Tribunal grants relief on non-genuine purchases, allows appeal despite delay

The Tribunal partially allowed the appeal, granting relief on the disallowance of non-genuine purchases. The delay in filing the appeal was condoned due to technical issues, allowing the case to proceed. Concerns regarding the validity of re-opening the case under section 147 of the Income Tax Act were addressed, focusing on the legality of the reassessment proceedings. The Tribunal directed the Assessing Officer to verify the gross profit for taxation, limiting the disallowance to 3% of the estimated gross profit in alignment with industry standards.

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Issues involved:
1. Condonation of delay in filing the appeal.
2. Validity of re-opening the case under section 147 of the Income Tax Act.
3. Disallowance made on account of non-genuine purchases.

Condonation of delay in filing the appeal:
The appeal challenging the order dated 15/06/2022 was delayed by 101 days. The assessee sought condonation of delay, attributing it to a misunderstanding regarding online filing due to technical issues. The Tribunal noted that the appeal filing fees were paid within the limitation period, indicating the intention to file timely. Considering the submissions and affidavit, the delay was condoned, allowing the appeal to proceed on merits.

Validity of re-opening the case under section 147 of the Income Tax Act:
The appeal raised concerns about the re-opening of the case for the assessment year 2011-12 under section 147. The Assessing Officer initiated proceedings based on information from the Investigation Wing without conducting independent inquiry. The Tribunal addressed the grounds challenging the initiation of proceedings, which were not pressed during the hearing. The issue focused on the legality of re-assessment proceedings and the formation of prima facie opinion for income escapement.

Disallowance made on account of non-genuine purchases:
The dispute centered on disallowance of purchases from M/s Mayank Impex, treated as bogus by the Assessing Officer. The appeal contested the disallowance and partial relief granted by the CIT(A). The Tribunal considered the profit element based on industry standards and directed the Assessing Officer to verify the gross profit offered for taxation by the assessee. Relief was granted by restricting the disallowance to 3% of the estimated gross profit, aligning with the Task Force recommendations for the diamond industry.

In conclusion, the Tribunal partially allowed the assessee's appeal concerning the disallowance of non-genuine purchases, while addressing issues related to delay condonation and the validity of re-opening the case under section 147 of the Income Tax Act. The decision provided detailed analysis and considerations based on legal provisions and industry standards, ensuring a comprehensive resolution of the contested grounds.

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