V. CHANDRASEKAR,ARNI vs. ITO, WARD-1, TIRUVANNAMALAI

The appellant submits that the re-assessment made by the assessing officer on 08/02/2025 is not valid in law.

1 The notice u/s 148 dated 30/03/2024 was issued by the Juri ictional assessing officer (JAO) viz. the Income-tax Officer, Ward 1, Tiruvannamalai was beyond his power.

2 The appellant submits that after the introduction of section 151A with effect from 1st April, 2021 the notices u/s 148 can be issued only by the Faceless Assessing officer and not by the juri ictional assessing officer and the notice issued by the JAO is therefore not valid in law and the assessment is liable to be cancelled on this ground in limine.

The learned National Faceless Appeal Centre, Delhi (NFAC)erred in confirming the additions of Rs.1,56,68,591/- made by the assessing officer ignoring the return of income filed by the appellant disclosing a loss of Rs. 32,91,913/-.

The Assessing officer has not given any reasons for ignoring the return of income filed in response to notice issued u/s 148 and the loss disclosed.

The learned NFAC erred in confirming the estimate of income at Rs. 59,12,601/- being 12.5% of the receipts from transport business of Rs.4,73,00,811/-

The authorities below erred in not appreciating the fact that the appellant had maintained audited books of accounts for his transport business and there was only a loss in his business owing to depreciation on vehicles of Rs. 89,39,982/-

1 The appellant submits that in any view of the matter, the estimate of 12.5% for transport business is very much on the high side especially when the assessing officer has not relied on any material or comparable cases for such high estimate of Income and further for transport business the Income is estimated u/s 44AE at a very less amount.

2 The appellant therefore prays that the estimated income of Rs. 59, 12,601/- may be deleted and the loss returned by the appellant may be accepted considering the heavy depreciation on Lorries.

The learned NFAC erred in sustaining the addition of Rs.31, 46,240/- made under section 69A being cash deposited in the bank account for want of corroborative evidence.

1 The authorities below ought to have appreciated the fact that the sales turnover of rice and paddy amounted to Rs. 64, 55,750 and there were cash withdrawals of Rs. 55, 51,000/- more than the cash deposit which would explain the cash deposit and thus the appellant had explained the source for the cash deposited in the bank accounts.

2 The appellant submits that if the cash deposited related to sales turnover, the cash deposit cannot be considered as unexplained money under section 69A of the Act as per the ratio laid down in many cases by the High Court/Tribunals.

3 The appellant submits that the total cash sales and cash withdrawals was about Rs. 1.20 cr. and the cash deposit of Rs.31,46,240/- was quite reasonable and commensurate with the receipts.

4 The authorities below have not given any valid reason for rejection of the explanation given by the appellant for the source for the cash deposited.

5 The appellant therefore prays the addition of Rs. 31, 46,240/- being cash deposits in bank made u/s 69A of the Act may be deleted.

The learned NFAC erred in sustaining the addition of Rs. 64, 55,750/- as unexplained credit under section 68 of the Act.

1 The appellant submits that he is carrying on business in purchase and sale of rice in the name and style of "Easan Traders" and admitted the sales turnover and offered an income of Rs. 2, 06,150/- in the profit and loss account submitted along with the return of income filed in response to notice issued u/s 148 of the Act.

2 The authorities below erred in not appreciating the fact that the appellant was carrying on trading business in rice and paddy and offered income in his return of income in the earlier and subsequent assessment years in the name of "Easan Traders" and therefore the inference that no evidence was submitted for the business carried on is not justified and not correct.

3 The learned NFAC has not properly adjudicated the grounds though he has stated that the same was raised in Ground Nos.23-27. 7.4 The appellant submits that he has explained the source for the credit of Rs. 64, 55,750/- as sales turnover of paddy and rice traded by the appellant and therefore the assessing officer was not justified in assessing the said sum of Rs. 64, 55,750/- as unexplained credit u/s 68 of the Act.

5 The appellant therefore prays that the addition of Rs. 64, 55,750/- made under section 68 of the Act may be deleted.

The learned NFAC erred in sustaining the addition of Rs. 54,000/- made under section 69A of the Act.

1 The authorities below failed to consider that the said amount was assessed to tax only because TDS was deducted u/s 194) and the assessing officer considered as "Fees Income" in the assessment order and therefore there is absolutely no justification for treating the same as unexplained money u/s 69A of the Act.

