DCIT Vs Loocust Incorp (ITAT Chennai)
Bogus Purchase Reopening, 148 Validity, 153C vs 147 — ITAT Says CIT(A) Failed to Apply Mind – CIT(A) Ignored Key Legal Issues; Non-Speaking CIT(A) Order Set Aside
Revenue appealed against the relief granted by CIT(A) on reassessment issues involving alleged bogus purchases from C. Kumar Enterprises based on the search statement of entry-operator Maniklal Daga The Assessee filed Cross-Objections challenging reopening u/s 148, borrowed satisfaction, non-issue of notice u/s 143(2), non-invocation of s.153C, invalidation of return, and merits of addition of Rs. 2.39 crore.
Revenue’s appeals were delayed by 13 days, which ITAT condoned. The order of CIT(A) had quashed the assessment solely on legal grounds, calling the merits “academic”.
Tribunal noted—
- CIT(A) passed a non-speaking, mechanically reasoned order.
- Legal issues such as mandatory 143(2), whether 153C should apply, validity of return after 30 days, effect of Finance Act 2023 amendment, were not properly examined.
- CIT(A) cited precedents without showing how the ratio applied to facts.
- Statement of Daga and its use without cross-examination, opening balance wrongly treated as purchases, and other factual issues were also not adjudicated.
ITAT held that the entire adjudication requires fresh, de-novo consideration. Accordingly, the complete set of 8 matters were restored back to CIT(A) with directions to pass a speaking order, deal with all legal & factual issues, and grant full opportunity to the Assessee.
