KIRAN BHAIRU TANAVADE,KOLHAPUR vs. INCOME TAX OFFICER, KOLHAPUR, KOLHAPUR

Briefly the facts of the case are as under :

Being aggrieved by the above order of the Ld. CIT(A), the assessee-appellant is in appeal before the Tribunal. It is contended during the course of hearing that the Ld. CIT(A), NFAC ought not to have discarded the evidences filed by the assessee-appellant in respect of the agricultural income / activities carried-out by the assessee-appellant and merely because no return of income was filed, no agricultural income was shown in the original return of income, cannot be a reason to disbelieve the agricultural income of the assessee- appellant. Learned counsel appearing for the assessee submitted that there is no obligation on the part of the assessee to file return of income in absence of any taxable income exceeding the maximum amount not chargeable to tax.

On the other hand, learned Sr. DR vehemently argued that the impugned assessment order of the Assessing Officer should be sustained, inasmuch as, the assessee- appellant had not cooperated with the Assessing Officer during the course of assessment proceedings.

I heard the rival submissions and perused the material on record and the orders of the authorities below. The 4 I.T.A.No.830/PUN./2023 issue in the present appeal relates to the addition on account of unexplained cash deposits in the S.B. A/c of SBI, Sindhudurga Branch, Sawantwadi. No doubt, during the course of assessment proceedings before the Assessing Officer the assessee-appellant neither filed any explanation as to the source of the cash deposits made in the S.B. A/c maintained with SBI Sindhudurga Branch nor filed the return of income. It is only during the course of appellate proceedings before the Ld. CIT(A), the assessee-appellant had filed an explanation stating that the cash deposits in the S.B. A/c of SBI were made out of the agricultural income derived by him in respect of the agricultural activities. The assessee-appellant had filed evidences such as agricultural land holdings held by him, nature of the crop grown and copies of 7/12 extract etc. and certificate from the village Patil. Needless to mention that when additional evidence was filed for the first time by the assessee-appellant before the Ld. CIT(A), it is incumbent upon the CIT(A) to call for a remand report from the Assessing Officer on the additional evidence and based on such remand report, the CIT(A) should decide the matter in issue after considering the explanation tendered in respect of cash deposits. However, in the present case, the CIT(A) merely jumped to the conclusion that the explanation filed by the assessee-appellant is not credible and accordingly confirmed the addition. The Ld. CIT(A) while reaching to such a 5 I.T.A.No.830/PUN./2023 conclusion also noted that the assessee-appellant had not filed return of income disclosing the agricultural income. I find that the reasoning of the Ld. CIT(A) is untenable in the eyes of law, inasmuch as, there is no statutory obligation on the part of an assessee-appellant to file return of income in absence of a taxable income exceeding maximum amount not chargeable to tax. Thus, the approach of the CIT(A) is totally erroneous and cannot be sustained in the eye of law. Therefore, in order to meet the ends of justice, I remit the matter back to the file of Assessing Officer in the interest of substantial justice with a direction to the Assessing Officer to consider the evidences filed and the explanation tendered by the assessee-appellant in respect of the cash deposits before the NFAC and decide issue in accordance with law, after affording reasonable opportunity of hearing to the by the assessee-appellant. Ordered accordingly.

In the result, appeal of the assessee is allowed for statistical purposes.