Dilipkumar Pashabhai Prajapati vs. ITO

Parties Involved

Facts Summary

The assessee, Dilipkumar Pashabhai Prajapati, filed appeals against the orders passed by the National Faceless Appeal Centre (NFAC), Delhi, which upheld the addition of Rs. 1,16,49,66,875/- and Rs. 90,37,67,440/- made by the Assessing Officer under section 68 of the Income Tax Act, 1961. The additions were based on undisclosed credit transactions with M/s Orange Tradex Pvt. Ltd., which were flagged as accommodation entries. The assessee argued that the reassessment was illegal and against the principles of natural justice. The assessee also contended that the Assessing Officer failed to issue a notice under section 143(2) after the filing of the return in response to a notice under section 148, which is a mandatory requirement. The assessee further argued that the reliance on the Central Bureau of Investigation (CBI) inquiry for reassessment was invalid as it is not a judicial proceeding. The assessee claimed that the orders passed by the NFAC were ex-parte and violated the principles of natural justice.…

Legal Issues

• 1. Whether the order passed by the NFAC upholding the addition of undisclosed credit transactions is illegal and against the principles of natural justice?
• 2. Whether the Assessing Officer failed to issue a notice under section 143(2) after the filing of the return in response to a notice under section 148?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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