TaxTMI 
TaxTMI 
2025 (9) TMI 153
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....ulated conditions. 2) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC is not justified in confirming action of the ld. Assessing Officer completing assessment without supplying the material used against the appellant and without allowing cross-examination of persons whose statements were used in assessment order and thus, violating the principles of natural justice. 3) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC is not justified in confirming action of the ld. Assessing Officer making the addition of Rs. 1,80,84,701/- u/s.69C of the Act by treating genuine purchases as unexplained expenditure in the nature of bogus purchases. 4) In the facts and circumstances of the case and in law, the Ld. Commissioner of Income-tax (Appeals), NFAC is not justified in confirming action of Ld. Assessing Officer making addition of Rs. 23,31,540/- u/s.68 of the Act by estimating profit @12.50% of the genuine sales treated as bogus sales without fulfilling the stipulated conditions of sec. 68 of the Act. 5) In the facts and circumstances of the cas....
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....es); and (iii) M/s. Mayom Steels Ltd. However, as the assessee had failed to substantiate the authenticity of his claim of having entered into genuine purchase with the aforementioned parties, therefore, the latter held the total purchases made by the assessee aggregating to Rs. 1,80,84,701/-, viz. (i) Shri Gitesh Agrawal (Prop. of Abhishek Enterprises) : Rs. 1,31,07,841/-; and (ii) M/s. Mayom Steels Ltd. : Rs. 49,76,860/- as non-genuine and unexplained bogus purchases. Accordingly, the A.O made an addition of the entire amount of bogus purchases of Rs. 1,80,84,701/- as the assessee's unexplained investment u/s. 69C of the Act. Apart from that, the A.O holding a conviction that the assessee would have incurred expenditure/charges for procuring the accommodation entries, made an addition towards unexplained commission expenses of Rs. 90,423/- i.e. @0.5% of Rs. 1,80,84,701/- u/s. 69C of the Act. 5. Apropos the bogus sales aggregating to Rs. 1,86,52,321/- made by the assessee from two parties, viz. (i) Shri Abhishek Agrawal, (Prop. of Pratyush Steels): Rs. 11,12,969/-; and (ii) Shri Gitesh Agrawal (Prop. of Abhishek Enterprises): 1,75,39,352/-, the A.O made an addition @12.5% of th....
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....specific it Statements recorded Therefore, mere non-mentioning of the will not vitiate the proceedings. (ii) To explain the test of prejudice or the test of fair hearing. Reliance is placed on the decision of the Hon'ble Supreme Court in SBI Versus K Sharma 28. Reliance is also placed on the decision of the Hon'ble Supreme Court in SBI Versus M.J. James for the same proposition that prejudice should exist as a matter of fact or to be based upon the definite inference of likelihood of prejudice flowing through non observance of natural justice. It is submitted that none of the appellant have pleaded any prejudice caused to them and merely by stating that the report has not furnished to them nor the Director of the company was not been made available for cross examination would not suffice. Reliance is placed on the decision of the Hon'ble Division Bench of this Court in Kishanlal Agarwalla Versus Collector of Land Customs 29. This decision was pressed into service that as long as the party charged has a fair and reasonable opportunity to see, comment and criticize the evidence, statement or record on which the charge is being made against him, the demands and th....
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....aunched under Section 143(3) of the Act, the findings will not depend only upon the presumption, the onus of proof could not be cast entirely upon the revenue and such onus would shift on the revenue only if the assessee produced some material to show that what she states may be correct. (iv) The argument of the appellant is that despite specific written request made on behalf of the assesse to provide those persons from whom statements were recorded on oath to be cross examined. There is no dispute to the fact that the statement said to have been recorded during the course of Survey has not been furnished to the appellant and the request made for cross examining of those persons was not considered. The question would be as to whether the noncompliance of the above would render the assessments bad in law. The argument of the revenue is that the assessments cannot be held to be illegal merely on the grounds that the cross examination was not happened as the assessing officer have clearly mentioned as to the nature of investigation done by the department and as the report itself states that the investigation commenced not from the appellant end but the individuals who dealt ....
