MOHAMMED SHABBEER HUSAIN KEMBHUI ,YADGIR vs. INCOME TAX OFFICER, WARD-1, , YADGIR

The commons grounds raised by the assessee for both AYs pertain to the addition made by the Assessing Officer (AO) towards unexplained cash deposits in the bank accounts and alleged bogus turnover. The assessee also raised legal grounds on the validity of reopening of assessment.

The assessee is an individual engaged in the business of trading in Toor. The assessee did not file the return of income for both the assessment years 2015- & 1702/Bang/2024 Mohammed Shabbeer Housain Kembhui 16 and 2018-19. Based on the information that the assessee has made substantial cash deposits in various bank accounts the AO reopened the assessment for both the assessment years under consideration. The assessee in response to notice u/s. 148 of the Income Tax Act, 1961 (the Act) filed return of income for AYs 2015- 16 & 2018-19. The AO issued various notices to the assessee and the assessee has responded to few of the notices to make submissions. Since the assessee did not respond to the Show Cause Notice (SCN), the AO completed the assessment u/s. 147 r.w.s. 144 r.w.s. 144B of the Act in which the AO made additions towards alleged bogus sales and cash deposited from undisclosed sources. For AY 2015- 16 the AO also made addition of Rs. 1,28,002/- u/s. 56 of the Act. Aggrieved, assessee filed further appeal before the CIT(A).

Before the CIT(A) besides the grounds on merits, the assessee raised additional grounds contending that section 68 cannot be applied in respect of income from a source which has already been taxed which would amount to double taxation. The assessee also raised the additional ground that no addition can be made u/s. 68 where the books of accounts have been rejected by the AO and that the income should have been estimated on reasonable basis once the books are rejected. Before the CIT(A) the assessee also furnished various details such as invoices, bank statements etc., along with written submissions contending that the additions made by the AO are not tenable on merits. The CIT(A) adjudicated only the additional grounds rejecting the contentions of the assessee and confirmed the additions made by the AO based on the additional grounds raised by the assessee. The assessee is in appeal before the Tribunal against the order of the CIT(A).

The learned A.R. submitted that the assessee is hailing from a small town and is not well educated. Therefore is submitted that the assessee was not aware of the various notices issued by the AO. The ld AR further submitted & 1702/Bang/2024 Mohammed Shabbeer Housain Kembhui that the assessee has responded to few of the notices but could not submit the complete details sought for by the AO due to lack of sufficient time being provided to submit the details by the AO. The learned A.R. also submitted that before the CIT(A) the assessee furnished all the details but the CIT(A) adjudicated only the additional grounds raised by the assessee and has not adjudicated the main grounds which the assessee raised on merits. Accordingly the learned A.R. prayed for one more opportunity to contend the additions made on merits before the lower authorities.

The learned D.R., on the other hand, submitted that the assessee has been non cooperative and therefore supported the orders of the lower authorities.

We have heard the rival contentions and perused the material on record. Based on the information that the assessee has deposited cash in various bank accounts and not filed return of income the AO reopened the assessment u/s. 147 of the Act. From a perusal of the assessment order as extracted below we notice that the assessee has responded to the notices issued u/s. 142(1) of the Act but has not responded to the show cause notice: -