BALASAHEB ARJUN MALAWADE,SOLAPUR vs. ITO WARD 2(3), SOLAPUR

The assessee has taken the following grounds of appeal:- AY 2018-19 "

The appellant craves leave to add/delete/modify amend all or nay of the grounds of appeal." AY 2020-21 "

That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in application of provisions of Section 69A of Income Tax Act, 1961 on agriculture income of Rs.68,37,057 declared in Return of Income.

The appellant craves leave to add/delete/modify amend all or any of the grounds of appeal."

Briefly stated the common facts are that the assessee is an individual and engaged in grape farming on his own agricultural land and the land in the name of his spouse.

1 For AY 2018-19, the assessee filed his return of income on 09.07.2018 declaring total income at Rs. Nil. During AY 2018-19, the assessee earned net agricultural income of Rs.1,14,63,399/- after deducting the expenses incurred, which was claimed as exempt under section 10(1) of the Income Tax Act, 1961 (the "Act"). The case of the assessee was selected for limited scrutiny. Accordingly, statutory notice(s) under section 143(2) / 142(1) of the Act were issued and served upon the assessee. The assessee failed to respond. The Ld. Assessing Officer, National E-assessment Center, Delhi (“AO”) therefore proceeded to complete the assessment at assessed income of Rs.1,14,63,399/- u/s 144 r.w.s.144B of the Act on 23.04.2021 by making addition of Rs.1,14,63,399/- on account of disallowance of exemption of net agricultural income as income from undisclosed sources u/s 69A of the Act to the Nil income returned by the assessee.

2 For AY 2020-21, assessee filed his return of income on 08.01.2020 declaring total income at Rs.1,70,450/-. During AY 2020-21, the assessee declared income from other sources amounting to Rs.1,80,449/- and net agricultural income of Rs.68,37,057/- after deducting the expenses incurred, which was claimed as exempt under section 10(1) of the Act. The return was processed under section 143(1). Subsequently, the return was selected for limited scrutiny to examine the issue “agricultural income”. Accordingly, statutory notice(s) under section 143(2)/142(1) of the Act were issued and served upon the assessee. The Ld. AO issued several notices of hearing to the assessee, however, these were not responded to, except one notice issued on 09.09.2022 to which a part response was filed by the assessee. In the absence of any documentary evidence filed by the assessee in support its claim of exemption of agricultural income, the Ld. AO completed the assessment at assessed income of Rs.1,72,63,093/- under section 143(3) of the Act on 16.09.2022 by making addition of (i) Rs.1,02,55,586/- on account of disallowance of the agricultural expenditure claimed by the assessee as unexplained expenditure under section 69C of the Act; and (ii) Rs.68,37,057/- on account of disallowance of exemption of net agricultural income as unexplained money under section 69A of the Act, to the income of Rs.1,70,450/- returned by the assessee.

Aggrieved, the assessee challenged the above order(s) of the Ld AO before the Ld. CIT(A). For AY 2018-19, the assessee filed the appeal with a delay of 273 days which was not condoned by the Ld. CIT(A) and the appeal was dismissed by him. There was no delay in filing the appeal for AY 2020-21. Without prejudice to the above, the Ld. CIT(A) decided both the appeals on merits of the case as well. The notice(s) issued by the Ld. CIT(A) remained uncomplied with by the assessee. In the absence of any supporting documents and submissions furnished by the assessee, the Ld CIT(A) confirmed the findings of the Ld. AO for both the AYs. involved observing that the AO has passed a very reasoned and speaking order considering all the facts and circumstances of the assessee's case.

Dissatisfied, the assessee is in appeal before the Tribunal for both the AYs 2018-19 and 2020-21 and all the grounds of appeal(s) relate thereto.

The Ld. AR submitted that the non-appearance/non-compliance before the lower authorities were not intentional. The Ld. CIT(A) has not decided the issues on merits of the case. He submitted that given an opportunity the assessee is in a position to submit the relevant documentary evidence to substantiate his case before the Ld. CIT(A). He,

The Ld. DR had no objection to the above request of the Ld. AR.

We have heard the Ld. Representatives of the parties and perused the material on records. The appellate order(s) of the Ld. CIT(A) for both the AYs involved i.e. AY 2018-19 and 2020-21 reveals that he has applied Vs. B.N. Bhattacharjee & Ors.10 CTR 354 (SC) and dismissed the appeal(s) of the assessee for want of prosecution. We further note that the Ld. CIT(A) has not condoned the delay in filing appeal for AY 2018-19. No doubt, the Ld. CIT(A) may decide the appeal ex-parte where the assessee does not prosecute his appeal inspite of several opportunities. None-the- lessess, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. We observe that the Ld. CIT(A) has passed the order in concurrence of the order of Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act.

On the facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play, to set aside the order of the Ld. CIT(A)/NFAC, Delhi and restore the matter back to his file with a direction to condone the delay in filing the appeal for AY 2018-19 and to adjudicate the impugned issues involved in both the appeals for AYs 2018-19 and 2020-21 afresh and pass speaking order(s) on merit in accordance with facts and law after allowing reasonable opportunity of being heard to the assessee who shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon without seeking adjournment under any pretext, failing which the Ld. CIT(A) shall be at liberty to pass appropriate order as per law. We order accordingly.

In the result, the appeal(s) of the assessee for both the AYs 2018-19 and 2020-21 are treated as allowed for statistical purposes. Order pronounced in the open court on 31st January, 2025. (R.K. Panda) VICE PRESIDENT (Astha Chandra) JUDICIAL MEMBER पुणे / Pune; दिनांक / Dated : 31st January, 2025. रवि आदेश की प्रतिलिपि अग्रेषित /