M/s. Sanjay Enterprises Vs. The Income Tax Officer, Ward – 2, Raichur

Parties Involved

Facts Summary

The assessee, M/s. Sanjay Enterprises, had not filed its return of income. Based on information available in the AIMS module of the ITBA, the Assessing Officer (AO) found that the assessee had deposited cash of Rs. 7,10,000/- in the savings bank account of the assessee firm and also withdrew cash totaling Rs. 5,88,81,000/- from the current account. Consequently, the assessment was reopened under section 147 and notices were issued, to which the assessee did not reply and did not file its return of income. The AO treated the cash deposits as unexplained money and added them under section 69A of the Act. Similarly, the AO added the cash withdrawal as unexplained expenditure under section 69C of the Act. The assessee filed an appeal before the Ld.CIT(A), contending that they had not received any communications on their registered email IDs and thus were unable to appear before the AO. The Ld.CIT(A) dismissed the appeal for non-prosecution. The assessee then appealed to the Tribunal, arguing that the notices were not received and thus the ex-parte orders were against the principles of natural justice.…

Legal Issues

• 1. Validity of the notice under section 148 against a non-existent entity.
• 2. Validity of the reassessment based on bank account entries operated by the proprietor.
• 3. Validity of the assessment made under sections 147, 144, and 144B of the Act.
• 4. Whether the learned assessing authority failed to appreciate that the business was carried on by the proprietor who regularly filed returns.
• 5. Whether the learned Assessing Authority appreciated the lack of communication due to the email ID being outdated.
• 6. Validity of issuing a notice to a dissolved firm for the assessment year 2017-18.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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