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Facts
The assessee, D. Selvakumar (HUF), filed an appeal against the order of the CIT(A). The assessee declared agricultural income of Rs.25,13,960/- which was treated as 'income from other sources' by the AO, leading to an addition of Rs.27,60,580/-. The assessment order and the subsequent CIT(A) order were passed ex-parte.
Held
The Tribunal condoned the delay in filing the appeal. Observing that both the AO and CIT(A) passed ex-parte orders and the assessee expressed willingness to produce supporting documents, the Tribunal restored the appeal to the file of the AO for de novo assessment.
Key Issues
Whether the assessee was given sufficient opportunity to present its case and substantiate its claim of agricultural income, and whether the ex-parte orders passed by the lower authorities were justified.
Sections Cited
147, 148, 143(3)
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Income Tax Appellate Tribunal, ‘A’ BENCH: CHENNAI
Before: SHRI ABY T. VARKEY & SHRI S.R.RAGHUNATHA
आदेश / O R D E R
PER ABY T. VARKEY, JM:
1. This is an appeal preferred by the assessee against the order of the Learned Commissioner of Income Tax (Appeals), Addl. JCIT(A)-2, Pune, (hereinafter referred to as “the Ld.CIT(A)”), dated 15.07.2024 for the Assessment Year (hereinafter referred to as "AY”) 2016-17.
At the outset, the Ld. Counsel for the assessee submitted that there is a delay of ‘126’ days in filing of this appeal and explained the reason for cause of delay. Having gone through the facts which led to the delay, we find that there was sufficient cause for the cause of delay and hence, we condone the delay of ‘126’ days and proceed to adjudicate the appeal on merits.
The Ld.AR of the assessee brought to our notice that the impugned order of the Ld.CIT(A) is an ex parte order, therefore, pleaded for one more opportunity to hear and also brought to our notice that the AO also passed an ex parte order and therefore, relying the on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC), he prayed that the assessee may be granted one more opportunity before the AO.
Per contra, the Ld.DR submitted that the assessee shouldn’t be given one more opportunity and also pointed out that during the course of assessment proceedings, the assessee didn’t participate despite six (6)
notices were given to him; and thereafter, during the appellate proceedings, he filed certain additional evidences which was sent by the NFAC to the AO for a Remand Report. And pursuant to it, the AO asked the assessee for certain clarification during the remand proceedings by issuing notice to him. But the said notice/letter was returned by the postal authorities with a remark that “the addressee refused to receive the letter in respect of information given many times”. Therefore, the AO was of the view that the assessee is not interested to participate in the proceedings and doesn’t want to substantiate its claim; and submitted its remand report reiterating his view taken during assessment proceedings; and the Ld.CIT(A) noted that in the absence of proper explanation with supporting evidences with respect to the claim of agricultural income of Rs.25,13,960/-, he concluded that the AO has rightly made addition under the head “income from other sources”. Therefore, according to the Ld.DR, it can be seen that the assessee didn’t bother to participate even during the remand proceedings. Therefore, he should not be given one more opportunity.
We have heard both the parties and perused the material available on record, we find that the assessee is Karta of HUF and it had filed its RoI for AY 2016-17 on 15.07.2016 declaring total income at Rs.2,48,620/- and agricultural income of Rs.25,13,960/- which RoI was selected for scrutiny; and the AO issued six (6) notices but the assessee failed to reply. Therefore, the AO had treated Rs.25,13,960/- as “income from other sources” and disallowed the claim of the assessee that it is agricultural income and made total addition of Rs.27,60,580/-.
Aggrieved, the assessee preferred an appeal before the Ld.CIT(A), wherein the Ld.CIT(A) notes that the assessee had filed copy of Lease Deed dated 20.08.2014 [in Tamil language] copy of VAO certificate dated 20.07.2016 [again in Tamil language] and copy of data containing price of black pepper. Since assessee pleaded for admitting additional evidence as per Rule 46A, NFAC called for Remand Report from the AO and the AO is noted to have submitted the Remand Report on 03.07.2023, wherein, the AO has observed that he had issued notice to assessee vide letter dated 21.06.2023 calling for certain documents/explanation. But the letter/notice was returned un-served by the postal authorities with a remark that “addressee refused to receive the letter in spite of information given many times” and therefore, the AO was of the opinion that the assessee didn’t have any supporting evidence to substantiate its claim that Rs.25,13,960/- was agricultural income. The Ld.CIT(A) thereafter is noted to have asked the assessee’s response to the Remand Report vide letter dated 10.04.2024, but the assessee remained non- responsive. Therefore, the Ld.CIT(A) confirmed the action of the AO.
Before us, the Ld.AR submitted that the notices through the e-mail got delivered in the ‘spam’ account and the notices issued during remand proceedings might have been returned by the postal authorities for reasons best known to them. But assessee asserts that if postal authorities brought any notices, there is no question about him refusing to accept the same when the fact remains that the assessee had filed additional evidences before the Ld.CIT(A). Be that as it may, it is noted that assessment order has been passed ex parte qua assessee and in this regard, the Ld.AR has undertaken to file all the relevant documents to substantiate that Rs.25,13,960/- was the agricultural income of the assessee by producing relevant documents and in order to ensure participation during assessment proceedings the AR has furnished his e- mail ID is: tslakshmivenkataraman@yahoo.co.in. to which id also notice may be sent. Relying on the decision of the Hon’ble Supreme Court in the case of TIN Box Co. v. CIT reported in [2001] 249 ITR 216 (SC) we are inclined to restore the assessment back to the file of the AO for de novo assessment. Therefore, we set aside the impugned order of the Ld.CIT(A) and restore the assessment back to the file of the AO. Since there is negligence on the part of the assessee, cost of Rs.15,000/- is imposed which the assessee should remit to the State Legal Aid Authority, Hon’ble Madras High Court, and produce necessary proof of depositing of the same before the AO and thereafter, the AO to frame the de novo assessment after hearing the assessee in accordance to law. The aforesaid id may also be considered by the AO while issuing notices to assessee.
Order pronounced on the 26th day of May, 2025, in Chennai.