ITAT Raipur Restores Bogus Purchase Dispute to CIT(A) Awaiting Jurisdictional High Court Ruling on Rice Millers

The adjudication of alleged accommodation entries and fake invoicing remains a highly litigated area under the Income Tax Act 1961. Recently, the Raipur Bench of the Income Tax Appellate Tribunal (ITAT) delivered a pivotal directive in the case of Maa Chandi Rice Industries Vs ACIT. The tribunal addressed the complexities surrounding alleged bogus purchases executed by rice millers, a contentious issue currently pending before higher judicial forums.

Instead of passing a conclusive verdict on the merits of the additions made by the tax authorities, the ITAT opted for a legally prudent route. The tribunal remanded the matter back to the first appellate authority, instructing them to await the final judgment of the Jurisdictional High Court on identical matters.

Factual Matrix of the Dispute

The controversy stems from the appellate orders dated 24.12.2025 passed by the Commissioner of Income Tax (Appeals), Raipur-3, covering the assessment years AY 2015-16 and AY 2016-17. During the tribunal proceedings, the assessee was unrepresented despite filing an adjournment petition, which the bench subsequently dismissed to proceed with the hearing based on the available records and arguments from the Revenue.

Initial Assessment and Reopening Proceedings

For the lead assessment year, AY 2015-16, the assessee had initially filed its return of income on 19.02.2016, declaring a total income of Rs.8,21,840. The tax department initially scrutinized the case and finalized the assessment under Section 143(3) of the Income Tax Act 1961 on 14.07.2017, revising the total income upward to Rs.19,66,360.