G. RAJAGOPALAN,CHENNAI vs. ITO, NCW - 7 (3), CHENNAI

This is an appeal filed by the assessee against the order of the learned Commissioner of Income Tax (Appeals)-7, Chennai in appeal No.I.T.A. No.154/CIT(A)-7/2018-19 dated 28.06.2019 for the Assessment Year 2011-2012.

It was submitted by the learned Authorized Representative that the Assessee is a seventy-seven years old individual, who is doing a minor electrical contract business. It was a submission that admittedly, notice u/s.148 had been issued on the assessee to which the assessee had not responded. Subsequently on 07.12.2018, a show-cause notice had been issued to the assessee, wherein the Assessing Officer had proposed to assess the income of Rs.11,16,303/-. It was a submission that the assessment came to be completed u/s.144 r.w.s.147 on 17.12.2018, wherein the Assessing Officer has added the cash deposits in the bank account of the assessee, investment in bonds and debentures and the income of the assessee was estimated at the rate of 20% of Rs.27,06,516/- which was treated as the business of the assessee. It was a submission that the assessee had filed the return of income for the assessment year 2010-2011 on 25.03.2019, wherein the assessee had computed his total income from the business by applying the provisions of Section 44AD of the Income Tax Act, 1961. It was a submission that the income of the assessee, having been determined in the show-cause notice at Rs.11,16,303/-, the assessment of the assessee’s income being far above the said amount was erroneous. It was a submission that the 3 -: learned Commissioner of Income Tax (Appeals) had dismissed the assessee’s appeal without considering any of the submissions of the assessee. It was a prayer that the assessee may be granted an opportunity to substantiate his case before the Assessing Officer.

In reply, the learned Departmental Representative vehemently supported the assessment order and the order of the learned Commissioner of Income Tax (Appeals). It was a submission that the assessee has been absolutely non- cooperative and even after the show-cause notice has been issued, the assessee had failed to file his return. It was a submission that the return now filed by the assessee is an invalid return. It was a prayer that the assessment order and the order of the learned Commissioner of Income Tax (Appeals) be upheld.

I have heard both the sides through Video-Conferencing and considered the submissions and perused the materials available on record.

Admittedly, the return filed by the assessee on 25.03.2019 is an invalid return. However, the evidences as available in the said return show that the assessee has shown his income to be determined by applying the provisions of Section 44AD of the Income Tax Act 1961. The assessee has also shown the income under the head, ‘other sources’ being interest on the Fixed Deposit receipts at Rs.8,03,258/-. This income admittedly had not 4 -: been considered by the Assessing Officer in the assessment which could be on account of the fact that the evidence was not available before him. It is also noticed that the assessee had made cash deposits in the bank accounts. The assessee has to explain the nature of the deposits, whether it is from his business or whether it is in the nature of loans. This being so, in the interest of natural justice, I am of the view that the issues in this appeal must be restored to the file of the Assessing Officer for re-adjudication and I do so.

In the result, the appeal of the assessee in is partly allowed for statistical purpose.