SAURAV GUPTA,LUDHIANA vs. ITO WARD 3(1) , LUDHIANA, LUDHIANA

The learned CIT(A) has erred in law and on facts in dismissing the appeal without adjudicating the issues on merits, thereby violating principles of natural justice.

The assessment framed u/s 147 r.w.s. 144 & 144B is bad in law and void ab initio as the reassessment proceedings were initiated mechanically without valid application of mind.

The authorities below erred in treating bank withdrawals as business receipts without any material to establish sales, turnover, or cash rotation.

The estimation of income @8% on alleged turnover is arbitrary, unjustified, and contrary to law.

The addition has been made solely on the basis of bank entries without any corroborative evidence, books of accounts, or third-party confirmation.

The authorities failed to appreciate that cash withdrawals and transfers pertained to funds belonging to third parties and not to the appellant.

The assessment and appellate orders are liable to be quashed for gross violation of natural justice.

When the matter was called for hearing, none appeared on behalf of the assessee despite service of notice. However, considering the issue involved, the Bench proceeded to hear the learned Departmental Representative and to dispose of the appeal on the basis of material available on record.

The Ld. DR submitted that the assessee has been persistently non-compliant during the course of assessment as well as appellate proceedings. It was contended that several statutory notices were issued by the Assessing Officer, however, no compliance was made. The Ld. DR further submitted that the addition has been made on the basis of bank transactions and credible material available on record and, therefore, the order of the Ld. CIT(A) confirming the addition deserves to be upheld.

Though none appeared on behalf of the assessee, from the grounds of appeal and material available on record, it transpires that the grievance of the assessee is that the assessment has been framed ex parte and that proper opportunity of being heard was not effectively availed.

We have heard the Ld. DR and perused the material available on record. It is an admitted position that the assessment has been framed under section 144 of the Act due to non-compliance on the part of the assessee and the Ld. CIT(A) has also dismissed the appeal on account of non-prosecution.

1 At the same time, considering the fact that the addition has been made on the basis of bank transactions and estimation of income, and that the assessee has not been able to place any explanation on record, we are of the view that in the interest of substantial justice, one more opportunity should be granted to the assessee to substantiate his case.

2 However, we also note that the conduct of the assessee reflects a casual approach towards statutory proceedings. The assessee has neither complied before the Assessing Officer nor before the Ld. CIT(A), and even before this Tribunal, none has appeared. Such conduct cannot be appreciated and deserves to be discouraged.

3 Accordingly, while setting aside the order of the Ld. CIT(A), we restore the matter back to the file of the Assessing Officer for de novo assessment, subject to the condition that the assessee shall deposit a cost of Rs. 5,000/- for a bona fide cause.

4 The said cost of Rs. 5,000/- shall be deposited by the assessee for the treatment of poor patients belonging to Below Poverty Line category under the supervision and direction of Prof. Vijay G. Goni, Professor, Department of Orthopaedic Surgery, Post Graduate Institute of Medical Education and Research (PGIMER), Chandigarh. The assessee shall furnish proof of such deposit before the Assessing Officer at the time of fresh assessment proceedings.

5 The Assessing Officer shall afford adequate and reasonable opportunity of being heard to the assessee and decide the issue afresh in accordance with law. The assessee is also directed to cooperate and furnish necessary details and evidences without seeking unwarranted adjournments.

6 It is made clear that in case the assessee fails to deposit the aforesaid cost or fails to cooperate in the remand proceedings, the Assessing Officer shall be at liberty to proceed in accordance with law.

In the result, the appeal of the assessee is allowed for statistical purposes. Order pronounced on 22/04/2026 कृणव" सहाय लिलत कुमार (KRINWANT SAHAY) (LALIET KUMAR) लेखा सद"/ ACCOUNTANT MEMBER "ाियक सद" /JUDICIAL MEMBER AG आदेश की "ितिलिप अ"ेिषत/ Copy of the order forwarded to : 1. अपीलाथ"/ The Appellant

""थ"/ The Respondent 3. आयकर आयु"/ CIT 4. आयकर आयु" (अपील)/ The CIT(A) 5. िवभागीय "ितिनिध, आयकर अपीलीय आिधकरण, च"ीगढ़/ DR, ITAT, CHANDIGARH 6. गाड" फाईल/ Guard File