2025 (1) TMI 1057 - AT - Income Tax

Delay of 125 days - non-compliance of the assessee in appellate proceedings and the delay in filing the appeal - HELD THAT - As the assessee despite having been intimated about the fixation of hearing of the appeal had neither put up an appearance nor any application seeking adjournment has been filed before us therefore we are constrained to proceed with and dispose off the appeal as per Rule 24 of the Appellate Tribunal Rules 1963. As stated by the DR and rightly so the present appeal involves a delay of 125 days. As the assessee had not filed any application seeking condonation of the delay involved in filing of the present appeal therefore we are constrained to dismiss the appeal on the said count itself. Appeal filed by the assessee is dismissed.

1. ISSUES PRESENTED and CONSIDERED

The legal judgment addresses the following core issues:

Whether the reopening of the assessment under Section 148 of the Income-tax Act, 1961, based on alleged bogus purchases, is valid.
Whether the addition of Rs. 81,44,211 as unexplained expenditure under Section 69C is justified.
Whether the application of Section 115BBE for imposing a higher rate of tax is justified.
Procedural issues related to the non-compliance of the assessee in appellate proceedings and the delay in filing the appeal.

2. ISSUE-WISE DETAILED ANALYSIS

Issue 1: Validity of Reopening under Section 148

Relevant Legal Framework and Precedents: The reopening of assessment under Section 148 requires a "reason to believe" that income has escaped assessment. The appellant cited precedents such as Well Trans Logistic India P Ltd and Lakhmani Mewaldas to argue against the reopening.
Court's Interpretation and Reasoning: The tribunal focused on whether the information about bogus purchases provided a valid basis for reopening. The tribunal found that the information regarding transactions with Moksh Alloys Pvt. Ltd., which was involved in fake ITC claims, justified the reopening.
Key Evidence and Findings: The AO initiated proceedings based on data from the Insight portal indicating fraudulent ITC claims by Moksh Alloys Pvt. Ltd.
Application of Law to Facts: The tribunal upheld the reopening, finding a sufficient nexus between the information received and the formation of the "reason to believe".
Treatment of Competing Arguments: The tribunal did not find merit in the appellant's argument that the reopening was based on incorrect information.
Conclusions: The tribunal concluded that the reopening under Section 148 was valid.

Issue 2: Addition under Section 69C

Relevant Legal Framework and Precedents: Section 69C pertains to unexplained expenditure. The appellant argued against the addition, citing that the purchases were recorded in the books and no rejection of books under Section 145(3) occurred.
Court's Interpretation and Reasoning: The tribunal agreed with the AO's reasoning that the appellant failed to provide satisfactory evidence to counter the claim of bogus purchases.
Key Evidence and Findings: The appellant's failure to provide purchase/sale details and contradictory statements during assessment led to the addition.
Application of Law to Facts: The tribunal applied Section 69C, upholding the addition due to the lack of documentary evidence from the appellant.
Treatment of Competing Arguments: The tribunal dismissed the appellant's arguments due to non-compliance and lack of evidence.
Conclusions: The tribunal upheld the addition of Rs. 81,44,211 under Section 69C.

Issue 3: Application of Section 115BBE

Relevant Legal Framework and Precedents: Section 115BBE imposes a higher tax rate on certain incomes. The appellant contested its application.
Court's Interpretation and Reasoning: The tribunal did not specifically address this issue in detail, as it was intertwined with the validity of the addition under Section 69C.
Conclusions: By upholding the addition under Section 69C, the tribunal implicitly supported the application of Section 115BBE.

Procedural Issues

Non-compliance in Appellate Proceedings: The assessee failed to participate in the appellate proceedings, leading to the dismissal of the appeal by the CIT(A).
Delay in Filing Appeal: The tribunal dismissed the appeal due to a 125-day delay in filing, with no application for condonation of delay submitted.

3. SIGNIFICANT HOLDINGS

Preserve Verbatim Quotes of Crucial Legal Reasoning: "Based on the information that Moksh Alloys Pvt. Ltd. was engaged in both providing and taking benefit of fake Input tax credit the assessment proceedings was initiated."
Core Principles Established: The tribunal emphasized the necessity of providing satisfactory evidence in tax proceedings and the validity of reopening assessments based on credible information.
Final Determinations on Each Issue: The tribunal upheld the reopening under Section 148, the addition under Section 69C, and the procedural dismissals due to non-compliance and delay.

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