TaxTMI 
TaxTMI 
2026 (6) TMI 724
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....essee has filed return of income originally u/s 139(1) for the assessment year 2018-19, on 24.09.2018, declaring income of Rs. 10,50,200/-. Specific information was flagged as per Risk Management Strategy formulated by the CBDT through ITBA software under the head 'High Risk CRI/VRU' cases. The AO observed that the assessee has declared purchases to the tune of Rs. 5,33,94,750/- and profit before tax at Rs. 11,66,031/-. The AO observed that the assessee has declared low profit as compared to gross receipts. On perusal of the information, the AO observed that one Mr. Rajesh Mittal was controlling and managing 19 firms along with his associates and bogus bills were issued without delivery of goods. Shri Bankey Bihari Enterprises 06AMCPJ6709R1ZK is one of the firm, and the assessee is beneficiary of bogus entries from the said concern. The Assessing Officer issued show cause notice under Section 148A(b) of the Act on 08.03.2022 to the assessee to file the reply, but the assessee did not file any response. The AO observed that the assessee has no proper explanation wrt to aforesaid bogus transactions, and hence there are reasons to believe that income to the tune of Rs. 10,08,759/- has....
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...., replies were not received, the AO disallowed the claim of purchases made by the assessee to the tune of Rs. 10,08,759/- from Shri Bankey Bihari Enterprises, and added the same to income of the assessee u/s. 69 of the 1961 Act, vide reassessment order dated 11.03.2023 passed by the AO u/s 147 r.w.s. 144B of the 1961 Act. It is pertinent to mention that assessment was framed under faceless assessment scheme. 3. Aggrieved, the assessee filed first appeal with ld. CIT(A). The assessee denied to have made bogus purchases, and instead claimed that the said purchases were genuine supported by bills, lorry numbers for movement of goods and payments were made through banking channel. The assessee submitted purchase bills and account statement. It was submitted that the goods were purchased through an agent Shri Pushpender to whom commission was also paid. It was submitted that it is quite possible that Shri Pushpender might have introduced fake bills. It was submitted that once sale is held to be genuine, then 100% purchases could not be disallowed. The assessee relied upon judicial precedents to support its contentions. The ld. CIT(A) observed that the assessment order has been passed....
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.... the matter back to the file of the ld. AO for framing denovo reassessment instead of deciding the issue on merits in accordance with law. It is pertinent to mention here that reassessment order was passed under faceless assessment regime. I have observed that that during the course of reassessment proceedings, the assessee has not submitted complete replies to the notices issued by the AO from time to time under Section 142(1) of the Act, and only part replies were submitted by the assessee before the AO. The non compliances by the assessee to the notices issued by the AO u/s 142(1) of the 1961 Act, led AO to issue SCN's u/s 144. The assessee did not submitted complete reply to the first Show Cause Notice's issued by the AO u/s 144 of the 1961 Act. There was non compliance to the second SCN issued by the AO. The details are enumerated in the para 2.2 above and are reproduced again even at the cost of repetition. The case of the assessee was reopened by the Revenue for framing reassessment within provisions of Section 147 of the Act on the ground that the assessee has taken accommodation entry amounting to Rs. 10,08,759/- with M/s Shree Bankey Bihari Enterprises. The Assessing Offi....
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....08,759/- towards bogus purchases remained unexplained, unverified and unaccounted for want of reversed Input tax credit. Since, replies were not received, the AO disallowed the claim of purchases made by the assessee to the tune of Rs. 10,08,759/- from Shri Bankey Bihari Enterprises and added the same to income of the assessee u/s. 69 of the 1961 Act, vide reassessment order dated 11.03.2023 passed by the AO u/s 147 r.w.s. 144B of the 1961 Act, under faceless assessment scheme. Thus, as per provisions of Section of Section 144 of the 1961 Act, if the notices issued u/s 142(1) remained un-complied with, the AO is mandated to issue SCN u/s 144 to the assessee, and noncompliance by the assessee to such SCN will enable/empowers AO to pass best judgment assessment u/s 144 of the Act. I have observed that Section 144B deal with faceless assessment regime. I have also observed that Section 144B(1) clearly stipulates that notwithstanding anything to the contrary in any other provision of the 1961 Act, the assessment, reassessment or re-computation u/s 143(3) or u/s 144 or Section 147, as the case may be, with respect to the cases referred to in Section 144B(2), shall be made in a faceless ....