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Facts
The assessee, an individual and partner in M/s Venkateswara Petroleum, did not file her return of income for AY 2017-18. The AO made an ex-parte assessment under section 144, adding 10% of bank deposits found in her account as business income, which was subsequently confirmed by the CIT(A) who dismissed the appeal for non-prosecution. The assessee claims the deposits pertained to the partnership firm whose PAN was erroneously replaced by her individual PAN in the bank records, and the firm had already filed its return.
Held
The Tribunal set aside the ex-parte orders of the lower authorities and remitted the matter back to the Assessing Officer for a de novo assessment. The AO is directed to provide a fresh opportunity of hearing, and the assessee is to provide all necessary evidence to support her contention that the bank deposits belonged to the partnership firm. The grounds of appeal were allowed for statistical purposes.
Key Issues
Validity of ex-parte assessment under Section 144 and dismissal by CIT(A) when assessee claims bank deposits relate to a partnership firm and not her individual income.
Sections Cited
Section 142(1), Section 144, Section 44AB
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, PUNE BENCH “A”, PUNE
Before: SHRI R. K. PANDA & SHRI VINAY BHAMORE
This appeal filed by the assessee is directed against the order dated 13.02.2025 passed by Ld. Addl./JCIT(A), Raipur [„Ld. CIT(A)‟] for the assessment year 2017-18.
Assessee has raised following grounds of appeal:-
1. On the facts and in the circumstances of the case the AO erred in law and on merit in making additions of 23,41,115/- as a profit of busines on the basis of assumption that total sales transaction is of Rs. 2,34,11,155/- and total income is computed @ 10% of total sales turnover i.e. Rs. 23,41,115/- is made on account of business income.
2. On the facts and in the circumstances of the case the AO erred in law and on merit in making additions of 23,41,115/- as profit of assessee business, when the cash trsaction were related to partnership firm and firm had already filed return of income for the same.
3. The assessee prays for leave to raise additional grounds of appeal if Sound necessary during appeal and alter, modify or withdraw any ground raised in the appeal.
Facts of the case, in brief, are that the assessee is an individual & claims to be partner of M/s Venkateswara Petroleum and has not furnished its return of income for the year under consideration. On the basis of information available with the Department that the assessee has deposited total amount of Rs. 2,34,11,155/- in its bank accounts and has not furnished her return of income for the year under consideration the case was selected for scrutiny and statutory notices under section 142(1) of the IT act and show-cause notices were also issued to the assessee. The assessee did not comply with any of the above notices therefore, the assessing officer completed the assessment under section 144 of the IT act and vide order dated 25 November 2019, determined total income at Rs. 23,41,115/- by applying Net profit rate of 10% on bank deposits . The above assessed income includes addition of Rs. 23,41,115/- being estimated income from petrol pump business.
Being aggrieved with the above assessment order the assessee preferred an appeal before the learned CIT(A). Since the assessee remained absent learned CIT(A) dismissed the appeal filed by the assesse for want of prosecution.
It is the above order against which the assessee is in appeal before this tribunal.
We have heard the learned counsel‟s from both the sides and perused the material available on record including the paper book furnished by the assesse. In this regard we find that the assessee is an individual and partner of M/s Venkateswara Petroleum . It is the contention of learned counsel of the assessee that the impugned bank account pertains to partnership firm business run under the name and style of M/s Venkateswara Petroleum having pan AALFV4475H and the deposits made in this bank account have already been considered in the books of accounts of partnership firm and were subject to audit under section 44 AB of the IT act. It was also contended before the bench that the partnership firm has already furnished its return of income for the year under consideration after considering the impugned transactions of bank deposits and copy of ITR V is furnished in the paper book. It is the contention of the assessee that in the above bank account instead of PAN number of the partnership firm wherein the assessee is a partner, the PAN number of the assessee was mentioned. Accordingly it was contended before the bench that the impugned bank deposits have already been considered by the partnership firm since the deposit pertains to sale receipt arising during the course of petrol pump business run under the name and style of M/s Venkateswara Petroleum and due to an advertent error the PAN number of assesse was mentioned instead of partnership firm‟s PAN number. It is the sole prayer of learned counsel of the assesse that the issue may kindly be restored back to the file of the assessing officer for De Novo assessment so that the assessee can produce evidences/documents in support its contentions that the bank deposit pertains to the partnership firm and does not pertain to the assessee who is only a partner in the above partnership firm. It was also the submission of the assessee that the email of the erstwhile consultant was mentioned therefore the notices could not be seen by the assessee which resulted in ex-parte order by both the subordinate authorities.
Considering the totality of the facts of the case and in the interest of justice and without going into the merits of the case we deem it appropriate to set aside the ex-parte order passed by learned CIT(A) and restore the matter back to the file of the assessing officer with a direction to pass assessment order afresh and as per fact and law after providing reasonable opportunity of hearing to the assessee. The assessee is also hereby directed to respond to the notices issued by the assessing officer in this regard and also directed to produce evidences documents and submissions in support of its contentions without taking any adjournment under any pretext otherwise the assessing officer shall be at liberty to pass appropriate order as per law. The grounds of appeal
raised by the assessee are allowed for statistical purposes.
8. In the result the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced on this 16th day of March, 2026.