O R D E R

This appeal has been preferred by the Assessee against the order dated 13.01.2025, passed by the National Faceless Appeal Centre, Delhi (NFAC) for Assessment Year 2016-17.

2.0 The brief facts of the case are that the assessee was engaged in the business of distribution of LPG Cylinders of Indian Oil Corporation (IOCL). The assessee had not filed the return of income for the year under consideration. The Income Tax Department was in possession of information that the assessee had made cash deposits totaling to Rs.2,16,55,900/- in his Bank account during the year under consideration. The Assessing Officer (AO) reopened the case of the assessee under section 147 of the Income Tax Act, 1961 (hereinafter called 'the Act’) after issuing notice to the assessee under section 148 of the Act. As per the AO, the assessee had neither filed the return of income nor responded to the notice under section 148 of the Act. Subsequently, the AO issued notices under section 142(1) of the Act, requiring the assessee to furnish the details of source of cash deposits of Rs.2,16,55,900/- in his Bank account during the year under consideration. However, there was still no compliance from the side of the assessee. The AO, therefore, proceeded to complete the assessment on the basis of Best Judgment Assessment and, accordingly, issued a show cause notice under section 142 of the Act, requiring the assessee to furnish the source of cash deposited in his Bank account. In response to the show cause notice, the assessee submitted that he has filed the return in response to notice under section 148 of the Act, which could be viewed on the Income Tax Portal. It was further submitted that the assessee was running an LPG cooking gas agency of IOCL in the name and style ‘BBS Indane Gramin Vitrak’ at Village Chihiya, Siddharthnagar (U.P) and the cash deposits made in the Bank account were out of the sale proceeds of LPG cylinder, which were mostly realized in cash. After considering the written submissions filed by the assessee, the AO treated the cash deposits of Rs.2,16,55,900/- in the Bank account of the assessee as business receipts and estimated the Net Profit of the assessee from business @ 8%, which came to Rs.17,32,472/- and added the same to the income of the assessee. The AO completed the assessment under section 147 read with section 144B of the Act, assessing the total income of the assessee at Rs.17,32,472/-.

2.1 The AO also initiated penalty proceedings under sections 271(1)(c), 271(1)(b) and 271F of the Act, separately.

2.2 Aggrieved, the Assessee preferred an appeal before the NFAC, which dismissed the appeal of the assessee and confirmed the order of the AO.

2.3 Now the assessee has approached this Tribunal challenging the order of the NFAC, by raising the following grounds of appeal:

1. That the Ld. AO has erred in law by not issuing notice u/s 143(2) of the Act, which was condition precedent for proceeding further, as section 143(2) of the Act mandates the issuance of this notice when a return has been furnished u/s 139 or under section 148 of the Act. Once the ITR is filed, the Ld. AO was obligated to issue notice u/s 143(2), a failure in which is unjustified and has no legal evidence to suffice the same, leading the entire assessment proceedings as devoid of merits and thus the assessment order deserves to be quashed.

2. That the Ld. Assessing Officer has erred in law by rejecting the books of accounts of the assessee without specifically controverting the reasons as to why the same are rejected which is a condition precedent as the assessee had duly filed the Tax Audit report on the due date which contains the balance sheet and profit and loss of the assessee and which were available in revenue records and thus the said rejection is without any basis thereby leading to entire addition being null and void.

3. That the Ld. AO has erred in law by rejecting the books of account without following the due procedure prescribed in sectio