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Judgment
ORDER
Per Kavitha Rajagopal, J M:
These appeals are filed by the assessee, challenging the order of the Learned Commissioner of Income Tax (Appeals) [‘Ld. CIT(A)’ for short], passed u/s. 250 of the Income Tax Act, 1961 (‘the Act', for short), pertaining to the Assessment Years (‘A.Y.s’ for short) 2015-16 & 2016-17.
As the facts are identical, we pass a consolidated order taking ITA No.2978/Del/2026 as a lead case.
The assessee has raised the following grounds of appeal:-
“1.Ground No. 1 - Invalid order of the CIT(A) That on the facts and circumstances of the case and in law, the learned Commissioner of Income-tax (Appeals) has erred in dismissing the appeal of the appellant without properly adjudicating the grounds raised and without passing a reasoned order on merits as mandated under section 250(6) of the Income-tax Act, 1961, thereby rendering the impugned order legally unsustainable.
Ground No. 2 – Violation of principles of natural justice That the learned CIT(A) has erred in confirming the addition merely on the ground of alleged service of notices through email/SMS without ensuring effective and proper opportunity of hearing to the appellant and without considering the evidences and explanations submitted by the appellant, thus violating the principles of natural justice.
Ground No. 3 - Addition based merely on MIS information For Rs.21,85,60,645.00 That the learned Assessing Officer and the learned CIT(A) have grossly erred in making and sustaining the addition solely on the basis of information received through MIS/third party data regarding alleged import purchases, without bringing any independent or corroborative evidence on record to establish that such transactions actually belong to the appellant.
Ground 4 : Improper Rejection under Rule 46A The learned CIT(A) erred in rejecting the additional evidence under Rule 46A, ignoring the fact that:
The additional evidence was admitted for remand, The Assessing Officer examined the same, No adverse inference was drawn on merits. Thus, rejection on technical grounds is unjustified.
Legal Position of Rule 46(A) It is a settled position that: Once remand report is called and evidence is
examined, The purpose of Rule 46A is fulfilled. Therefore, rejection of evidence thereafter is merely technical and unsustainable Ground 5: Ignoring Remand Report The learned CIT (A) grossly erred in ignoring the remand report submitted by the Assessing Officer, wherein the evidences furnished by the assessee were duly verified and found acceptable on merits.
Ground No. 6 - No evidence of imports attributable to the appellant That the authorities below have failed to establish even a single documentary evidence linking the alleged import transactions with the appellant's PAN, and therefore the addition based merely on presumption and unverified information is arbitrary, illegal and liable to be deleted.
Ground No. 7 - Absence of evidence of sales or business activity That the learned Assessing Officer has failed to bring on record any evidence of sales, turnover, business receipts or trading activity arising from the alleged imports and therefore the assumption that the appellant carried on large-scale transactions is wholly unfounded and contrary to law.
Ground No. 8- No evidence of payment of import duty or financial trail That the impugned addition has been made without establishing: any customs documents, bill of entry, payment of import duty, bank remittances, or financial trail of payments, and therefore the conclusion drawn by the Assessing Officer that the appellant had undertaken huge import transacfjonsis purely speculative and unsupported by evidence.
Ground No. 9 - Addition based on conjectures and assumptions That the addition sustained by the learned CIT(A) is based purely on assumptions, conjectures and unverified information, without establishing any taxable income in the hands of the appellant, which is impermissible under the provisions of the Income-tax Act, 1961.
Ground No. 10- Failure to determine real income That the authorities below have failed to determine any real income chargeable to tax, and the addition made merely on the basis of alleged purchases/import information without establishing corresponding sales or profit element is contrary to the basic charging provisions of the Act.
Ground No. 11 - Ignoring evidences and explanations That the learned CIT(A) has erred in ignoring the documentary evidences and explanations placed on record demonstrating that the alleged transactions do not pertain to the appellant, and therefore the impugned order is liable to be set aside.
Ground No. 12 – Prayer for deletion of addition That in view of the facts and circumstances of the case and the absence of any credible evidence linking the alleged transactions with the appellant, the entire addition made by the Assessing Officer and sustained by the learned CIT(A) deserves to be deleted in full.
General Ground The appellant craves leave to add, alter, amend, or withdraw any of the
above grounds of appeal at or before the time of hearing”
The brief facts are that the assessee is a partnership firm engaged in the business of trading in plastic material used in automobile industries and was dissolved on 30.06.2006 and had not filed its return of income for the year under consideration. The assessee’s case was reopened based on the information that during the year under consideration the assessee had undertaken imports valuing Rs.19,37,20,279/- and had paid Customs Duty of Rs.4,98,45,946/- aggregating to Rs.24,35,66,225/- for which no return of income was filed. Notices u/s 148 and 142(1) of the Act were issued to the assessee. The assessee had made no compliance before the Ld. AO and the Ld. AO, vide order dated 29.03.2022 passed the assessment order u/s 147 r.w.s. 144 of the Act being the best judgement assessment determining the total income at Rs.24,35,66,225/- after making addition u/s 69 of the Act as unexplained investment. Aggrieved, the assessee was in appeal before the First Appellate Authority, who, vide an ex parte order dated 22.01.2026, dismissed the appeal filed by the assessee. The Ld. CIT(A) upheld the addition made by the Ld. AO on the ground that the assessee has raised certain issues for the first time before the First Appellate Authority such as the alleged misuse of its PAN, without any corroborative evidences. Aggrieved, the assessee is in appeal before us challenging the order of the Ld.CIT(A).
We have heard the rival submissions and perused the material available on record. It is observed that the assessee has been non-compliant during the assessment proceedings where the Ld. AO passed an ex parte assessment order u/s 144 of the Act making additions u/s 69 of the Act. Before the Ld. CIT(A), the assessee has contended that the assessee firm was dissolved vide a Dissolution Deed dated 30.06.2006 for which the Ld.CIT(A) had sought for a remand report from the Ld. AO. The Ld. AO in his remand report has submitted that no proof of intimation of the dissolution was placed before the Ld. AO and, hence, the Revenue was unaware of the facts of dissolution. The Ld. CIT(A) rejected the assessee’s contention that its PAN was also misused for the reason that no documentary evidences were furnished in support of the assessee’s contention. The Ld. CIT(A) upheld the addition made by the Ld. AO on the ground that the assessee has failed to substantiate its claim. Before us, the Ld. AR for the assessee contended that the assessee be given one more opportunity to present its case before the Ld. AO for the reason that the assessee has got a good case on the merits. The Ld. DR vehemently opposed to the prayer of the assessee.
On the above facts of the case, we deem it fit to extend the assessee one more opportunity to present its case before the Ld. AO 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. AO without any undue delay from itis side and the Ld. AO shall pass a de novo assessment order on the basis of the submission of the assessee and on the evidences proposed to be filed by the assessee, on the merits and in accordance with the law. The grounds raised by the assessee are hereby allowed for statistical purpose.
In the result, the appeal filed by the assessee is hereby allowed for statistical purpose.
ITA No.2979/Del/2026 (AY : 2016-17)
Since the facts are identical, our decision in ITA No.2978/Del2026 as above would apply mutatis mutandis to this appeal and this appeal is also allowed for statistical purposes.
To sum up, both the appeals are allowed for statistical purposes.