AJEET KUMAR SINGH,GHAZIPUR vs. ITO, RANGE - 3(5), GHAZIPUR

Nobody appeared on behalf of the assessee when this appeal was called for hearing. Since the assessment order was passed under section 144 r.w.s. 147 and the impugned order of the CIT(A) was also passed ex parte due to non-appearance of the assessee before the CIT(A) therefore, this appeal was taken up for hearing and disposal ex parte.

The learned DR has submitted that the assessee has not appeared either before the Assessing Officer or the CIT(A) despite several opportunities were granted by them. He has pointed out that the assessee is a Liquor Contractor and declared total income of Rs. 2,36,540/-. The Assessing Officer received the information about the credit balance in the UCO Bank account of the assessee which is not declared by the assessee in books and particularly in the balance-sheet. The Assessing Officer accordingly reopened the assessment and issued notices under section 142(1) to the assessee to explain the source of the deposit in the bank account. Despite repeated notices and specifically pointing out that it is a time barring case, the assessee did not furnish any detail. Ultimately, the assessee explained the source of deposit in the bank account as it is past savings of the family members of the assessee including the father and brothers as well as the amount received on dissolution of partnership firm. Except this contention, the assessee has not furnished any record in support of this explanation and consequently the Assessing Officer made an addition of Rs. 29,50,166/-. Further, as per Form 26AS, the total purchases are shown at as Rs. 45,78,065/-, whereas the assessee has shown the purchases in the profit and loss account only Rs. 43,39,920/-. Accordingly, the Assessing Officer estimated the sale of the assessee based on the purchases of Rs. 45,78,065/- to the tune of Rs. 60,00,000/- and estimated the net profit by applying the rate 8% which comes to Rs. 4,80,000/- as against the income declared by the assessee at Rs. 2,36,540/-. Hence, and addition of Rs.. 2,43,458/- was made by the Assessing Officer. The assessee has not appeared before the CIT(A) despite several opportunities were granted and therefore, the appeal was decided ex parte by the CIT(A) upholding the order of the Assessing Officer. He has relied upon the orders of the authorities below.

I have considered the submissions of learned DR and perused the order of the Assessing Officer as well as CIT(A). The Assessing Officer has made two additions; one on account of credit found in the UCO Bank of Rs. 29,50,166/- which was not shown in the balance-sheet of the assessee and second due to discrepancy of the amount of the purchases declared by the assessee and shown in Form No. 26AS. It is evident from the record that the assessee raised an issue of validity of assessment for want of the service of notice under section 148. Since the assessee has not appeared before the CIT(A) and CIT(A) has dismissed this ground of the assessee by giving a reasoning that the assessee has not brought anything on record to show that the said notice was not served. It is pertinent to note that once the assessee has denied the service of the notice under section 148 then the assessee cannot be asked to prove the negative being not receiving the notice under section 148. Rather the assessment record was required to be verified to ascertain 2 that the notice issued under section 148 is a valid notice and was duly served on the assessee. Therefore, this issue goes to the root of the matter and requires to be decided after considering the assessment record particularly the fact of service of notice issued under section 148 then applied the legal proposition on the point. Since the impugned order was passed ex parte therefore, the same is set aside and the matter is remanded to the record of the CIT(A) for deciding the same afresh after giving one more opportunity of hearing to the assessee. The other grounds raised