Redex Enterprise Vs ITO (ITAT Ahmedabad)
In the case of Redex Enterprise Vs Income Tax Officer, the Income Tax Appellate Tribunal (ITAT) Ahmedabad ruled in favor of the assessee by setting aside an assessment order involving a substantial addition of ₹77.47 crore under Section 69C of the Income Tax Act. The case pertains to the Assessment Year 2020–21, wherein the assessee, a partnership firm providing manpower services, had filed a return declaring income of ₹33.46 lakh. During scrutiny, the Assessing Officer (AO) questioned the genuineness of purchases from certain vendors, alleging that these suppliers either did not file income tax returns or declared significantly low turnovers. The assessee failed to fully comply with notices due to time constraints and attempted to upload a reply via the grievance portal after the deadline. Despite this, the AO proceeded with the assessment and added the entire purchase amount as unexplained expenditure without considering the assessee’s late submission.
The assessee challenged the order before the Commissioner of Income Tax (Appeals) [CIT(A)] and submitted additional evidence under Rule 46A. However, the CIT(A) dismissed the appeal without admitting these documents or obtaining a remand report from the AO. The ITAT observed that both the assessment and appellate orders were passed in violation of the principles of natural justice. The Tribunal noted that the AO ignored the assessee’s attempt to respond via the grievance portal and finalized the assessment hastily. Furthermore, the CIT(A) did not independently verify the new evidence or allow it to be examined by the AO, leading to procedural unfairness. Considering these shortcomings, the ITAT remanded the matter back to the AO for fresh adjudication with instructions to examine the additional evidence and provide the assessee a fair opportunity to present its case.
