2022 (5) TMI 364 - AT - Income Tax

Reopening of assessment u/s 147 - Unexplained deposit of cash - explanation of the assessee was that the cash was deposited out of cash balance withdrawn from the account, however, no evidence was furnished - HELD THAT - There is no dispute that the assessee had made cash deposits in the bank account. It is categorically recorded by the Assessing Officer that no income-tax return was filed by the assessee. Therefore, at the time of reopening there was no explanation regarding source of cash deposits by the assessee. In our considered view it was sufficient for the Assessing Officer to form a belief that the income chargeable to tax has escaped assessment. Hence, he was justified to reopen the assessment u/s 147 of the Act. After reopening of assessment, the Assessing Officer can in his wisdom proceed to make assessment regarding other issues as well. There is no prohibition under law that the Assessing Officer is required to confine assessment on the issue for which the assessment was reopened by him. Hence, ground nos. 1 and 2 of the assessee s appeal are devoid of any merit and stand dismissed accordingly. Treatment of sum as net profit out of gross receipt - HELD THAT - The assessee has not filed any evidence to controvert the finding of the Assessing Officer. Therefore we do not see any reason to interfere in the finding of the authorities below. Ground no. 2 of the assessee s appeal is dismissed Addition without giving notice to the assessee - HELD THAT - It is seen that the Assessing Officer had given a notice dated 22.12.2018. In response thereto no one attended the proceedings. Therefore, it cannot be inferred that the assessee was not given notice by the assessing Officer. Hence, ground no. 3 of the assessee s appeal has no merit and is rejected accordingly.

Summary

Issues:
1. Validity of reopening of assessment
2. Sustaining the addition of Rs. 3,00,000
3. Making addition without giving notice to the assessee

Validity of reopening of assessment:
The appeal challenged the reopening of assessment under section 147, arguing that the Assessing Officer was not justified in making additions other than what was mentioned in the reopening notice. The Assessing Officer reopened the assessment based on cash deposits of Rs. 3,00,000 in the bank account without any explanation from the assessee regarding the source of the cash deposits. The Tribunal held that the Assessing Officer was justified in reopening the assessment as there was no income tax return filed by the assessee and no explanation provided for the source of cash deposits. The Tribunal emphasized that the Assessing Officer can proceed to assess other issues after reopening, and there is no legal requirement to confine the assessment to the originally mentioned issue. Therefore, the grounds challenging the validity of reopening were dismissed.

Sustaining the addition of Rs. 3,00,000:
The Assessing Officer made an addition of Rs. 1,89,856 as net profit based on the gross receipts of Rs. 18,52,362, as the assessee failed to provide any evidence to counter this finding. The Tribunal upheld the decision of the authorities below, stating that without any evidence from the assessee, there was no reason to interfere with the Assessing Officer's findings. Consequently, the ground challenging the addition was dismissed.

Making addition without giving notice to the assessee:
The assessee contended that additions were made without a show cause notice. However, the Tribunal noted that a notice dated 22.12.2018 was issued by the Assessing Officer, and no one attended the proceedings in response to it. Therefore, the Tribunal rejected the ground challenging the addition made without giving notice to the assessee. Ultimately, the appeal of the assessee was dismissed, and the order was pronounced on 26th April, 2022.