Sushil Rice And General Mills: ITAT Remands Reopening Issue to CIT(A).

Headnote:

The ITAT allowed the assessee’s appeal for statistical purposes and remanded the matter to the CIT(A) for fresh adjudication. The issue concerned the reopening of assessment under Section 147 r/w 144B of the Income Tax Act, 1961 and addition on account of alleged bogus purchases. The Tribunal found that the CIT(A) had not properly examined the evidence furnished by the assessee, including books of accounts and sales/purchase details, and had relied solely on the report of the Investigation Wing regarding one entry provider. The ITAT emphasized the need for adjudication in the true spirit of law after giving the assessee adequate opportunity to be heard.

Background:

1. The assessment for A.Y. 2013-14 was framed by AO under Section 147 r/w 144B of the Income Tax Act based on information obtained from a survey of the entry provider Shri Hitesh Jain.
2. The CIT(A) confirmed an addition of Rs. 1,43,59,876/- on account of alleged bogus purchases without examining the genuineness of invoices or books of accounts in detail.
3. The assessee’s appeal before ITAT was time-barred by 14 days, but the Tribunal condoned the delay considering the small period of delay and substantial cause of justice.
4. Assessee’s counsel sought adjournment due to illness, which was rejected, leading to ex-parte hearing.

Court’s Observations:

1. CIT(A) had not adjudicated the issue on merits and relied only on the investigation report.
2. The assessee had furnished complete books and purchase/sales details, which were not properly considered.
3. The ITAT held that the matter should be remanded to CIT(A) for fresh adjudication after providing adequate opportunity to the assessee.

Legal Provisions Discussed:

1. Section 147, Income Tax Act, 1961 – Income escaping assessment.
2. Section 144B, Income Tax Act, 1961 – Procedure for completion of reassessment.
3. Principles of natural justice and proper examination of evidence in tax appeals.

Result:

1. Appeal of the assessee allowed for statistical purposes.
2. Order of CIT(A) set aside and remanded for fresh adjudication.

Citation: 2025:DEL:ITA2236

Case: Sushil Rice And General Mills v. ITO

Court: Income Tax Appellate Tribunal, Delhi Bench ‘G’

Coram: Shri Mahavir Singh (Vice President) & Shri Krinwant Sahay (Accountant Member)

Date of Decision: 13 November 2025

ITA No.: 2236/DEL/2024 | Assessment Year: 2013-14