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Facts
The assessee filed an appeal against the order of CIT(A) which upheld the additions made by the AO on account of disallowance of agricultural income and unexplained cash deposits. The assessee was aggrieved by the additions made under Section 115BBE of the Income Tax Act.
Held
The Tribunal observed that the assessee failed to appear before the lower authorities and did not pursue the appeal. However, in the interest of justice, the Tribunal set aside the ex-parte order and remanded the case back to the CIT(A) for fresh adjudication on a denovo basis.
Key Issues
Whether the ex-parte assessment order and CIT(A) order are sustainable when the assessee failed to appear. Whether the disallowance of agricultural income and addition of unexplained cash deposits are justified.
Sections Cited
143(2), 142(1), 115BBE, 246A, 234B, 234C, 253
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, CHANDIGARH
Before: SHRI VIKRAM SINGH YADAV & SHRI PARESH M. JOSHI,
the order bearing No. ITBA/NFAC/S/250/2023- 24/1056126042(1) dated 15.09.2023 of the ld. CIT(A) which is hereinafter referred to as the “Impugned Order”. The ITA 694/CHD/2023 A.Y. 2017-18 2 relevant assessment year is 2017-18 and the corresponding previous year period is from 01.04.2016 to 31.03.2017.
2. Factual Matrix 2.1 That assessee had filed return of income for the assessment year 2017-18 on 06.11.2017 declaring an income of Rs.15,52,590/- and agriculture income of Rs.46,68,628/-.
2.2 That the case of the assessee was selected under complete scrutiny through CASS.
2.3 That notice under Section 143(2) of the Act was issued and served upon the assessee.
2.4 That a Questionnaire alongwith notice under Section 142(1) was also issued.
2.5 That the assessee filed required details, information/documents etc. which were verified.
2.6 The assessee is into the business of Trading in Green house/ Net house components and growing of cut flowers.
The assessee had derived its income from Trading and sale of cut flowers which is in the nature of Agricultural Income.
ITA 694/CHD/2023 A.Y. 2017-18 3 That the Learned Assessing officer had arbitrarily and without any basis made the addition of Rs.46,68,628/- in respect of disallowance of Agricultural Income. That the Learned Assessing officer has arbitrarily made addition of Rs. 20,15, 047/- on account of cash deposits. That the ld.
Assessing Officer has arbitrarily assessed the income under Section 115BBE of the Income Tax Act, 1961.
2.7 That by an assessment order bearing No. ITBA/AST/S/143(3)/2019-20/1021859573(1) dated 07.12.2019 the ld. AO has computed total income of the assessee at Rs.82,36,270/-. Income as per return was Rs.15,52,590/- and ld. AO has made addition of Rs.20,15,047/- on account of unexplained cash deposit and has disallowed agriculture income of Rs.46,68,628/-.
2.8 That the assessee being aggrieved by the aforesaid assessment order dated 07.12.2019 had preferred first appeal in terms of Section 246A of the Act before ld. CIT(A) who by the impugned order has dismissed the appeal.
ITA 694/CHD/2023 A.Y. 2017-18 4 2.9 That being aggrieved by the “Impugned Order” the assessee has preferred second appeal before this Tribunal on following grounds :-
The impugned order is against law and contrary to the facts on record.
That the orders below passed and various additions/ disallowances made are arbitrary and contrary to Law and Facts of the case.
That the authorities below have made assessment of agricultural income arbitrarily and disallowed the agricultural income of the assessee without any basis. The assessee had filed the detail of sale of flowers of Rs. 1,29,28,611.00 during the relevant assessment year and after deduction of expenses had earned agricultural Income of Rs.46,68,628.00. For the last 10 years the assessee is regularly showing his agricultural income from the same piece of land and the same has been accepted by the Department.
4. That the Authorities below had acted unreasonable in contravention of the provisions of the Income Tax Act 1961 while making the additions of Rs.20,15,047.00 for cash deposited during the demonetization period. The cash of Rs.20,15,047.00 has been deposited from the cash withdrawals from the bank account of the assessee and out of cash in hand as on 08.11.2016 as well as from his past savings. 5. That the Authorities below had acted unreasonable in contravention of the provisions of the Income Tax Act 1961 while assessing the total income of the assessee and taxing the same under Section 115 BBE of the Income Tax Act, 1961 as the cash has been deposited from the cash withdrawals from the bank account and out of cash in hand as on 08.11.2016 as well as from his past savings. 6. The Authorities below have erred in charging interest under Section 234B & 234C from the appellant as the same was not legally demandable. 3. Record of Hearing 3.1 That the hearing in the matter took place before us on 08.01.2025. Registry placed before us an application for adjournment moved by appellant. However, in support of ITA 694/CHD/2023 A.Y. 2017-18 5 the said application for adjournment, no Authorized Representative or assessee in person appeared for hearing.
The ld. DR was, however, present and invited our attention that the impugned order is ex-parte and that assessee has not appeared before ld. CIT(A) despite opportunities. She has left the issue to be decided by this Tribunal according to the law.
Observations, findings and conclusions 4.1 We have examined the record of the case. We notice that from 27.12.2020 to 06.09.2023 in all 8 opportunities were given to the assessee to explain and furnish necessary details including opportunity of hearing through VC but not a single opportunity is availed off by the assessee for reasons best known to him. The ld. CIT(A) therefore, was left with no other alternative but to pass the ex-parte impugned order. It is a case of non prosecution of appeal. Assessee has not taken any steps to pursue the appeal.
ITA 694/CHD/2023 A.Y. 2017-18 6 4.2 Keeping in view larger interest of justice, we are however, of the considered view that a direction should be issued to assessee to participate in the hearing and to give necessary details and such assistance to CIT(A) as desired.
4.3 Under these circumstances, we set aside the impugned order and remand the case back to the file of CIT(A) to pass a fresh order in the matter on denovo basis with direction to assessee to cooperate with the Department. The ld. CIT(A) is directed to give only one opportunity to the assessee and assessee is directed not to seek any adjournment on flimsy grounds.
ORDER 5.1 In the premises impugned order is set aside as and by way of remand on denovo basis back to CIT(A).
5.2 In result appeal of assessee is allowed for statistical purposes.
Order pronounced on 22.01.2025.