No Section 69C Addition for Alleged Bogus Purchases Without Evidence: ITAT Mumbai

Ankit Gems Private Limited Vs Circle 5(1)(1) (ITAT Mumbai)

The assessee filed an appeal before the Income Tax Appellate Tribunal against the order of the Commissioner of Income Tax (Appeals) dated 11.12.2023 arising from an assessment completed under Section 143(3) read with Section 147 of the Income-tax Act for Assessment Year 2012-13. The appeal challenged the addition of Rs.38,68,049/- made under Section 69C in respect of alleged bogus purchases from Millennium Concern, a concern stated to be connected with the Bhanwarlal Jain group.

At the outset, the Tribunal considered a delay of 427 days in filing the appeal. The assessee explained that the registered email account used for income-tax compliances was operated by an employee who, due to medical issues, inadvertently failed to act upon the appellate order. The assessee submitted the employee’s affidavit, medical records, and the subsequent penalty notice under Section 271(1)(c) through which it came to know of the appellate order. Observing that the assessee derived no advantage from the delay, that adjudication on merits should ordinarily prevail over dismissal on technical grounds, and relying upon the Supreme Court decision in Collector Land Acquisition, Anantnag and others vs. Master, Katiji and others, the Tribunal condoned the delay and admitted the appeal for decision on merits.