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Facts
The assessee, proprietor of Irshal Agencies, did not file a return for AY 2015-16. The AO identified cash deposits of Rs. 1,43,41,285/- in his SB account, issued a notice under Section 148, and despite a return being filed, the assessee failed to comply with a notice under Section 142(1). Consequently, the AO estimated income at 8% of the cash deposits, resulting in an addition of Rs. 9,15,532/-, which was confirmed by the CIT(A).
Held
The Tribunal held that the assessee consistently failed to comply with the notice issued under Section 142(1) by the AO, CIT(A), and even before the Tribunal, without providing any valid reasons. Given this persistent non-compliance, the Tribunal found no grounds to interfere with the lower authorities' decision to estimate income. Consequently, the appeal was dismissed.
Key Issues
Whether the CIT(A) was justified in confirming the estimation of income at 8% of cash deposits as business turnover, particularly when the assessee failed to comply with notices under Section 142(1) despite claiming audited books.
Sections Cited
148, 142(1)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, COCHIN BENCH
Before: SHRI INTURI RAMA RAO, AM
Assessment Years: 2015-16 Chandanth Irshad .......... Appellant Irshad Agencies, Chandanth, Andathode Thrissur 679564 [PAN: AEFPI2931B] vs. ITO, Ward -1 & TPS, Guruvayoor .......... Respondent Assessee by: Shri Narayanan P. Potty, Advocate Revenue by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 28.10.2025 Date of Pronouncement: 10.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 11.07.2025 for Assessment Year (AY) 2015-16.
Brief facts of the case are that the appellant is an individual and proprietor of the firm Irshal Agencies carrying on the business of trading in cattle feed. No regular return of income for AY 2015- 16 was filed by the appellant. Subsequently, the AO, based on the information available in the AIMS module of ITBA that the appellant had deposited cash in SB account aggregating to Rs. 1,43,41,285/-, formed an opinion that income escaped assessment to Chandanth Irshad tax. Accordingly, a notice u/s. 148 of the Income Tax Act, 1961 (the Act) was issued on 31.03.2021. In response to the notice u/s. 148, the appellant filed the return of income on 09.08.2021 declaring income of Rs. 2,34,600/-. The appellant had not furnished the information sought by the assessing authority in response to the notice issued u/s. 142(1) of the Act. In the circumstances, the AO treated the entire cash deposits as business turnover of the appellant and estimated the income at 8%. Accordingly, he made addition of Rs. 9,15,532/-.
Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO.
Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal.
The learned counsel for the assessee contended that the AO ought not have estimated the income of the appellant in view of the fact that the books of account were audited. Further, it is submitted that estimation of profit at 8% is arbitrary and excessive.
On the other hand, the learned Sr. DR submits that the assessee had failed to comply with the notice issued by the AO u/s. 142(1) of the Act. Even before the CIT(A) no information was filed by the appellant in support of the return of income filed in response to notice u/s. 148 of the Act.
Chandanth Irshad 7. I heard the rival contentions and perused the material available on record. The issue that arises in the present appeal is whether the CIT(A) is justified in confirming the estimation of income at 8% treating the cash deposits as business turnover of the appellant. On mere perusal of the assessment order, it would reveal that the appellant had failed to comply with the notice issued by the assessing authority calling for information u/s. 142(1) of the Act. The appellant took the plea that the books of accounts are audited and, therefore, estimation of profit is unwarranted. Even before the CIT(A), no pleadings were made as to how he was prevented from filing the information sought for by the assessing authority. Similarly, even before this Tribunal no submissions were made as to the reasons for noncompliance of notice u/s. 142(1) of the Act. In the circumstances I do not see any reason to interfere with the orders of the learned lower authorities. Accordingly, I do not find any merit in the appeal filed by the assessee.
In the result, the appeal filed by the assessee stands dismissed.
Order pronounced in the open court on 10th November, 2025.