Subhash Chand vs The ITO

Parties Involved

Facts Summary

Subhash Chand, an individual running a small barber shop at Kaithal, had reported an income of Rs. 1,30,500/- for the relevant Assessment Year. The case was assessed under section 147 based on information that he had deposited a sum of Rs. 17,15,000/- in his bank account. The assessment was completed under section 143(3) r.w.s 147, where the Assessing Officer (AO) made an addition of Rs. 9,50,000/-. Subhash Chand appealed against the order before the Commissioner of Income Tax (Appeals) (CIT(A)), who dismissed the appeal ex-parte without any request being made by the assessee and in violation of the Vivad Se Vishwas Scheme Act. The assessee had initially thought of opting for the Direct Tax Vivad Se Vishwas Scheme but did not proceed due to financial difficulties. The assessee consistently submitted replies on merits along with evidence, explaining that the unexplained deposit of Rs. 9,50,000/- was made out of sale proceeds from his shop and cash withdrawals as evidenced by the registered sale deed and bank statement.…

Legal Issues

• 1. Whether the Ld. CIT(A) erred on facts and in law in dismissing the appeal against the impugned assessment order?
• 2. Whether the Ld. CIT(A) has erred in law and on facts in not deciding the appeal on merits and dismissing the appeal ex parte without any request being made by the assessee?
• 3. Whether the Ld. CIT(A) has erred in law and on facts in not appreciating that the declaration/Form 3 under the Direct Tax Vivad Se Vishwas Act is null and void in case of non payment of requisite amount?
• 4. Whether the Ld. CIT(A) has erred in law and on facts in not appreciating that the impugned assessment order was bad in law in the absence of issuance of mandatory notice u/ s 143(2) r.w.s 147 of the Act?
• 5. Whether the Ld. AO has erred in law and on facts in making an addition of Rs. 9,50,000/- in a mechanical manner without appreciating the documentary evidences, including sale deed, furnished by the assessee?
• 6. Whether the Ld. AO has erred in law and on facts by unreasonably rejecting the explanation and documentary evidences furnished by the assessee, without carrying out any verification or enquiry into the material placed before him?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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