Vijay Pal Rao ORDER
Vijay Pal Rao, Member (J)
1. This appeal by the assessee is directed against the order dated 08.08.2019 of CIT(A) for the assessment year 2006-07.
2. The assessee has raised the following grounds:-
"1. That in any view of the matter assessment made u/s 147/143(3) dated 30.03.2013 on income of Rs. 28,72,803/- is bad both on the facts and in law.
2. That in any view of the matter no notice u/s. 148 was served on the assessee therefore the allegation in the order is incorrect about the service of notice and likewise reasons were not provided before framing the order hence the entire assessment is illegal and invalid.
3. That any of the matter ld. CIT(A) was not correct in passing the order ex-parte without providing reasonable opportunity to the assessee when during pendency of appeal paper book was filed in the office but without considering the same the appeal was decided ex parte which is not a judicious action in the eyes of law.
4. That in any view of the matter addition of Rs. 11,87,228.00 on account of purchases as made by the Assessing Officer and confirm by CIT(A) is highly unjustified.
5. That any view of the matter the purchases of Rs. 11,87,228/- was made from 3 parties which was confirmed by respective parties but the accountant by oversight entered purchases of other parties twice and therefore the purchases could not be reconciled hence the addition made by Assessing Officer and confirmed by CIT(A) is highly unjustified.
6. That in any view of the matter the assessee reserves his rights to take any fresh ground of appeal before hearing of appeal.
It is therefore requested that following grounds may kindly be admitted and relief allowed accordingly."
3. The Assessing Officer while passing the order u/s. 147 r.w.s. 143 (3) has made an addition of Rs. 11,87,228/- on account of disallowance of purchases wrongly claimed by the assessee. The Assessing Officer conducted enquiry by issuing letters u/s. 133 (6) to the suppliers from whom the assessee, claimed to have made purchases. However, there was no response to the notice issued by the Assessing Officer and further the assessee has also not submitted the confirmation from some of the parties. Thus, the Assessing Officer treated the claim of purchases as bogus/wrong. The assessee challenged the action of the Assessing Officer before the Ld. CIT(A) however, despite the number of opportunities the assessee did not attended any of the hearing and consequently the Ld. CIT(A) has dismissed the appeal while passing the impugned ex-parte order.
4. Before the Tribunal, the Ld. AR of the assessee submitted that due to mistake on the part of the accountant of the assessee, some purchases entries from parties were entered twice instead of the correct entries from all the parties recorded in the books of account. Therefore, it was only a mistake on the part of the accountant, who recorded some purchases items twice instead of correct entries. The Ld. AR has further submitted that the assessee furnished all the bills, vouchers and correct details of the purchases made by the assessee but, the Ld. CIT(A) has not considered those correct purchases. He has also referred the details of the entries in respect of certain purchases and submitted that the correct details furnished by the assessee are required to be verified by the Assessing Officer. The Ld. AR has further submitted that the assessee has also furnished the confirmation from Sharda Steel however, the same has not been considered by the authorities below. Therefore, he has pleaded that the assessee be given one more opportunity to present its case before the Assessing Officer.
5. On the other hand, the Ld. DR has submitted that the assessee is a contractor and claimed certain purchases of raw material used in the construction work. The Assessing Officer find that the claim of the assessee is bogus and incorrect as the supplier has not confirmed the purchases as claimed by the assessee. Even the invoices produced by the assessee do not contain the GST. Despite 11 notices issued by the CIT(A), the assessee did not attend the proceedings, therefore the Ld. CIT(A) had no option but to pass the ex-parte order. He has relied upon the order of the authorities below.
6. I have considered the rival submissions as well as relevant material on record. It is manifest from the record that the assessee has not produced the supporting invoices for the claim of purchases as recorded in the books of account. The Assessing Officer also issued notices u/s. 133 (6) to M/s. Sharda Steel Industries, M/s. P.D. Enterprises and M/s. Sahib Brick Field requiring confirmation of transactions entered with the assessee during the year under consideration. In response to the notice u/s. 133 (6) a reply was received only from M/s. Sahib Brick Field, and there was no response or confirmation in respect of the other parties. The Assessing Officer accordingly treated the purchases to tune of Rs. 11,87,228/- as wrong claim of the assessee and has added same to the total income of the assessee. It is clear from the assessment order that there is a failure on the part of the assessee to substantiate the claim of the purchases. The assessee challenged the order of the Assessing Officer before the Ld. CIT(A) including the validity of reopening of the assessment for want of service of notice u/s. 148 of the Act. The Ld. CIT(A) stated in the impugned order that several notices was given to the assessee, however the assessee has neither attended the proceedings nor submitted any written submissions or supporting documents. Accordingly, the Ld. CIT(A) has confirmed the addition made by the Assessing Officer. It is pertinent to note that once the assessee has raised a legal issue challenging the validity of the notice u/s. 148 of the Act irrespective of non-appearance of the assessee, the CIT(A) ought to have decided the said issue on merits. Since, the Ld. CIT(A) has not decided the appeal of the assessee by speaking order and the legal issue raised by the assessee has not been adjudicated, therefore, the impugned order of the Ld. CIT(A) suffers from error and illegality. Accordingly, the impugned order is set aside and the matter is remanded record of the Ld. CIT(A) for re-adjudication of the appeal of the assessee on merits by a speaking order after granting one more opportunity of being heard to the assessee.
7. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 17th March, 2021.
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