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Judgment
PER SUDHIR KUMAR, JUDICIAL MEMBER:
This appeal by the assessee is directed against the order of the National Faceless Appeal Centre (NFAC) Delhi [hereinafter referred to as “Ld. NFAC)”] vide order dated 25-11-2025 pertaining to A.Y. 2019-20 arising out the assessment order dated 19-03-2025 u/s.147 r.w.s. 144/144B of the Income-tax Act, 1961, (in short ‘the Act’).
The assessee has raised the following grounds in appeal;
1.On the facts and circumstances of the case assessment order under section 147r.w.s. 144 read with section 144B of the Income Tax Act, 1961(“the Act”) passed by the Assessment Unit, Income Tax Department(hereinafter referred to as “AU, ITD”) is bad both in the eyes of law and on facts.
2.On the facts and circumstances of the case, the AU, ITD has erred both on facts and in law in passing the assessment order without providing the assessee reasonable opportunity of being heard is clear violation of the principle of natural justice.
3.On the facts and circumstances of the case AU, ITD erred both on facts and in law in assessing the business income at Rs.1,36,23,290/- as against the returned income of Rs.1,11,27,898/- declared by the assessee.
4.On the facts and circumstances of the case AU, ITD erred both on facts and in law in disallowing the business promotion expenses worth Rs.24,95,288/- alleged to be as the bogus purchases made through bogus entities controlled by Gurdeep Singh (Pan: ASYPS3975Q) while the fact is Gurdeep Singh was never known to the assessee and making an addition of Rs. 24,95,388/- under the head” income from other sources. The disallowances has been made despite of the fact that this expenditure has been incurred wholly and exclusively for the purpose of business and hence are allowable under the Income Tax Act.
5.On the facts and circumstances of the case AU, ITD erred both on facts and in law in ignoring the copies of bills statement of accounts bank statements GST returns, Audited financials past and future trend of the business and invoking section 69C read with section 115BBE of the Income Tax Act.
6.On the facts and circumstances of the case AU, ITD erred both on facts and in law in making the abovesaid addition by indulging in surmises without bringing on any direct evidence against the assessee, only on the basis of presumptions and assumptions.
7.On the facts and circumstances of the case AU, ITD erred both on facts and in law in charging interest under section 234B of the Act.
8.That the Appellant craves leave to add, amend or alter any of the grounds of appeal.
The brief facts of the case are that the assessee is a firm and filed its return of income for A.Y.2019-20 on 30-10-2019. In the case of the assessee information was available on Insight Portal which was uploaded by DDIT(Inv), Mumbai that the assessee was one of the beneficiaries of bogus purchases and sale transactions through entities controlled by Gurdeep Singh. Therefore, notice u/s 148 of the Act was issued for escape assessment amounting to Rs.2495,388/-. Various notices were issued to the assessee but no response was filed by the assessee. The Assessing Officer completed the assessment after making the addition of Rs.24,95,388/- under section 69C of the Act.
Aggrieved the order of the AO the assessee preferred the appeal before the Ld. NFAC who vide his order dated 25-11-2025 dismissed the appeal. Being aggrieved the order of the Ld. NFAC the assessee is in appeal before the Tribunal.
The Ld. AR of the assessee submitted that the opportunity of being heard was not provided by the lower authorities. The Learned authorized representative for Department of Revenue submitted that departmental authorities have passed reasoned orders. He also submitted that the assessee has not taken part in the proceedings before the lower authorities. The appeal was rightly rejected by the Ld. NFAC.
We have heard the rival contentions and perused the material available on record. It is an admitted fact that despite opportunities granted by Lower authorities, the assessee did not file his submissions, for which the Assessing officer completed the assessment ex-parte and appeal was also dismissed ex-parte by the Ld. NFAC.
Since in the instant case the assesse has failed to file his submission after availing the various opportunities. The assessee did not appear before the lower authorities. The ld. AO framed the ex-parte assessment and Ld. NFAC also dismissed the appeal ex-parte. The appeal should have been decided on merit as per the provision of the section 250 of the Act. The appeal was decided ex-parte without giving the opportunity of being heard to the assessee. Therefore, considering the totality of the facts and circumstances of the case and in the interest of justice, we deem it proper to restore the issue to the file of the Ld. AO with a direction to grant one final opportunity to the assessee to substantiate its claim and decide the issue as per fact and law. The assessee is also directed to appear before the Ld. Assessing officer and co-operate in the proceedings. The grounds raised by the assessee are accordingly allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.