Yakin Jayantilal Shah Vs ITO (ITAT Ahmedabad)
Assessee, an individual engaged in small trading business, filed returns u/s 139(1) declaring modest income. Based on information from search on Shri Renuka Mata Multi-State Urban Co-op Credit Society Ltd. (RMM) on 26.05.2017, AO found substantial cash deposits in assessee’s accounts with RMM, allegedly disproportionate to returned income. AO issued notice u/s 148 for AYs 2013-14 to 2017-18 & completed ex-parte reassessment u/s 147 r.w.s. 144B & 144, adding entire cash deposits u/s 69A as unexplained money, without allowing any deduction or verifying source. Assessed income shot up from around ₹2-3 lakh to ₹40-95 lakh in each year.
Assessee appealed before CIT(A) & filed Rule 46A evidence. It was shown that all departmental notices were sent to email of former CA who had expired, causing total non-receipt. Due to this, Assessee could not respond. CIT(A) accepted lack of proper service & noted that assessment was best judgment u/s 144 without adequate opportunity. Citing Finance Act 2024 amendment to section 251, CIT(A) held that he now has power to set aside u/s 144 assessments. Accordingly, CIT(A) set aside all reassessments & remanded matters to AO for fresh adjudication on merits after giving opportunity. Appeals were allowed for statistical purposes.
