DCIT Vs Nikhil Mittal (ITAT Raipur)
Appeal Disposed on JAO/FAO Issue Alone – Bogus Purchases Allegation Unexamined- ITAT Orders De Novo Adjudication-Failure to Record Findings u/s 250(4) & (6) -No Speaking Order, No Merits – Matter Remanded
In a search u/s 132 in the case of Hanumant Trading & H.K Group, the proprietor of M/s H.K Enterprises admitted on oath that he provided accommodation entries & bogus bills. Based on this material, AO held that Assessee, proprietor of M/s Niros Industries, made bogus purchases of Rs.54,20,106/- from H.K Enterprises, a concern alleged to be involved in ITC fraud through fake invoices. AO made an addition of 12.5% (Rs.6,77,513/-) as profit element of non-genuine purchases after Assessee failed to establish genuineness.
Before CIT(A)/NFAC, appeal was allowed only on the technical ground relating to JAO/FAO by relying on Hexaware Technologies (Bom HC) & decisions of Telangana & Gauhati High Courts. However, CIT(A)/NFAC did not examine any of the issues on merits, nor complied with the mandate of u/s 250(4) & 250(6) requiring inquiry & a speaking order.
Both sides agreed that CIT(A)/NFAC failed to adjudicate the core issue of bogus purchases. Tribunal observed that the matter was disposed merely on the JAO/FAO aspect—which itself is pending before the Supreme Court—without any finding on merits. Holding that CIT(A)/NFAC failed to follow statutory mandate & principles of natural justice, Tribunal set aside the order.
