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Income Tax Appellate Tribunal, “SMC - B” BENCH : BANGALORE
Before: SHRI N. V. VASUDEVAN
O R D E R This is an appeal by the assessee against order dated 11.10.2022 of NFAC, Delhi, relating to Assessment Year 2017-18.
There is a delay of about 81 days in filing this appeal. In an application for condonation of delay in filing the appeal, it has been stated that the First Appellate Authority passed an ex-parte order partly allowing the appeal of the assessee. The assessee is a senior citizen and not educated. He is residing in mofussil areas i.e., Kunigal and is not aware of the intricacies of e-tax proceedings. He therefore did not respond to notice issued nor instructed his tax practitioner. The assessee was not aware of the passing of the ex-parte order by the First Appellate Authority and came to know about the same only when he received notice for recovery of outstanding demand on 21.11.2022. It has also been submitted that the Income Tax Practitioner who was handling the assessee’s case was not keeping well and even the staff of the Income Tax Practitioner did not inform the assessee about the ex-parte order. After the receipt of notice for recovery of outstanding demand, the assessee contacted the Income Tax Practitioner who advised the assessee to contact the present counsel. Thereafter the appeal was filed by the assessee before the Tribunal. It has also been submitted that delay in filing the appeal is not willful or wanton and has occurred due to bonafide circumstances explained above.
The assessee has also relied on the following decisions in support of his pela for condonation of delay in filing the appeal, viz., decision of the Hon'ble Apex Court in the case of Collector, Land Acquisition Vs. MST. Katiji and Others [1987] 167 ITR 471 and also in the case of Concord of India Insurance Co. Ltd., Vs. Smt. Nirmala Devi and Others 118 ITR 507. Further the assessee has also placed reliance on other decisions of the Hon'ble Apex Court in the case of Radha Krishna Rai Vs. Allahabad Bank Et Others [2009] 9 SCC 733; Ram Nath Sao alias Ram Nath Sahu Et Others Vs. Gobardhan Sao 8c Others, reported in [2002] 3 SCC 195 and CIT Vs. West Bengal Infrastructure Development Finance Corporation Limited [2011] 334 ITR 269 [SC]. The crux of the ratio laid down in these decisions is to the effect that procedural technicalities should not stand in the way of substantive justice, especially in tax proceedings and when there is no willful neglect on the part of the party seeking relief.
The learned Counsel for the assessee reiterated the plea as contained in the application for condonation of delay. The learned DR opposed the prayer for condonation of delay.
After considering the rival submissions, I am of the view that considering the fact that the assessee is an agriculturist and from a rural background having no knowledge about the Income Tax e-proceedings, the delay in filing the appeal has to be condoned. The circumstances under which the delay occurred also shows that there is no lack of bonafides on the part of the assessee and there has been no wanton negligence on his part. I, therefore, condone the delay in filing the appeal of the assessee.
In so far as the merits of the appeal of the assessee is concerned, the assessee is an individual who filed return of income for Assessment Year 2017-18 declaring a total income of Rs.1,62,840/-. His total income is less than the taxable income limit. The income declared comprised of income from house property and income from other sources being interest income. The assessee declared agricultural income of Rs.42 lakhs. The AO called upon the assessee to file proof of having earned agricultural income. The assessee filed RTC/PANI of the land on which agricultural activities were carried on. According to the AO, since there was no evidence regarding earning of agricultural income by the assessee, opinion of the Horticulture Department was required to be obtained. Accordingly, the details of land holdings of the assessee were forwarded to the Horticulture Department. In a letter dated 06.09.2019, Horticulture Department opined that the assessee would have earned agricultural income of Rs.20,00,363/-. In another letter dated 10.12.2019, the Office of the Agricultural Directorate, Kunigal, revised the estimate of the agricultural income at Rs.31,78,306/-. The AO took cognizance of the first letter dated 06.09.2019 and estimated the agricultural income of the assessee at Rs.20,00,363/- and treated the difference between the sum of Rs.42 lakhs declared by the assessee and the agricultural income estimated by him, viz., a sum of Rs.21,20,834/- as income from other sources. The CIT(A) held that the income from agriculture has to be estimated on the basis of the subsequent letter of the Horticulture Department dated 10.12.2019 at Rs.31,17,306/-as against the sum of Rs.20,00,363/- estimated by the AO. Thus the Assessee got part relief from the first appellate authority. Still aggrieved, the assessee is in appeal before the Tribunal.
I have heard the rival submissions. In the assessment proceedings of the Assessee for Assessment Year 2015-16, the assessee declared income agriculture at a sum of Rs.22 lakhs. In that year, the Horticulture Department estimated the agricultural income earned by the assessee at Rs.42,64,371/-. The income declared by the assessee in that year was accepted by the AO in an Order of Assessment passed under section 143(3) of the Act dated 21.09.2017. It is therefore clear that in Assessment Year 2015-16, the estimate of income by Horticulture Department was accepted by the Department. The extent of land holding and the nature of crops raised by the assessee are not materially different from Assessment Year 2015-16 and Assessment Year 2017-18 as stated by the learned AR. Besides the above, the certificate given by the Horticulture Department dated 10.12.2019 estimating income of Assessee at Rs.31,78,306/-, a copy of which is at page 16 of the assessee’s Paper Book, does not estimate income from crops grown in areas which do not fall within the Zilla Panchayat, Kunigal. It is not in dispute that the assessee owns agricultural income in areas which fall outside the jurisdiction of the Zilla Panchayat of Kunigal. Moreover, in the certificate dated 10.12.2019, there is no reference to sugarcane grown by the assessee and without considering the income from sale of sugarcane, the income from agriculture has been estimated at Rs.31,78,306/-. The learned Counsel for the assessee has drawn our attention to the assessee’s bank account with Indian Overseas bank, Kunigal, wherein it is evident that the assessee received payments by cheques from NSL Sugars Ltd., of Rs.2,91,510/- on 22.11.2016 and Rs.54,452/- on 29.06.2016, Rs.53,397/- on 22.06.2016, Rs.29,180/- on 21.06.2016, Rs.1,41,363/- on 05.06.2016. Besides the above, certain other similar payments have been received by the assessee from NSL Sugars Ltd. These payments are towards payment for sale of sugarcane by the assessee. A copy of the bank statement is at Page 57 of the assessee’s Paper Book. I am of the view that the receipts from NSL Sugars Ltd., evident by the entries in the Paper Book of the assessee’s bank account should also be regarded as income from agriculture and due credit should be given to the assessee in determining the agricultural income of the assessee, over and above, the agricultural income estimated by the First Appellate Authority. With these observations, I partly allow the appeal of the assessee.
In the result, appeals of the assessee is treated as allowed partly allowed.
Pronounced in the open court on the date mentioned on the caption page.