SIRIWARA SANNA RUDRAPPA,KAPPAGAL vs. INCOME TAX OFFICER, WARD 1, BALLARI, BALLARI

The present appeal is delayed by 44 days. Along with the appeal, the assessee has filed an application seeking condonation of the delay, duly supported by the affidavit of the assessee. As per the assessee, he was completely unaware of the impugned order passed by the learned CIT(A), as the e-mail ID provided in Form 35 belongs to his former accountant, who is not currently in contact with him. As per the assessee, he came to know about the impugned order from the Jurisdictional Assessing Officer (“AO”) pursuant to the initiation of recovery proceedings. Thereafter, he engaged a new Chartered Accountant who assisted the assessee in filing the present appeal before the Tribunal. Thus, as per the assessee, due to the aforesaid circumstances, which are completely beyond its control, the present appeal was filed after a delay of 44 days. Having considered the submission made by the assessee in the affidavit as well as the application seeking condonation of delay, we are of the considered view that there was sufficient cause which prevented the assessee from filing the present appeal within the prescribed limitation period. Accordingly, we condone the delay and proceed to decide the appeal.

In this appeal, the assessee has raised the following grounds: - 1. Violation of Principals of Natural justice The Learned Commissioner of Income Tax (Appeals) – NFAC has erred in law and on facts by dismissing the appellant’s appeal solely on the ground of delay in filing, without adjudicating the matter on merits and without considering the legal grounds specifically raised. The CIT(A) failed to examine the documentary evidence and the jurisdictional/statutory objections placed on record. The impugned order thus suffers from violation of principles of natural justice and is liable to be set aside. 2. Jurisdictional Error – Bad in Law 2 The Learned Commissioner of Income Tax (Appeals) – NFAC has erred in law and on facts by failing to consider the specific legal ground that the Assessing Officer, ITO Ward–2, Bellary, wrongly assumed jurisdiction over the appellant’s case without a valid transfer order under section 127 of the Income-tax Act, 1961, from ITO Ward–1, Bellary. The assessment order passed by an officer lacking jurisdiction is illegal, void ab initio, and liable to be quashed. 3. Addition of Cash Deposits u/s 69A – Not Applicable to Agriculturist The learned Assessing Officer (“AO”) erred in making additions of ₹.42,00,000/- u/s 69A without appreciating that the appellant is an agriculturist deriving income solely from agricultural activities and is not obliged to maintain books of account. Section 69A is not applicable in such circumstances, and the addition is unsustainable 4. Addition of ₹.25,50,000/- – Loan Repayments Ignored Without prejudice, the Learned CIT(A) – NFAC erred in sustaining addition of ₹.25,50,000/- u/s 69A of the Act, ignoring the fact and documentary evidence that the appellant had received back interest- free loans advanced to family members in earlier years. 5. Addition of ₹.18,00,000/- – Agricultural Income Ignored Without prejudice, the Learned CIT(A) – NFAC erred in sustaining addition of ₹.18,00,000/- u/s 69A of the Act, disregarding documentary evidence of agricultural income derived from cultivation of crops on owned and leased lands measuring 16 acres. 6. The Levy of Tax under section 115BBE - Bad in law. The Learned AO erred in levying tax u/s 115BBE at 60% on additions made u/s 69A of the Act, without appreciating that section 69A is not applicable to agriculturists. The levy is bad in law, arbitrary, and liable to be deleted. 7. The Tax Rate of 60% Under section 115BBE – Retrospective Application Invalid. The Learned AO erred in applying the enhanced tax rate of 60% u/s 115BBE for AY 2017–18, though the amendment was prospective from AY 2018–19. The retrospective application of the higher rate is bad in law and liable to be quashed

We have considered the submission of both sides and perused the materials available on record. The brief facts of the case are that the assessee, since during the year under consideration, did not file his return of income notice under section 142(1) of the Act was issued calling for the return of income for the year under consideration. However, the assessee neither filed his return of income nor filed any submission or response to the said notice. During the year under consideration, the assessee deposited cash of Rs. 42 lakhs in his bank account maintained with SUCO Bank, Ballari. Upon verification of the information received from the Bank, pursuant to the notice issued under section 133(6) of the Act, it was found that the assessee deposited the said cash during the demonetisation period. During the assessment proceedings, the assessee submitted that he had agricultural land to an extent of 3.99 acres, which was acquired by the Karnataka Industrial Area Development Board, for which he received compulsory land acquisition compensation of Rs. 47,88,000/- on 05.06.2010. As per the assessee, out of the said amount, Rs. 6 lakh was withdrawn and invested in the purchase of land, and the balance amount of Rs. 41,88,000/- was given to his relative for taking a lease of agricultural land. As per the assessee, the advance lent to his relative for the lease of agricultural land was received during the demonetisation period and deposited in the bank account. In the absence of any documentary evidence being furnished by the assessee in support of his claim, the Assessing Officer (“AO”), vide order dated 26.11.2019 passed under section 144 of the Act, treated the entire cash deposit of Rs. 42 lakh as unexplained money of the assessee under section 69A of the Act and added to the total income of the assessee.

The learned CIT(A), vide impugned order, dismissed the appeal filed by the assessee on the grounds of delay of 22 days. Being aggrieved, the assessee is in appeal before us.

As per the assessee, the assessment order dated 26.11.2019, passed by the AO, was received by him on 29.11.2019, and accordingly, the last date for filing the appeal before the learned CIT(A) was 28.12.2019. As per the assessee, since he hails from an agricultural background and was not aware of the legal procedure, he was not aware of the steps to be taken for filing the appeal before the learned CIT(A), and was under the impression that the Assessing Officer or Appeal Officer would call him again to conclude the proceedings. Accordingly, the assessee prayed for condonation of the delay of 22 days in filing the appeals before the learned CIT(A).

We find that the reasons stated by the assessee for seeking condonation of delay before the learned CIT(A) fall within the parameters for grant of condonation laid down by the Hon’ble Supreme Court in the case of Collector Land Acquisition, Anantnag vs. M.S. Katiji and others, reported in 1987 SCR (2) 387. It is well-established that the rules of procedure are handmade of justice. When the substantial justice taking into consideration are pitted against each other, the cause of substantial justice deserves to be preferred. In the present case, it is evident that the assessee did not stand to benefit from the late filing of the appeal.

Accordingly, in view of the facts and circumstances of the present case, as noted above, we are of the considered view that the assessee has proved sufficient cause for not filing the appeal before the learned CIT(A) within the prescribed limitation period. Accordingly, we are of the view that delay should be condoned. Hence, the impugned order is set aside, and the appeal of the assessee is restored to the file of the learned CIT(A) for de novo consideration, after condoning the delay in filing the appeal by the assessee. We order accordingly. Needless to mention, no order shall be passed without affording reasonable and adequate opportunity of hearing to the parties. The assessee is directed to appear before the learned CIT(A) on all dates of hearing as may be fixed without any default. As the matter is being restored to the file of the learned CIT(A) for de novo adjudication, the grounds raised by the assessee in the present appeal before us do not call for adjudication at this stage. Accordingly, the grounds raised by the assessee are allowed for statistical purposes.

As a result, the appeal by the assessee is allowed for statistical purposes. Order pronounced in the open court on 21-Aug-2026.