Hameed Abdul Vs ITO (ITAT Bangalore)
Cash Sales Cannot Be Cycled Into Unexplained Money u/s 69A Without Examining GST/VAT Records: ITAT Gives Cycle Trader a Fresh Opportunity
Summary: The assessee was a proprietor carrying on the business of trading in cycles & cycle spare parts under the name M/s Bharath Cycle, Mysore. He had not filed his return of income for AY 2018-19.
Based on information regarding certain high-value transactions & substantial cash deposits, reassessment proceedings were initiated after following the procedure prescribed u/s 148A of the Income-tax Act.
At the preliminary stage, the assessee filed a reply enclosing his computation of income & profit and loss account. He claimed that no return had been filed because his income was below the taxable limit. The AO was not satisfied with the explanation & proceeded to issue notice u/s 148, followed by notices u/s 142(1) calling for further details.
Notices Served, Time Sought—but Details Never Filed
The assessee did not comply with the notices u/s 142(1). The AO thereafter issued a show-cause notice proposing to complete the assessment u/s 144. Although the assessee sought additional time, the required details were not furnished.
Apart from electronic service through the portal, a notice sent by speed post was also duly served. The Department’s Verification Unit examined the assessee’s authorised representative & recorded his statement u/s 131(1)(d). The representative agreed to furnish the supporting particulars but ultimately failed to do so.
