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2025 (1) TMI 1558 - AT - Income TaxAssessment proceedings u/s 153A - validity of consolidated/common order for AY 2011-12 to 2019-20 in violation of mandate of section 153D - HELD THAT - As the facts involved in the present case remains the same as were there in the case of Hitesh Golecha 2024 (4) TMI 1142 - CHHATTISGARH HIGH COURT wherein had looked into the similarly worded approval granted by the Jt. CIT Range-Central Raipur and had rejected the assessee s claim that the said approval was granted without application of mind by the latter therefore we respectfully follow the same. Order passed by Ld. CIT(A) on exparte basis and the assessment order passed by the Ld. AO u/s 153A was bad in law and liable to be quashed - As there was no submission by the assessee before us on the aforesaid issues to substantiate that how the order passed by the Ld. Appellate Authority and Ld. AO are not in accordance with the mandate of law we therefore do not find any substance in such contentions raised by the assessee in ground no. 1 2 of the present appeal accordingly the same therefore are dismissed being bereft of merits. Unaccounted income of the assessee by estimating the Gross Profit of the assessee at 8% of the unaccounted sales - assessee had declared the GP at 5% - No infirmity in the order of Ld. CIT(A) in confirming the addition made by the Ld. AO in absence of any plausible explanation by the assessee to dislodge the same. Addition of commission @ 1% on undisclosed sale confirmed by CIT(A) - CIT(A) was compelled to decide the appeal based on facts on record available before him after deliberating thoroughly at length on the merits of the issue. As the assessee s conduct before us is also observed to be evasive and of a non-compliant as the group matters of the assessee were fixed for hearing on various dates but the assessee remains non-responsive or has represented only for seeking of adjournments. There was no infirmity in the order of Ld. CIT(A) in confirming the addition made by the Ld. AO in absence of any plausible explanation by the assessee to dislodge the same. Further we observe that the assessee s involvement in providing of Bogus Sales bills in lieu of commission was never disputed by the assessee therefore receipt of commission by the assessee on such bogus transactions cannot be doubted therefore the finding of Ld. AO that the assessee has received a commission from such transactions found to be of material substance. We thus in terms of such observations do not find any perversity in the decision of Ld. CIT(A) so we uphold the same.
1. ISSUES PRESENTED and CONSIDERED
The core legal questions considered by the Tribunal in these appeals arising under the Income Tax Act, 1961, primarily include:
2. ISSUE-WISE DETAILED ANALYSIS Validity of consolidated/common order and prior approval under section 153D (Additional Grounds 1 & 2) The assessee challenged the validity of the consolidated approval granted under section 153D, contending that the assessment framed and demand raised were vitiated for want of prior approval by the competent authority. The Revenue contended that the additional ground did not raise a question of law necessary for correct assessment and relied on a recent decision where the Tribunal held that such grounds are not maintainable unless they affect tax liability. The Tribunal examined the issue in light of a coordinate bench decision in Panchsheel Solvent Pvt. Ltd. Vs. ACIT and the judgment of the Hon'ble Jurisdictional High Court in Hitesh Golecha Vs. ACIT. The High Court had held that where the Assessing Officer obtains prior approval from the Joint Commissioner of Income Tax (Jt. CIT) as mandated under section 153D, the assessment order is valid. The Court emphasized that the presumption of due diligence applies under Section 114 of the Evidence Act, and mere assertion by the assessee that no application of mind was made cannot be accepted without evidence. The Tribunal found that in the present case, the Jt. CIT had granted prior approval by a formal letter, and thus the mandate of section 153D was complied with. The Tribunal declined to admit the additional ground and dismissed the challenge to the validity of the consolidated assessment order. Legality of ex-parte order by CIT(A) and assessment order under section 153A (Grounds 1 & 2) The assessee contended that the appellate order passed ex-parte and the assessment order under section 153A were bad in law. However, the assessee failed to advance any substantive argument or evidence to substantiate this claim before the Tribunal. The Tribunal accordingly dismissed these grounds as devoid of merit, noting that the CIT(A) had provided repeated opportunities to the assessee for representation, which were not availed. Estimation of undisclosed income by applying 8% gross profit rate (Ground 3) The Assessing Officer (AO) made additions on account of unaccounted income by estimating gross profit (GP) at 8% on undisclosed sales, rejecting the assessee's declaration of 5%. The AO's decision was based on incriminating documents, loose papers, data seized from laptops and hard disks, and statements recorded during search and seizure operations. The AO found the 5% GP rate offered by the assessee to be unsubstantiated. The CIT(A), after multiple opportunities to the assessee, confirmed the addition in absence of any representation or plausible explanation. The Tribunal noted the assessee's evasive conduct and non-compliance during hearings before both the CIT(A) and the Tribunal. The Tribunal observed that the AO's estimation was based on credible material and that the CIT(A) had deliberated thoroughly on the merits before confirming the addition. Consequently, the Tribunal upheld the addition of Rs. 44,78,935/- for AY 2014-15 (and corresponding additions for other years) based on the 8% GP rate, dismissing the ground raised by the assessee. Disallowance of commission @1% on alleged bogus sales (Ground 4) This addition arose from incriminating documents found during search and seizure, showing that the assessee had issued bogus sales bills and returned cash after deducting VAT to various parties. The AO treated 1% commission on such bogus sales as income, amounting to Rs. 63,430/- for AY 2014-15. The assessee claimed these transactions were accounted for and taxed, and that addition would amount to double taxation. The AO rejected this contention, relying on statements recorded during search and seizure and documentary evidence indicating the bogus nature of sales and commission payments. The CIT(A) confirmed the addition after the assessee failed to appear for hearings. The Tribunal noted the absence of any plausible explanation or challenge to the incriminating material by the assessee. It further observed that the assessee's involvement in bogus sales bills was undisputed, and hence receipt of commission on such transactions was a reasonable inference. The Tribunal upheld the addition and dismissed the ground. Computation of interest under sections 234A, 234B, and 234C (Ground 5) This ground was held to be consequential and academic, requiring no separate adjudication. The AO was directed to compute interest as per law after finalization of the assessment. General and academic grounds (Ground 6) These were dismissed as infructuous due to lack of any substantive contentions. Limitation and condonation of delay The Tribunal noted that the appeals were barred by delay ranging from 0 to 35 days. The assessee filed applications for condonation of delay citing justifiable reasons. The Tribunal found substance in these explanations and condoned the delay for all appeals, allowing them to be adjudicated on merits. Conduct of the assessee and procedural observations The Tribunal recorded that the assessee's representatives repeatedly sought adjournments and failed to appear on multiple occasions before both the CIT(A) and the Tribunal. The Tribunal issued strict directions that no further adjournments would be granted and proceeded to adjudicate the appeals in the absence of the assessee's representation. 3. SIGNIFICANT HOLDINGS On the issue of validity of consolidated assessment orders and prior approval under section 153D, the Tribunal held:
Regarding the estimation of undisclosed income by applying 8% GP rate:
On the issue of commission disallowance on bogus sales:
On procedural and limitation issues:
On dismissal of ex-parte order challenge and general grounds:
Final determinations include dismissal of all appeals filed by the assessee for AYs 2014-15 to 2019-20, with confirmation of additions made by the AO and upheld by the CIT(A), including the application of an 8% GP rate on unaccounted sales and disallowance of commission on bogus sales. The Tribunal also upheld the validity of consolidated assessment orders under section 153A and prior approval under section 153D, and condoned delays in filing appeals.
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