etc. etc.) filed by the assessee.
2.6.Without prejudice to ground above, the Ld. AO has erred in law and on facts in making addition of gross amount of alleged bogus purchases instead of restricting the addition to the extent of difference between gross profit declared by the assessee on normal purchase vis-à-vis allegedly bogus purchase.
2.7.The Ld. AO has erred in law and on facts in not allowing the set off of carried forward business loss against the addition made of Rs. 4,95,61,848/-.
2.8.The Ld. ITO has erred in law in levying interest u/s 234B of the Income-tax Act
2.9.The Ld. ITO has erred in law and on facts of the case in initiating penalty proceedings against the assessee under section 271(1)(c) of the Income-tax Act.
3.The Appellant craves leave to add, delete, withdraw, and modify any/all grounds of appeal at a later stage.”
Brief facts are that the assessee company was engaged in processing and supply of various varieties of rice and trading of rice and had filed its return of income for the year under consideration dated 29.11.2016 declaring total income at Rs.nil. The assessee’s case was selected for complete scrutiny through CASS for the reason of: “low income in comparison to high loans/advances/investments, large other expenses claimed in P& LA/c, large current liabilities in comparison to total asset, large investment in property as compared to total income, gross total income is less the value of foreign remittance sent, large international transaction, large value of international transaction having a bearing of profits income, losses or asset of the assessee with associated enterprise and large value of international transaction in the nature of guarantee”.
The Ld. AO issued notices u/s 143(2) and 142(1) of the Act which were duly issued and served upon the assessee. The Ld. AO, after duly considering the submissions of the assessee, passed the assessment order u/s 143(3) of the Act dated 22.11.2019 determining the total income at Rs.4,95,61,848/-, after making an addition of Rs.4,95,61,848/- u/s 68 of the Act towards bogus purchases which were not substantiated by the assessee with supporting documentary evidences. Aggrieved, the assessee was in appeal before the first appellate authority, who, vide order dated 22.04.2026, dismissed the appeal filed by the assessee for non-prosecution. Aggrieved, the assessee is in appeal before us challenging the order of the Ld.CIT(A).
We have heard the rival contentions and perused the relevant material on record. It is observed that the assessee has been non-compliant to about seven notices issued by the Ld.CIT(A), who, then, passed an ex parte order dismissing the appeal filed by the assessee. Before us, the Ld. AR for the assessee contended that the assessee had genuine hardship and, hence, he was unable to comply with the proceedings before the Ld.CIT(A). The Ld. AR further stated that non-compliance on the part of the assessee was neither wilful nor wanton and prayed that the assessee be given one more opportunity to present its case before the Ld.CIT(A). The Ld. DR vehemently opposed setting aside of the issue to the file of the Ld.CIT(A) for the reason that the assessee has not complied with the proceedings in spite of several opportunities being granted.
On the above facts of the case, we deem it fit to extend the assessee with one more opportunity to present its case before the first appellate authority by adhering to the principles of natural justice and in the interest of justice dispensation. The assessee is directed to strictly comply with the proceedings before the Ld.CIT(A) without any undue delay from its side and the Ld.CIT(A) shall adjudicate the issue de novo on the basis of the submissions made by the assessee and decide the issues on the merits in accordance with law. Hence, the grounds of appeal raised by the assessee are allowed for statistical purpose.
In the result, the appeal filed by the assessee is hereby allowed for statistical purpose.