ITAT Mumbai Dismisses Appeals for Non-Prosecution; Upholds Additions on Bogus Purchases and Unexplained Liabilities
Court / Authority
Income Tax Tribunal
Update / Judgement Date
26 Aug 2026
Source
WCP News Bulletin
Author
Manas Yadav — WCP Legal Desk
Reading Time
2 min read
View Count
1
Key Facts and Tribunal Findings
The Income Tax Appellate Tribunal (ITAT), Mumbai Bench, dismissed the appeals filed by Darwin Platform Industries Ltd. for Assessment Years 2021–22 and 2022–23, upholding additions made by the Assessing Officer due to lack of prosecution and absence of supporting evidence.
The Tribunal noted that despite multiple notices issued through both electronic and physical modes, the assessee failed to appear before the Tribunal. A similar pattern of non-compliance was observed before the Commissioner of Income Tax (Appeals), where repeated opportunities were granted but remained unutilized. In view of continued non-response, the Tribunal proceeded ex parte and decided the appeals based on available material and submissions of the Revenue.
For Assessment Year 2021–22, the Assessing Officer had made an addition of ₹41.81 crore by estimating profit at 8% on alleged unaccounted sales. The addition was based on discrepancies between GST data and reported financials, along with failure of the assessee to substantiate the genuineness of purchases from suppliers whose GST registrations were inactive or non-compliant. The Tribunal observed that the assessee failed to produce any cogent evidence either before lower authorities or before it to rebut these findings.
For Assessment Year 2022–23, the Assessing Officer treated trade payables and advances to related parties as unexplained income under Section 69A, resulting in an addition of ₹129.10 crore. The finding was based on inconsistencies in financial statements, mismatch between bank transactions and reported sales, and absence of party-wise details. The Tribunal noted that the assessee failed to discharge the burden of proof to establish genuineness of such liabilities.
Given the absence of representation and failure to substantiate claims, the Tribunal found no reason to interfere with the findings of the lower authorities. Accordingly, both appeals were dismissed and the additions sustained in entirety.
Full Judgement / Attachment
Full Judgement
Frequently asked questions about Income Tax Tribunal
- What is the Income Tax Appellate Tribunal (ITAT)?
- The ITAT, set up in 1941, is the second appellate authority in direct tax matters and the final fact-finding body. It hears appeals against orders of the Commissioner (Appeals) and certain other authorities, through benches across India.
- What is the time limit to file an appeal before the ITAT?
- An appeal must be filed within two months from the end of the month in which the order is communicated. This rule has applied since 1 October 2024 and continues under the Income-tax Act, 2025. The Tribunal can condone delay for sufficient cause.
- Can the ITAT stay a tax demand?
- Yes. The Tribunal can stay recovery of a disputed demand while an appeal is pending, usually on deposit of a part of the demand or furnishing security. Stays are granted for a limited period, and the appeal is expected to be decided within it.
- Where does an appeal go after the ITAT?
- An appeal against an ITAT order lies to the High Court, but only on a substantial question of law. A further appeal lies to the Supreme Court.
- How can White Collar Professional help with a ITAT matter?
- Post your requirement on White Collar Professional to receive proposals from verified Chartered Accountants and tax Advocates, compare them, and pay securely through the platform. This page also tracks the latest ITAT ITAT orders as they are reported.