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....used. Where procedural and/or substantive provisions of law embodied the principles of natural justice, their infraction per-se does not lead to invalidity of the order passed. The prejudice must be caused to the litigant, except in the case of a mandatory provision of law which is conceived not only in individual interest but also in public interest. The investigation has not commenced from the individuals but it has commenced who had dealt with accommodation entry providers, concept of working backwards. This is a very significant factor to be remembered. The endeavour of the department is to examine the "modus operandi adopted and in that process now seek to identify the appellant who have benefited on account of such "modus operandi". Therefore, considering the factual scenario no prejudice has been established to the appellant by not making the persons available for cross examination. (viii) While on this issue, we need to consider as to whether and under what Circumstances the right the right of cross examination can be demanded as a vested right. In Kishanlal Agarwalla, the Hon'ble Division Bench of Calcutta High Court has pointed out that no natural justice require....
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.... out that it is a fundamental principle of law that prove of an allegation levelled against a person may be in the form of direct substantive evidence or as in many cases such proof may have to be inferred by a logical process of reasoning from the totality of the attending facts and circumstances surrounding the allegations/charges made and levelled. It was further held that direct evidence is a more certain basis to come to a conclusion yet in the absence thereof the courts cannot be helpless. It was further pointed out that it is the judicial duty to take note of the immediate and proximate facts and circumstances surrounding the events on which the Charges/allegations are founded and to reach what would appear to the Court to be a reasonable conclusion therefrom. The test would always be that what Inferential process that a reasonable/prudent man would adopt to arrive at a conclusion, when over a period of time such dubious transactions have been made between the same set of accommodation entry providers, a conclusion can be reasonably reached that there is a concerted effort on the part of the stake holders concerned to indulge in synchronized fictitious trade transactions. Di....
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....re noted as dismissed. Hence, the Assessment Order is upheld and the ground is noted as dismissed. In the end result, the appeal is DISMISSED." 8. The assessee being aggrieved with the order of the CIT(Appeals) has carried the matter in appeal before us. 9. We have heard the Ld. Authorized Representatives of both the parties, perused the orders of the lower authorities and the material available on record as well as considered the judicial pronouncements that have been pressed into service by the Ld. AR to drive home his contentions. 10. Shri Yogesh Sethia, Ld. Authorized Representative (for short 'AR') for the assessee, at the threshold of hearing has assailed the validity of the assessment that was framed by the A.O vide his order passed u/s. 147 r.w.s. 144B of the Act, dated 24.03.2023. Elaborating on his contention, the Ld. AR submitted that as the A.O had vide his notice issued u/s. 148A(b) of the Act, dated 21.03.2022 allowed insufficient time of 6 days to the assessee to furnish his reply to the queries and put forth an explanation as to why a notice u/s. 148 of the Act may not be issued to him, therefore, the same not being as per the mandate of law cannot....
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....why based on the information shared with him a notice u/s.148 of the Act be not issued to him. However, we find, that in the present case, the A.O vide notice u/s 148A(b) of the Act, dated 21.03.2022 by calling upon the assessee to show cause on or before 27.03.2022 that as to why notice u/s 148 of the Act be not issued to him had effectively allowed to him a time period of only 6 days to file his explanation. 14. As stated by the Ld. AR, and rightly so, the notice u/s 148A(b) of the Act, dated 21.03.2022 is not found to be in conformity with the mandate of law. We find, that Hon'ble Jurisdictional High Court of Chhattisgarh in the case of MM Wonder Park Private Limited vs. Union of India & Others, passed in Writ Petition (T) No.172/2022, dated 17.06.2022, had observed, that the A.O in the case before them had issued a show cause notice u/s 148A(b) of the Act giving just 7 days' time to the assessee company/petitioner to file its reply. The Hon'ble High Court, observed that the time period of 7 days provided to the assessee company vide notice u/s 148A(b) of the Act was unreasonably short, and thus, violative of principles of natural justice. Accordingly, the Hon'ble High Court ....