CHINNA REDDY GILLELLA,HYDERABAD vs. DCIT., CIRCLE-3(1), HYDERABAD

Succinctly stated, the assessee had e-filed his return of income for AY 2018-19 on 21/09/2018, declaring an income of Rs.3,24,000/-. Subsequently, the case of the assessee was selected for “limited scrutiny” and notice under section 143(2) of the Act, dated 28/09/2019 was issued to him.

During the course of the assessment proceedings, the assessee was queried about the substantial amount of an agricultural income

Aggrieved, the assessee carried the matter in appeal before the CIT(A). However, as the assessee despite having been afforded sufficient opportunities had failed to participate in the proceedings before the CIT(A), the latter was constrained to proceed with and dispose of the appeal vide an ex-parte order. The CIT(A) after deliberating on the facts involved in the case before him in the backdrop of the view taken by the AO found no infirmity in the same and upheld the addition made by him by recharacterizing the alleged agricultural income of Rs.33.64 lakhs as an unexplained cash credit under section 68 of the Act.

The assessee, aggrieved with the order of the CIT(A) has carried the matter in appeal before us.

We have heard the Learned Authorized Representatives of both parties, perused the orders of the lower authorities and the material available on record.

Shri Venkatesh, CA, Learned Authorized Representative (for short, “Ld. AR”) for the assessee, at the threshold of hearing of the appeal submitted that the present appeal involves a delay of 84 days. Representative (for short, “Ld. Sr-DR”) objected to the seeking of condonation of delay by the assessee appellant.

We have given thoughtful consideration and are of the view that as the delay in filing of the present appeal of 84 days is supported by the reasons leading to the same, thus, the same in all fairness and in the interest of justice merits to be condoned. Our aforesaid view that a liberal approach should be adopted for condoning the delay involved in the appeal is supported by the recent decision of the Hon'ble Supreme Officer, Ward-2, Ambikapur in Special Leave Petition (Civil) Nos. 26310-26311/2024, dated 31st January, 2025. The Hon'ble Apex Court, while setting aside the order of the Hon'ble High Court of Chhattisgarh, which had approved the declining of the condonation of the delay of 166 days by the Income-Tax Appellate Tribunal, Raipur Bench, had observed that a justice-oriented and liberal approach should be adopted while considering the application filed by an appellant seeking condonation of the delay involved in filing the appeal.

Coming to the merits of the case, the Ld. AR submitted that both the authorities below had grossly erred in law and facts of the case in summarily rejecting the assessee’s claim of having earned the agricultural income during the subject year. Elaborating on his contention, the Ld. AR submitted that as observed by the AO in the assessment order, the assessee in order to substantiate his claim of having carried out agricultural activities and derived agricultural income therefrom had uploaded on the ITBA portal on 07/12/2020 and 11/12/2020 the details of the agricultural land held by him, location of land, copy of 7/12 extract, particulars of income from agricultural activities and pass-book. Apart from that, the Ld. AR submitted that the assessee in the preceding years as well as in the succeeding year had admittedly derived agricultural income and disclosed the same in his returns of income for the respective years, which had been accepted by the Department. The Ld. AR based on his aforesaid contention submitted that there was no justification for both the authorities below to have summarily discarded the assessee’s claim of having earned an agricultural income of Rs.33.64 lakhs during the subject year.

Per contra, Ld. Sr-DR submitted that as the assessee had despite specific query by the AO failed to place on record any material which would irrefutably evidence the substantial increase in the agricultural income claimed to have been derived during the subject year as against that for the preceding and succeeding year, the AO had in absence of 8

We find that the assessee pursuant to the directions of the AO had in his attempt to substantiate the claim of having earned agricultural income during the year filed before him the details of agricultural land held by him, location of the land, copy of 7/12 extract, particulars of income from agricultural activities, and pass-book. Apart from that, we find that it is a matter of fact borne from record that the assessee during the preceding years as well as in the immediately succeeding year had disclosed agricultural income though not to the extent reflected by him in his return of income for the year under consideration. In fact, the AO had culled out the details of agricultural income disclosed by the assessee in his return of income for the preceding/succeeding years in the assessment order, which reads as under:

We find substance in the AO’s observation that the agricultural income disclosed by the assessee during the year under consideration of Rs.33.64 lakhs was increased manifold as in comparison with that disclosed by him in the preceding three years as well as the immediately succeeding year. In our view, as the assessee had despite specific direction failed to place on record any documentary evidence which could explain the reason leading to the manifold increase of agricultural income derived by him during the year under consideration as in comparison to the preceding year, the AO was justified in not summarily accepting the same. At the same time, we cannot remain oblivion of the fact that now when the assessee had furnished the details of his agricultural land a/w copy of 7/12 extract, particulars of income from agricultural activities, and pass-book, coupled with the fact that the agricultural income disclosed by him in the aforesaid three preceding years and the immediately succeeding year in his returns of income for the said years had been accepted by the Department and till date had not been dislodged, therefore, there was no justification for the AO to have held the entire amount of agricultural income as claimed by the assessee, as an unexplained cash credit under section 68 of the Act. In our view, considering the agricultural income disclosed by the assessee in the last preceding three years and the immediately succeeding year, the agricultural income derived by the assessee during the subject year on an average of that disclosed in the preceding/succeeding year can Chinna Reddy Gillella vs. DCIT safely be estimated at Rs.4,85,000/-. We thus, in terms of our aforesaid observations scale down the addition made by the AO by treating the entire amount of agricultural income of Rs.33,64,000/- disclosed by the assessee in his return of income for the year under consideration to an amount of Rs.28,79,000/-.

In the result, appeal filed by the assessee is partly allowed in terms of our aforesaid observations.

The Principal Commissioner of Income Tax, Hyderabad.

"वभागीय""त"न"ध, आयकरअपील"यअ"धकरण /DR,ITAT, Hyderabad.

The Commissioner of Income Tax 6. गाड"फ़ाईल / Guard file