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Facts
The assessee, an agriculturist, earned agricultural income of Rs. 1,38,52,500/- but did not file a return of income, believing it was exempt. The AO made an addition of Rs. 1,16,85,227/- under Section 69A of the Act for unexplained income based on bank deposits. The CIT(A) decided the appeal ex-parte due to the assessee's non-appearance.
Held
The Tribunal set aside the order of the CIT(A) and remitted the issue back to the CIT(A) for a fresh decision on merits. This was done to grant the assessee an opportunity to present their case with necessary documents, considering the reasons for non-appearance due to the wife's illness.
Key Issues
Whether the assessee should be granted another opportunity to present their case before the CIT(A) due to valid reasons for non-appearance, and if the addition made by the AO under Section 69A is justified.
Sections Cited
69A, 143(3)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, ‘C’ BENCH : BANGALORE
Before: SHRI LAXMI PRASAD SAHU & SHRI SOUNDARARAJAN K.
ORDER PER SOUNDARARAJAN K., JUDICIAL MEMBER
This is an appeal filed by the assessee challenging the order of the NFAC, Delhi dated 30/09/2024 in respect of the A.Y. 2015-16.
The assessee is an agriculturist, cultivating areca nuts, ginger, coffee etc and earned agricultural income of Rs. 1,38,52,500/-. The assessee also incurred expenditure for earning the said income. The assessee was under the impression that his income is only through agricultural activities and therefore exempt from the provisions of the Income Tax Act and therefore he had not filed the return of income. The AO based on the cash deposits made into his bank account, made an addition of Rs. 1,16,85,227/-. The AO made the addition u/s. 69A of the Act and added the interest income from time deposits and the interest income from the savings bank account and arrived the said income. As against the said order, the assessee filed an appeal before the Ld.CIT(A) and raised several grounds on merits. The Ld.CIT(A) had decided the appeal ex-parte for the reason that the assessee had not filed any written submissions or any evidences in support of the grounds of appeal. As against the said ex-parte order, the assessee is in appeal before this Tribunal.
At the time of hearing, the Ld.AR submitted that the assessment order treating the entire agricultural income as income u/s. 69A of the Act is not correct and further submitted a small paper book in which the assessee explained the reasons for non-appearance before the Ld.CIT(A). The Ld.AR also enclosed the medical records of his wife in support of the reasons stated in the memo for non-appearing before the Ld.CIT(A) and prayed for another opportunity to appear before the Ld.CIT(A) and to file the various documents in support of their grounds of appeal.
The Ld.DR relied on the orders of the lower authorities and prayed to dismiss the appeal.
We have heard the arguments of both sides and perused the materials available on record.
We have perused the assessment order in which the AO had treated the deposits made into the bank account as unexplained income u/s. 69A of the Act. Even though the assessee had furnished most of the details about the ownership of the lands, and the crop information to show that his income is only from the agricultural activities and therefore the said income is not liable to be taxed under the provisions of the IT Act,the AO on the basis that some of the details furnished in respect of the properties are not proper and therefore disallowed the claim and made the addition u/s. 69A of the Act. We have also considered the submission made by the Ld.AR to the effect that the defects mentioned in the assessment order would be properly explained in order to arrive a conclusion that the assessee had only agricultural incomes not liable for tax under the provisions of the IT Act. We have also considered the memorandum filed by the assessee in which the assessee had explained that because of the ill-health of his wife, he was not able to respond to the notices and also not able to file the written submissions and the documents. We have also perused the various medical documents and certificate issued by the doctor which would exhibit that the assessee’s wife was suffering from various ailments and therefore the assessee was not in a position to follow up the appeal hearings.
Considering the above said facts and circumstances, we are of the view that one more opportunity should be granted to the assessee to submit their case before the Ld.CIT(A) by producing necessary documents. Therefore we set aside the order of the Ld.CIT(A) and remit the issue to the file of the Ld.CIT(A) to decide the appeal afresh on merits, after hearing the assessee.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in the open court on 26th February, 2025.