Vinay Dalchand Mehta Vs ITO (ITAT Mumbai)
ITAT Mumbai Remands ₹5.9 Cr Addition Case – Assessee to Pay ₹25,000 Cost- Ex Parte Orders Set Aside – Matter Restored to AO
Assessee, proprietor of M/s Vinayaka Metal Corporation, filed return declaring income of ₹21.11 lakh for AY 2022-23. AO, noting non-compliance to statutory notices, passed an ex parte order u/s 143(3) r.w.s. 144B on 25.03.2024. He treated deposits in bank accounts as unaccounted sales of ₹7.42 crore & applied presumptive profit rate of 8% u/s 44AD, making an addition of ₹5.94 crore.
Before CIT(A), Assessee argued that many deposits were mere internal transfers, & also highlighted that the auditor’s reporting of GST demand of ₹3.06 crore was factually incorrect. However, as there was again no compliance, the appeal was dismissed ex parte on 27.03.2025.
Before Tribunal, Assessee pleaded that repeated defaults were due to negligence of his CA/consultant & prayed for one more opportunity to present books of account. Reliance was placed on principles of natural justice under Article 14 of the Constitution & the audi alteram partem rule.
Tribunal observed that Assessee had indeed defaulted repeatedly, but in the interest of justice, it remanded the matter back to the Jurisdictional AO for fresh adjudication on merits. However, this was made conditional upon Assessee paying cost of ₹25,000 to the PM Relief Fund & producing proof of deposit before the AO. Assessee was also directed to ensure full compliance in the fresh proceedings.
