TaxTMI 
TaxTMI 
2012 (10) TMI 671
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....144 was wrong and unjustified. c) Sufficient opportunities given to the appellant which remained un-complied only suggest that the appellant is not in possession of any evidence to explain the source of deposits in the bank and hence avoided the proceedings u/s 143(3) of the I.T. Act. 4. The learned CIT(A) failed to appreciate that : a) The appellant was taken ill and could not attend the case on some dates of hearing. There was, therefore, sufficient cause for non-appearance on some dates of hearing. b) The deposits in bank a/c are explainable. 5. The various reasons given by the learned Assessing Officer to uphold the ex parte assessment u/s 144 of the I.T. Act and addition of Rs.Rs.12,99,850/- to the income of the appellant on account of unexplained cash credit are misconceived and incorrect. 6. The appellant order is contrary to the facts and law of the case. 7. The appellant craves leave to add, amend or alter any of the foregoing grounds of appeal at the time of hearing." 2. Facts, in brief, as per relevant orders are that return declaring income of Rs.Rs.1,11,998/- filed on 31.12.2007 by the assessee, after being processed u/s 143(1) of the Income-tax....
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....ed 18.12.2009. It is also observed that several opportunities were given to the appellant to represent his case before the Assessing Officer and that remained un-complied. Only when a notice u/s 271(1)(b) was issued for levy of penalty for non appearance, then the appellant himself made an appearance before the Assessing Officer and represented his case. However, it is seen that he has not submitted any documents substantiating the cash deposits in his personal bank accounts, though he is aware that such details were called for by the Assessing Officer. There is no sufficient cause put forth by the appellant that prevented him for attending the assessment proceedings. There is no merit in the submissions put forth by the appellant to say that the assessment made u/s 144 was wrong and unjustified. The assessment proceedings u/s 143(2) began prior to the information that was provided to the appellant vide letter dated 20.01.2009 and continued uptill 18.12.2009. 12 months is a long time for the appellant to avail the opportunity of explaining his part of the evidence. Therefore, in my opinion, the Assessing Officer is justified in making an assessment u/s 144 of the Income-tax Act ....
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....bank account of the appellant, I am of the opinion, that the decision taken by the Assessing Officer is correct and justified. Also several opportunities given to the appellant which remained uncomplied only suggests that the appellant is not in possession of any evidence to explain such a source and hence he avoided the proceedings u/s.143. After giving an opportunity as per the law and examining the evidence filed before the Assessing Officer the remand report was sent in an elaborate manner, and about the verification of cash deposits the Assessing Officer stated as under:- "Further, on perusal of the bank statement of Centurion Bank of Punjab Limited in which assessee has saving account, it is noticed that assessee has deposited cash amounting to Rs.13, 09,873/- during the FY- 2006-07. It is noted that the cash deposit in the bank is Rs.13,09,873/- which exceeds Rs.9,56,760/- i.e. gross receipts declared by the assessee in his return of income. Clearly, cash deposits in the bank are about 40% higher than the gross business receipts shown by the assessee in his return of income and further, as stated above, no nexus between the cash entries in the bank with gross receipts has....
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.... of assessment proceedings. In view of the above discussion the addition made by the Assessing Officer is confirmed and upheld." 3.2. Regarding ground relating to circumstances preventing the assessee from attending the assessment proceedings, the ld. CIT(A) held as under: "5.3.2 On perusal of the assessment order, it is seen that after selection of the case for scrutiny, a notice u/s 143(2) was issued to the appellant. Subsequently, vide letter dated 20.1.2009 the AIR information was sent to the appellant asking him to furnish the necessary details with substantiating evidences pertaining to the deposits in his savings bank account maintained with Centurion Bank of Punjab Ltd. Several notices dated 26.6.2009, 17.7.2009, 25.9.2009 were issued and duly served upon the appellant. None attended the proceedings on these dates. Subsequently, a notice u/s. 271(1)(b) dated 14.10.2009 posting the date of hearing as 22.10.2009 was issued and served upon the appellant. On 22.10.2009, the appellant himself appeared before the Assessing Officer, read the order-sheet entries which were to be explained by him and signed it when the case was posted to 28.10.2009. None attended on the adjour....
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....s bank account with the Centurion Bank of Punjab Ltd. It was stated that the deposits and withdrawals have been made relating to his business and that the credit balance on various dates during the financial year 2006-07 are from the sale proceeds of the retail business and out of the earlier withdrawals made but not utilized. To substantiate the same the appellant filed an affidavit. When the case was remanded to the Assessing Officer to furnish necessary report after verifying such deposits and withdrawals, the Assessing Officer simply stated in his report that the appellant merely filed copies of some purchase bills and electricity bills in the name of Smt. Prem Kaur. Apart from this, he has not filed any other evidence despite of giving an opportunity on 11.1.2011 to file details pertaining to the source of cash deposited on various dates or date of cash withdrawals or purpose of cash withdrawals, date and amount of re-deposit of remaining cash and deposit out of cash sales were furnished by the appellant. The Assessing Officer while examining the case relied upon the decision in the case of Smt. Sharda Devi Vyas Vs. Income-tax Officer in ITA No.433/lnd/2009AY-2006-07 where ....
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....ed business from the shop at old Rajender Nagar, owned by his wife, was assisted by his two sons during the period of illness. Therefore, the ld. CIT(A) was not justified in upholding the addition. On the other hand, the ld. DR supported the findings of the ld. CIT(A). 5. We have heard both the parties and gone through the facts of the case as also the written submissions filed on behalf of the assessee. As is apparent from the aforesaid facts narrated in the assessment order, none appeared before the AO despite issuance of various notices dated 26th June, 2009 & 25th September, 2009. Subsequently, in response to a show cause notice dated 14.10.2009 issued u/s 271(1)(b) of the Act, the assessee appeared before the AO. Inter alia, he was requested to furnish details as per order-sheet entry dated 22nd October, 2009 by 28.10.2009. None appeared on the scheduled date of hearing nor any adjournment was soughtnd nor even any written submissions were filed. A subsequent show cause notice dated 27.11.2009 also remained un-complied with. In these circumstances, the AO proceeded to complete the assessment u/s 144 of the Act with the addition of Rs.12,99,850/- u/s 68 of the Act on account....
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....5 in relation to completion of assessment u/s 144 of the act, are dismissed. 6. Despite completion of assessment u/s. 144 of the Act, we are of the opinion that it is still the duty of the ITO to make the assessment to the 'best of his judgment' after taking into account all relevant materials which he might have gathered. The two processes, i.e the gathering of relevant materials and the making of the assessment to the best judgment can never be dispensed with, even in a case where the assessment is made ex parte following the default of the assessee. Except for the fact that the assessee is not present before the AO or has not furnished a return, or where he has furnished a return, has subsequently defaulted to produce materials in support of his return or defaulted to co-operate with the officer in the task of adjusting his tax liability, the position of the AO in no way differs from a case where he has got to proceed under any other provision of the Act for the purpose of making the assessment. It is true that under s. 142(3) of the Act, there is a statutory requirement for giving an opportunity to the assessee before any materials are being utilised by the ITO for the purpo....