Mahesh Kumar Sharma Vs ITO (ITAT Agra)
The Income Tax Appellate Tribunal (ITAT), Agra Bench, in the case of Mahesh Kumar Sharma Vs ITO, allowed the assessee, a non-filer, a crucial second chance to explain a significant cash deposit discovered in his bank account. The Tribunal set aside both the ex-parte order passed by the Commissioner of Income-tax (Appeals) [CIT(A)] and the original assessment order, remanding the matter back to the Assessing Officer (AO) for de novo consideration.
Assessment Background and Default
The matter pertained to the assessment year 2019-20. The assessee, Mahesh Kumar Sharma, was identified as a non-filer of income tax returns. The Income Tax Department initiated reassessment proceedings under Section 147 after receiving information that the assessee had made substantial cash deposits, including deposits via bearer’s cheque, totaling ₹1,19,04,250/- in his current account with the Central Bank of India.
The Assessing Officer (AO) issued a notice under Section 148 to initiate the reassessment. However, the assessee failed to respond to this and several subsequent statutory notices. Due to the complete non-cooperation and lack of submissions from the assessee, the AO was compelled to finalize the assessment using the best judgment assessment method under Section 144 read with Section 147. The entire unexplained cash deposit amount of ₹1,19,04,250/- was added to the assessee’s income under Section 69A (Unexplained Money) read with Section 115BBE (Tax on income referred to in Section 68 or Section 69, etc.), leading to a substantial tax demand.
