Bhavani Shankar Rao vs. Income Tax Officer

Parties Involved

Facts Summary

The assessee, Bhavani Shankar Rao, is a ration shop dealer distributing essential goods to white ration card holders under the State Government's Public Distribution System. During the assessment proceedings, the Assessing Officer (AO) observed that the assessee made substantial cash deposits during the demonetization period but did not file his income return for the Assessment Year (AY) 2017-18. A notice under section 142(1) of the Income Tax Act, 1961 was issued to the assessee on 02/02/2018 to file the return of income. However, the assessee did not comply with the notices issued on various dates. The AO obtained information from the bank authorities and issued a show cause notice on 19/09/2019 asking the assessee to explain the source of the cash deposits made into his bank accounts during the Financial Year (FY) 2016-17. The assessee did not respond to the notices and summons issued. Consequently, the AO completed the assessment under section 144 of the Act by making additions towards unexplained cash deposits, unexplained online credits, and interest income not offered to tax. The assessee appealed against the order passed by the Chief Income Tax Commissioner (Appeals) - North Functional Area Committee (CIT(A)-NFAC), which was dismissed ex-parte.…

Legal Issues

• 1. Whether the assessment completed under section 144 of the Act is contrary to the facts of the case and provisions of the Law.
• 2. Whether the CIT(A) disposed of the case ex-parte without giving reasonable opportunity to the assessee to present his case.
• 3. Whether the CIT(A) dismissed the case ex-parte while failing to adhere to the provisions of section 250(4) of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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