Even in Ex-Parte Assessment, Gross Deposits Can’t Be Taxed as Income: ITAT Remands with Cost

Nagaraju Kesturkoppal Ramegowda Vs ITO (ITAT Bangalore) The assessee faced an ex-parte assessment under Section 144 where the AO treated entire bank deposits as unexplained income under Section 69A due to lack of response. The CIT(A) dismissed the appeal on grounds of massive delay (1969 days) without examining merits. The ITAT condoned the delay considering financial hardship, business closure, and lack of awareness, emphasizing that substantial justice must prevail. It observed that even in ex-parte cases, the AO is duty-bound to make a fair and scientific assessment, and cannot arbitrarily ...