Ex Parte Assessment Order passed regarding Bogus Purchases: ITAT directs re adjudication [Read Order]

The Income Tax Appellate Tribunal (ITAT), Bangalore bench, directed readjudication on account of an ex parte assessment order regarding the bogus purchases. After filing the return of income, the assessee, Kalu Singh, underwent scrutiny and was assessed under section 143(3) of the Income Tax Act. In the order dated 30.03.2021, the assessed income was Rs.14,270 for the year under appeal. A notice under section 143(2) dated 28.09.20 was served on the assessee, initiating scrutiny for tax evasion examination. The assessee responded to notices under section 142(1), providing required information.

On March 24, 2021, a show-cause notice proposed ending the assessment based on a draft assessment order, alleging Rs.9,99,250 bogus purchases from M/s. Mahendra Sales Corporation. The draft assessment order was confirmed without considering the assessee's response. The order mentioned receiving specific information on bogus purchases from the Regional Economic Intelligence Committee (REIC).

The assessee appealed to NFAC, which provided opportunities for document submission via email, but no response was received. NFAC, after reviewing the material, dismissed the appeal. The assessee then appealed to the tribunal.

Deepak Chopra, the counsel for the assessee, pleaded for another opportunity before NFAC for substantial justice. Ganesh R. Ghale, representing revenue, appeared. The single-member bench, Chandra Poojari (Accountant member), observed that since the NFAC order was ex-parte, it is appropriate to give the assessee one more opportunity. Accordingly, the entire dispute is remitted to NFAC for fresh consideration.

To Read the full text of the Order CLICK HERE

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