TaxTMI 
TaxTMI 
2010 (9) TMI 733
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..... The case was processed under Section 143(1) of the Act, was selected for scrutiny and a notice under Section 143 (2) of the Act was issued to the appellant on 18.06.2007. Despite service, none on behalf of the assessee attended the hearing before the Assessing Officer ['the AO']. The AO gathered that the assessee had deposited in the bank account a sum of Rs.14,13,350/- in cash during the relevant financial year and to ascertain the surce of this cash, the assessee was given repeated notices under Section 142(1) and 143 (2) of the Act but he failed to submit the requisite explanation. According to the AO, on 19.09.2007, one representative appeared on behalf of the assessee and sought adjournment but did not file any power of attorney. The case was, however, adjourned to 24.09.2007; but even on the stipulated date, none attended on behalf of the assessee nor any reply was filed. The AO pointed out that yet further notices were issued under Section 143 (2) of the Act but the assessee failed to submit reply. The AO further pointed out that finally, on 21.11.2008, the assessee was issued letter No.2328 whereby he was specifically informed that even after sufficient opportunities, he ....
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....ssee devoid of substance. The contention regarding want of service was rejected by the Tribunal while observing thus: "5. We have heard the parties and have carefully perused the material on record. A perusal of the departmental record laid before us reveals that the appellant adopted non-cooperative attitude at assessment stage despite repeated number of notices u/s. 142(1) and 143(2) of the Act having been sent by registered post and also by Speed Post that stand served upon him. Even the last notice dated 21.11.2008 issued u/s. 142(1) and 143(2) of the Act listing the case for hearing on 28.11.2008 are shown to have been served by Speed Post on the address of the appellant. The assessee merely makes an oral submission that no notices have been served. An affidavit to this effect has neither been laid before us nor shown to have been filed before any of the authorities below. The oral denial, as such, is not bonafide. The assessee's claim, therefore, that the notice issued have not been served is found rightly rejected by the ld. CIT (A)." The Tribunal found the assessment under Section 144 of the Act justified after referring to the relevant provisions thereof that ....
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....ay, without establishing any nexus that the same amount has been re-deposited at such outstations on subsequent dates. The assessee's explanation, in fact is contradictory inasmuch as on one hand he says that the amount withdrawn on a particular date stands deposited in the same account while on the other hand, he claims that the amounts deposited at outstations in various cities are the collection from sale proceeds. In this view of the matter, the explanation given by the assessee being untrue cannot be accepted requiring to adopt a peak credit with respect to unexplained credit and debit entries in his bank account with IDBI branch at Mumbai. Therefore, the decision by Hon'ble M.P. High Court rendered in the case of Jhamatmal Takhatmal Kirana Merchants vs. CIT, (1999) 152 CTR (MP) 311 and of Rajasthan High Court in the case of Swaroop Chand Kojuram, 235 ITR 732 (Raj.) relied upon by the Revenue are found relevant to the facts of the present case. The decision in the immediate preceding year in his case for A.Y. 2005-06 is found rendered under different facts and circumstances, where the ld. CIT (A) while accepting the peak credit theory for deposit and withdrawals in the same ac....
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....e scheme of Section 144(1) makes it explicit and evident that upon the person concerned failing to make return, or failing to comply with the terms of notice issued under Section 142 (1) or direction under Section 142 (2A), or failing to comply with the directions of notice under Section 143 (2), the AO shall, after taking into account all the relevant material gathered and after giving the assessee an opportunity of being heard, make the assessment of total income to the best of his judgment. As per the first proviso to Section 144(1), the opportunity is to be given by the AO by serving a notice calling upon the assessee to show cause as to why assessment should not be completed to the best of his judgment on a given date. However, the second proviso thereof makes it clear that it shall not be necessary to give such an opportunity in the case where a notice under Section 142 (1) had been issued prior to making of assessment. Hence, where the notice under Section 142 (1) was given and the assessee failed to comply with the same, in our opinion, the second proviso to Section 144(1) clearly came in operation and it was never necessary for the AO to go on servicing further notices ....