Tribunal upholds assessment reopening for unexplained cash deposits, sustains Rs. 3,00,000 profit addition

The Tribunal upheld the validity of reopening the assessment under section 147 due to unexplained cash deposits, dismissing the challenge against it. The addition of Rs. 3,00,000 as net profit was sustained as the assessee failed to provide evidence countering it. The Tribunal also rejected the argument that additions were made without proper notice, citing an issued notice that went unanswered. Consequently, the appeal was dismissed on 26th April, 2022.

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Issues:
1. Validity of reopening of assessment
2. Sustaining the addition of Rs. 3,00,000
3. Making addition without giving notice to the assessee

Validity of reopening of assessment:
The appeal challenged the reopening of assessment under section 147, arguing that the Assessing Officer was not justified in making additions other than what was mentioned in the reopening notice. The Assessing Officer reopened the assessment based on cash deposits of Rs. 3,00,000 in the bank account without any explanation from the assessee regarding the source of the cash deposits. The Tribunal held that the Assessing Officer was justified in reopening the assessment as there was no income tax return filed by the assessee and no explanation provided for the source of cash deposits. The Tribunal emphasized that the Assessing Officer can proceed to assess other issues after reopening, and there is no legal requirement to confine the assessment to the originally mentioned issue. Therefore, the grounds challenging the validity of reopening were dismissed.

Sustaining the addition of Rs. 3,00,000:
The Assessing Officer made an addition of Rs. 1,89,856 as net profit based on the gross receipts of Rs. 18,52,362, as the assessee failed to provide any evidence to counter this finding. The Tribunal upheld the decision of the authorities below, stating that without any evidence from the assessee, there was no reason to interfere with the Assessing Officer's findings. Consequently, the ground challenging the addition was dismissed.

Making addition without giving notice to the assessee:
The assessee contended that additions were made without a show cause notice. However, the Tribunal noted that a notice dated 22.12.2018 was issued by the Assessing Officer, and no one attended the proceedings in response to it. Therefore, the Tribunal rejected the ground challenging the addition made without giving notice to the assessee. Ultimately, the appeal of the assessee was dismissed, and the order was pronounced on 26th April, 2022.

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