Tribunal dismisses notice validity challenge, sets aside income assessment for verification

The Tribunal dismissed the grounds related to the validity of the notice due to incorrect service, as the appellant withdrew the challenge and the notice was issued based on the address available with the Assessing Officer. Regarding the assessment of income based on bank deposits, the Tribunal set aside the matter for reassessment, noting the need for verification of the appellant's explanation with supporting evidence. The appeal was allowed for statistical purposes, requiring the Assessing Officer to properly consider the deposits in relation to withdrawals.

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Issues:
1. Validity of ex-parte order due to incorrect service of notice u/s. 148
2. Assessment of income based on deposits in bank account

Issue 1: Validity of ex-parte order due to incorrect service of notice u/s. 148:
The appellant challenged the ex-parte order passed by the Assessing Officer without proper service of notice u/s. 148. The appellant argued that the notice was issued at the wrong address, rendering it invalid. The appellant contended that the notice was not served within the period of limitation, which would vitiate the reassessment proceedings. However, the Department argued that the notice was issued based on the address available in the bank statement of the appellant and that the appellant did not file a return of income. The appellant had initially raised this issue but later withdrew it before the CIT(A). The CIT(A) dismissed the grounds related to notice service as the appellant did not press them. The Tribunal held that since the notice was issued to the address available with the AO and the appellant had withdrawn the challenge to the notice service, the issue could not be raised again in the appeal. Therefore, the grounds related to the validity of the notice were dismissed.

Issue 2: Assessment of income based on deposits in bank account:
The appellant contested the addition made by the Assessing Officer regarding deposits in the bank account, arguing that the deposits represented sale proceeds of cattle feed and fodder. The appellant claimed that as per Section 44AF, the presumptive income should be assessed at 5% of the turnover, resulting in an income of Rs. 65,000. The Department, however, argued that the appellant failed to provide documentary evidence supporting the claim. The Tribunal noted that the Assessing Officer had made the addition without considering corresponding withdrawals by the appellant, and that the appellant's explanation regarding the deposits needed verification. The Tribunal set aside the matter for reassessment by the Assessing Officer to properly consider the deposits in relation to withdrawals and to verify the appellant's explanation with supporting evidence. Consequently, the appeal was allowed for statistical purposes.

In conclusion, the Tribunal addressed the issues of the validity of the notice service and the assessment of income based on bank deposits, providing detailed analysis and rulings on each point raised by the appellant.

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