2 The appellant submits that the said sum of Rs. 54,000/- represent receipts from his transport business already included in the reported turnover and the payer has wrongly deducted TDS u/194] instead of 194C and therefore the same cannot at all be added to the total income of the appellant much less u/s 69A of the Act.

3 The appellant had in fact alternatively submitted that if the said sum of Rs. 54,000/- represent professional fees, the assessing officer ought to have assessed the same u/s 44ADA at 50% of the gross receipts as professional income and not as unexplained money under section 69A of the Act.

4 The appellant therefore prays that the addition of Rs. 54,000/- made as unexplained money u/s 69A of the Act may be deleted.

The learned NFAC erred in sustaining the addition of Rs. 1, 00,000/- as unexplained money u/s 69A of the Act.

1 The assessing officer has information that the appellant had received agricultural Income of Rs. 1, 00,000/- but in the assessment instead of assessing the said sum as agricultural Income, he has added the same as unexplained money u/s 69A of the Act which is not justified and correct.

2 The appellant submits that the addition of Rs. 1 lakh was made by the assessing officer not based on any material found but based on the declaration given by the appellant before the Canara Bank for getting agricultural jewel loan.

3 The appellant had explained that the declaration was given for getting agricultural loan for the family which owned agricultural lands and he has not derived any agricultural income on his own and he is not also holding any agricultural land in his individual capacity.

4 In view of the matter, the assessing officer is not justified in treating the alleged agricultural income of Rs. 1, 00,000/- as unexplained money u/s 69A and at best he could have assessed the same as agricultural income of the appellant.

5 The appellant therefore prays that the addition of Rs. 1, 00,000/- made u/s 69A of the Act may be deleted.

The appellant therefore prays that the re-assessment made u/s 147 may be cancelled as invalid in law and also to delete the various additions made to the extent of Rs. 1, 56, 69,590/- in the assessment order and accept the loss returned and render justice.

The brief facts of the case are that the assessee was amongst the non-filers of return but information w.r.t. the assessee was available through “High Risk CRIU/VRU” that the assessee has entered into the financial transactions as enumerated in para 1 of the assessment order amounting to Rs. 9,28,87,210/-. Based on this information, a notice u/s. 148 of the Act was issued vide dated: 31.03.2024, but the assessee has not filed any return in response to the same, rather filed belatedly on 16.12.2024. Ultimately, the case of the assessee was assessed u/s. 147 r.w.s. 144B of the Act by making additions u/s. 68, 69A and 28 of the Act amounting to Rs. 1,56,68,590/- vide para 5 of the assessment order. The assessee being aggrieved with the same preferred an appeal before the Ld. CIT (A), who in turn dismissed the appeal of the assessee.

The assessee being further aggrieved preferred the present appeal before us. We have gone through the order of the AO, order of the Ld. CIT (A) and submissions of the assessee along with grounds taken before us. It is observed that the assessee vide his letter dated: 27.12.2024 stated that he has shown turnover of Rs. 5,37,56,561/- in his return of income filed on 16.12.2024. Apart from this the assessee has neither filed any reply nor filed any details or evidence. It is observed V Chandrasekar that the assessee’s main business was transportation, but no invoice/bills, audited books of accounts etc. were ever produced by the assessee. There is no doubt that ample opportunities were given by the AO to the assessee during the assessment proceedings, but the assessee failed miserably. Almost, similar behaviour was there before the Ld. CIT (A) also.

Still, as the assessee came forward before us with certain documents and plausible on substantive orders, as far as possible. In this case both the orders of the authorities below are in the nature of ex-parte. Looking at the previous compliances by the assessee and his behaviour to explain the things in a positive manner, we are of the opinion, that the assessee deserves a last opportunity to represent his case again before the AO. In view of this, we restore the matter back to the file of the AO for de-novo assessment after giving the assessee a proper opportunity of being heard as per section 282 of the Act and the assessee is also directed to be vigilant and cooperative enough this time without fail and seeking any adjournment.

In the view of the above observations and directions the grounds raised by the assessee are allowed for statistical purposes only and the AO is directed to frame the assessment de-novo.

In the result, the appeal of the assessee is allowed for statistical purposes only in above terms.