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Facts
The assessee, an individual, deposited Rs. 27,39,424/- in his savings bank account during the demonetization period, claiming it as agricultural income. The AO found this unsubstantiated and added the entire amount as unexplained income, assessing the total income at Rs. 24,39,424/-. The CIT(A) dismissed the assessee's appeal.
Held
The Tribunal noted that the lower authorities passed orders without giving proper opportunity to the assessee. Upholding the principles of natural justice, the Tribunal set aside the CIT(A)'s order and remitted the matter back for fresh adjudication with a direction for a reasonable opportunity of hearing.
Key Issues
Whether the lower authorities erred by not providing a proper opportunity to the assessee to present their case and substantiate their claim of agricultural income.
Sections Cited
143(3), 69
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Income Tax Appellate Tribunal, ‘D’ BENCH: CHENNAI
Before: SHRI SS VISWANETHRA RAVI & SHRI JAGADISH
आदेश / O R D E R
PER JAGADISH, A.M : Aforesaid appeal filed by the assessee for Assessment Year (AY) 2017-18 arises out of the order of Learned Commissioner of Income Tax, National Faceless Appeal Centre (NFAC), Delhi [hereinafter “CIT(A)”] dated 19.06.2024 in the matter of assessment framed by Ld. Assessing Officer [AO] u/s. 143(3) of the Income-tax Act, 1961 (hereinafter “the Act”) on 22.11.2019.
There is a delay of 122 days in filing the appeal by the assessee.
The assessee has filed condonation petition stating the reasons for delay in filing the appeal. We have considered the petition of delay in filing the appeal and satisfied that there was sufficient cause for not filing the appeal within the prescribed time limit. Hence, the delay is hereby condoned.
The brief facts of the case are that the assessee is an individual.
The assessee has filed return of income on 28.03.2018, admitting total income of Rs.23,39,910/-. During the course of assessment proceedings, the A.O found that the assessee had deposited cash of Rs.27,39,424/- in his savings bank account during demonetization period. The A.O therefore issued a show cause notice to the assessee. In response to the show case notice, the assessee claimed that the cash deposit of Rs. 27,39,424/- was solely out of the agricultural income. However, the assessee failed to produce documentary proof as the cash deposits were from agricultural income. The AO, therefore, made entire cash deposits as unexplained and made addition u/s. 69 of the Act, assessing total income of Rs.24,39,424/-. Aggrieved, the assessee preferred an appeal before the Ld. CIT(A).
On appeal, the Ld. CIT(A) dismissed the appeal of the assessee holding as under:
“5.2 As stated earlier in Para-4 of this order that appellant has chosen not to argue his case in the present proceedings. In the statement of fact the appellant has stated that he is basically an agriculturist. However, the very fact that the appellant had income of Rs. 23,39,910/- narrates a different story. Mere owning of land does not by itself mean that agricultural activities were being undertaken on the said parcel of land. The appellant further argues that he had undertaken the agricultural activities on cash basis, wherein the entire receipt was in cash and the expenditure incurred by it was also in cash. However, the pattern of the cash deposited in the bank account does not support the above argument of the appellant. An assessee who otherwise is engaged into other economic activities needs to prove with help of evidences the fact of agricultural activities. The appellant could not either at the time of regular assessment or during the present proceedings produce any document much less any convincing evidence that he had under taken agricultural activities on the said parcel of land from which income to the tune of Rs. 27,39,424/- could have been generated. In the given situation I do not find any error in the decision of the AO who relied upon the estimate provided by Village Administrative Officer and restricted the possible agriculture income to Rs. 3,00,000/- in the period FY 2015-16, 2016-17 and 2017-18. 5.3 I have carefully gone through grounds of appeal, filed by the appellant. These grounds are more like statement of facts. However, the grievance of the appellant only relates to refusal of the AO in accepting that the assessee had earned Rs.27,39,424/- from agricultural activities. This grievance has been adequately discussed an adjudicated in para-5.2 above. Therefore, individual grounds of appeal filed by the appellant is not being adjudicated. The appeal filed by the assessee fails.”
The Ld. Authorized Representative (A.R) of the assessee prayed for setting aside the order of the Assessing Officer for re-adjudication, since the case was not prosecuted before the Assessing Officer and the same has been confirmed by the Ld. CIT(A) without any discussion.
The Ld. Departmental Representative (DR), on the other hand, has relied on the orders of lower authorities.
We have heard the rival submissions, and perused the materials available on record. On perusal of the orders, we find that the AO and that of the Ld. CIT(A) have passed the orders without giving proper opportunity to the assessee. We are of the opinion that keeping in view the principles of natural justice, the assessee be provided with another opportunity of hearing to substantiate his case before the Ld. CIT(A). Accordingly, we set aside the order passed by the Ld. CIT(A) and remit the matter back to the file of the Ld. CIT(A) to adjudicate this appeal afresh in accordance with law, after giving reasonable opportunity to the assessee. We also direct the Assessee to appear before the Ld. CIT(A) on the date of hearing without fail. In view of the above, the appeal filed by the assessee is allowed for statistical purposes only.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 28th February, 2025.