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Judgment
PER YOGESH KUMAR, U.S. JM:
The present appeal is filed by the Assessee against the order of Ld. Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre (‘Ld. CIT(A)/NFAC’ for short), New Delhi dated 24/07/2025 for the Assessment Year 2012-13.
The grounds of Appeal are as under:-
“1.That the order passed by Ld. CIT(A) is bad in law and against the principals of Natural Justice as the documentary evidences submitted by appellant have completely been disregarded, accordingly, deserves to be quashed.
2.The Ld. CIT(A) erred by exclusively relying upon the findings of the Investigation Wing and the Verification Unit (VU) report to uphold the Assessing Officer's addition, thereby demonstrating that only the department's side was heard, which is impermissible under law.
3.That the Ld. CIT(A) is not justified in making an addition of Rs. 1,97,02,535/- on account of unexplained cash credit u/s 68 by invoking provisions of section 115BBE of the Income Tax Act 1961, this addition being arbitrary and contrary to the facts and provisions of law and is liable to be deleted.
4.That the Ld. CIT(A) erred in not considering the appellant's plea that the sale transactions were duly recorded in books of accounts and the profit element thereon was already offered for taxation, thereby resulting in double taxation which is against established principles of tax law.
5.Without prejudice to the above, if any addition is to be sustained, it should be restricted to the profit margin only and not the entire sale proceeds.
6.That Ld. CIT(A) erred in not ensuring consistency in the appellant’s assessments across years, the same principles accepted in earlier years were departed from without any change in facts or discovery of new material, violating the principle of uniformity in assessment.”
Brief facts of the case are that, information has been shared to the A.O. through insight portal that the Assessee has entered into financial transaction involving bogus sales during the year under consideration with a non-existent entity i.e. M/s Baan Ganga Impex which has been formed to be involved in the fraudulent ITCon the basis of fake invoices/bills without undertaking any actual supply of goods and services as detected by the CBIC, Delhi, and the Income Tax (Investigation). The Jurisdictional Assessing Officer had reason to believe that the receipt from the above sale has escaped assessment within the meaning of Section 147 of the Act, therefore, an order u/s 148A (d) of the Act came to be passed and a notice u/s 148 of the Act was issued. An assessment order came to be passed u/s 147 r.w. Section 144B of the Act on 21/02/2024 by making an addition of Rs. 1,97,02,535/-u/s 68 read with Section 115BBE of the Act. Aggrieved by the assessment order dated 21/02/2204, Assessee preferred an Appeal before the Ld. CIT(A). The Ld. CIT(A) vide order dated 24/07/2025, dismissed the Appeal filed by the Assessee by confirming the addition made by the A.O. As against the order of the Ld. CIT(A), Assessee preferred the captioned Appeal on the grounds mentioned above.
The Ld. Assessee's Representative submitted that the Ld. CIT(A) committed gross error exclusively relying upon the findings of the Investigation Wing and the verification unit to uphold the assessment order and failed to consider the fact that the managing partner of M/s Baan Ganga Impex has passed away during the Covid period due to which physical enquiry at the premises could not be conducted. Further contended that the Lower Authorities have not considered the evidences placed by the Assessee before them and ignoring the material evidence on record in amounts to violation of principals of natural justice. Thus, sought for allowing the Appeal.
Per contra, the Ld. Department's Representative relying on the orders of the Lower Authorities sought for dismissal of the Appeal.
We have heard both the parties and perused the material available on record. The Ld. CIT(A) while upholding the addition observed that the purchaser namely Baan Ganga Impex was not found in the given address and further observed that, though the transactions have been made through banking channel, Assessee failed to provide the satisfactory explanation of physical existence of the purchaser. It is the case of the Assessee that the managing partner of the Baan Ganga Impex Sh. Rakesh Sharma passed away during the Covid period, therefore, physical enquiry at the premises could not be conducted. The said contention of the Ld. Assessee's Representative cannot be accepted because, under the Indian Partnership Act, 1932, the death of a managing partner does not always mean the "death" (dissolution) of the firm, therefore, the explanation.
It is also the case of the Assessee that, the Assessee has produced complete documentary evidence during the appellate proceeding including financial statements, sales and purchase invoices, transport documents, confirmed ledger accounts and bank statements evidencing receipt of sale consideration through banking channels, but those documents claimed to have been not considered by the Ld. CIT(A). We have gone through the impugned order of the Ld. CIT(A), however, there is no such reference of production of those documents much less consideration of the same. Considering the overall circumstances, we deem it fit to remand the matter to the file of the Ld. CIT(A) with a liberty to the Assessee to produce all the documents in accordance with law in support of her claim including the confirmation of the purchaser and if such documents are produced before the Ld. CIT(A),the Ld. CIT(A) is directed to consider the same as per law and decide the issue afresh after providing opportunity of being heard to the Assessee. Accordingly, we allow the Ground No. 1 of the Assessee.
Since, we have allowed the Ground No. 1 of the Assessee and restored the Appeal to the file of the Ld. CIT(A), other grounds of Appeal require no adjudication, which are kept open to be decided by the Ld. CIT(A).
In the result, Appeal of the Assessee is partly allowed for statistical purpose.