Tribunal allows appeals for assessment years 2009-12. Reassessment quashed, appeals allowed on merits.

The tribunal allowed the appeals for the assessment years 2009-10, 2010-11, and 2011-12. The reassessment for 2009-10 was quashed due to non-service of notice under section 143(2). The appeals for 2010-11 and 2011-12 were allowed on merits regarding the disallowance of bogus purchases.

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Issues Involved:

1. Assumption of jurisdiction under section 147 of the Income-tax Act, 1961.
2. Non-service of notice under section 143(2) within the prescribed time.
3. Disallowance on account of bogus purchases.

Detailed Analysis:

1. Assumption of Jurisdiction under Section 147 of the Income-tax Act, 1961:

The assessee challenged the assumption of jurisdiction under section 147 of the Act. The case was reopened based on information from the Sales Tax Department of Maharashtra, which was passed on to the Assessing Officer (AO). The AO issued a notice under section 148, and the assessee responded by stating that the original return should be treated as a response to the notice under section 148.

2. Non-service of Notice under Section 143(2) within the Prescribed Time:

The assessee raised a crucial ground that the notice under section 143(2) was not served before the completion of assessment proceedings within the prescribed time. The tribunal found that the AO did not have proof of service of notice under section 143(2) for the assessment year 2009-10. This was confirmed by a letter from the AO dated November 20, 2019. The tribunal cited the Supreme Court decision in CIT v. Laxman Das Khandelwal, which held that non-issuance of notice under section 143(2) is a jurisdictional defect and cannot be cured by section 292BB of the Act. Consequently, the reassessment for the assessment year 2009-10 was quashed, and other grounds were not addressed as they became academic in nature.

3. Disallowance on Account of Bogus Purchases:

For the assessment years 2010-11 and 2011-12, the assessee challenged the disallowance made on account of bogus purchases. The purchases were made from M/s. Dimple Enterprises, a party listed as a tainted dealer by the Sales Tax Department. The AO issued a notice under section 133(6) to the supplier, which was served but not responded to. The assessee provided all relevant documents, including purchase bills, delivery challans, and bank statements showing payments by account payee cheques. Despite this, the AO disallowed the purchases, estimating the gross profit at higher percentages.

The tribunal noted that the assessee had discharged its onus by providing all necessary documents and that the non-response to the notice under section 133(6) by the supplier should have led the AO to issue a summons under section 131. The tribunal found no adverse inference on the documents provided by the assessee and cited the Bombay High Court decision in Pr. CIT v. Vaman International P. Ltd., which held that without corresponding purchases, sales could not have been made. The tribunal concluded that no addition could be made on account of alleged ingenuine purchases and allowed the appeals for both years on merits. The grounds challenging the assumption of jurisdiction under section 147 were left open.

Conclusion:

The tribunal allowed the appeals for the assessment years 2009-10, 2010-11, and 2011-12, quashing the reassessment for 2009-10 due to non-service of notice under section 143(2) and allowing the appeals for 2010-11 and 2011-12 on merits regarding the disallowance of bogus purchases.

Summary Table:

| ITA No. | AY | Appeal By | Result |
|----------------|----------|-----------|---------|
| 5204/Mum/2018 | 2009-10 | Assessee | Allowed |
| 5205/Mum/2018 | 2010-11 | Assessee | Allowed |
| 5206/Mum/2018 | 2011-12 | Assessee | Allowed |

Order pronounced on November 25, 2021, by way of proper mentioning in the notice board.

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