ROSHAN LAL,ALWAR vs. INCOME TAX OFFICER, BHIWADI

Thanking you for your understanding and consideration.

Yours sincerely, Roshan Lal

Verification I, Roshan Lal, the above named deponent, do hereby verify that the contents of this affidavit are true and correct to the best of my knowledge and belief. No part of it is false, and nothing material has been concealed.

Verified at on this Deponent (Roshan Lal)

3. Ld. DR fairly left the delay matter at the wisdom of the court and prayed that the issue may be decided based on the affidavit and prayer filed by the assessee.

5. In this appeal, the assessee has raised following grounds: - “1. The ld. Assessing Officer has erred in treating the sale proceeds from the sale of rural agricultural land as income u/s 69A.

2. The Ld. Assessing Officer has failed to provide natural justice by treating an exempt income as income u/s 69A.

3. Appellant reserves the right to add/delete/modify the grounds of appeal.

6. Succinctly, the fact as culled out from the records is that as per information available with the Department, during the relevant previous year, the assessee deposited Rs. 94,50,000/- [Cash Deposits Rs.74,50,000/- and other than Cash Deposits Rs.20,00,000/-) in Bank Account. Assessee did not file any return of income for the relevant year.

Therefore, after recording reasons in writing that assessee's income to the extent of Rs. 94,50,000/-, which is chargeable to tax, has escaped assessment and therefore, notice u/s 148 dated 21/2/2020 of the Income Tax Act, 1961 was issued after obtaining approval u/s 151(1) from the competent authority. However, the notice remained un-complied with.

Therefore, a notice u/s 142(1) dated 8/9/2021 was issued, requiring the assessee to furnish ITR in compliance to notice u/s 148 & certain other details/documents This notice too remained un-complied with. Since, the notices, issued to the assessee, remained un-complied with, therefore, a final opportunity was given to the assessee by issuing a notice u/s 142(1) dated 14/9/2021, requiring the assessee to show-cause as to why the case should not be completed ex-parte u/s 144. But, this notice too remained un- assessee but the assessee did not come forward to submit his submission in respect of various notices issued to the assessee, in these circumstances ld. AO left with no other option but to complete the assessment proceedings ex-parte u/s 144 of the Act. While doing so ld. AO made an addition of Rs. 94,50,000/- as the assessee failed to furnish the documentary evidences in respect of sources of cash deposits as unexplained money u/s 69A r.w.s. 1158BE, into total income of the assessee.

7. Aggrieved from that order of assessment the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below:

3. Observations, Finding and Decision:

3.1 I have perused the assessment order and other relevant records. The assessment order was passed under section 147 of the Income-tax Act, 1961, against which the appellant preferred an appeal before the undersigned.

3.2 During the appellate proceedings, the appellant was granted many opportunities for presenting his case and filing detailed submission in support of various grounds of appeal taken by him. However, on none of the occasions, the appellant chose to file a submission or filed any documents, evidences or even requested for adjournment. It may be noted that in the faceless appeal environment, all the notices are issued to the appellant at the email address provided by him, and also, all the submission are supposed to be filed online through the appeal module available to the appellant online in his e-filing portal. In this electronic communication environment, the emails/notices/letters are routed through the NFAC, and the appellant is expected to respond through the same environment.

3.3 Having noted thus, it is a fact that the appellant chose not to submit anything in response to various notices issued to him thereby giving him ample opportunity of hearing, which is also in accordance to principle of natural justice. The table below list the various dates of issuing of notices, dates of hearing/submission granted to the appellant and the response of the appellant:

Sl. No. Date of fixing/notice Date of hearing Reasons offered by appellant 1 29/03/24 15/04/24 No Compliance No Compliance 2 18/06/24 26/06/24 No Compliance 3 05/07/24 17/07/24 4 01/10/24 16/10/24 No Compliance 3.4 It is very clear form the above table that the appellant has chosen not to submit anything in support of his various grounds of appeal. In such a scenario, I am of the considered opinion that the appellant does not have anything to say or have anything to offer to the appellate authority in support of his various grounds of appeal. It further means that the assessee is not interested in prosecuting this appeal. Hence the appeal filed by the assessee is liable to be dismissed for non- prosecution. For this view I find support from the following decisions: - (a) The Hon'ble SC in the case of CIT vs B.N. Bhattacharjee and Another, reported in 118 ITR 461 [relevant pages 477 & 478] their Lordships have held that:

The appeal does not mean merely filing of the appeal but effectively pursuing it.

(b) In the case of Estate of Late Tukojirao Holkar vs CWT, 223 ITR 480 (MP) the Hon'ble High court while dismissing the reference made at the instance of the assessee in default made following observation in their order.

Roshal Lal vs. ITO "If the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference."

(c) In the case of Commissioner of Income-tax vs Multiplan India (P) Ltd.. 38 ITD 320(Del), the appeal filed by the revenue before the Tribunal, which was fixed for hearing, but on the date of hearing nobody represented the revenue/appellant nor any communication for adjournment was received. There was no communication or information as to why the revenue chose to remain absent on that date. The Tribunal on the basis of inherent powers, treated the appeal filed by the revenue as un admitted in view of the provisions of Rule 19 of the Appellate Tribunal Rules, 1963.

(d) Further, the law assists those who are vigilant and not those who sleep over their rights; i.e. “vigilantibus non dormientibus, jura subveniunt”. 3.5 I, therefore, dismiss all the grounds of appeal filed by the assessee.

4. In the result, the appeal is dismissed.”

8. Aggrieved with that order of the ld. CIT(A), the assessee is in appeal before this tribunal. To support the various grounds so raised by the assessee, ld. AR of the assessee, has filed the written submissions in respect of the various grounds raised by the assessee and the same is reproduced herein below:

“With reference to aforesaid appeal before our humble submission is as follows,

1. The appellant is a 74 year old senior citizen engaged in farming , who has spent his entire life in agricultural activities. He has never been involved in any other trade, business or profession. His primary source of livelihood has been agriculture.

2. Owing to his rural background and limited literacy, the Appellant had never been required to file an Income Tax Return (ITR), as agricultural income Roshal Lal vs. ITO is explicitly exempt from taxation under Section 10(1) of the Income Tax Act, 1961. Having no taxable income, the Appellant had never engaged with income tax authorities until the present case arose

3. During the Financial Year 2013-14, the Appellant sold his agricultural land, which had been under his ownership and cultivation for several decades. The sale was undertaken to meet personal and family needs, including medical expenses and household necessities. The transaction involved a consideration of ₹95,00,000/- (Ninety-Five Lakhs Rupees), received in cash and bank, as is customary in rural agricultural land transactions due to the limited availability of digital banking infrastructure and the general lack of familiarity with banking procedures in such areas.

4. The registered sale deed dated 02.09.2013 reflects a transaction value of ₹ 30,00,000/- (₹10,00,000/- in cash and ₹20,00,000/- in Bank), whereas the actual sale consideration received was ₹95,00,000/-(₹75,00,000/- in cash and ₹20,00,000/- in cheque) . The differential amount was mutually agreed upon between the parties and was received in good faith, reflecting the customary practice in rural agricultural transactions, where documented sale values often do not capture the full consideration exchanged.

5. Upon receiving the sale proceeds, the Appellant, acting in good faith, deposited the entire amount in his bank account, as evidenced by bank statements establishing a clear and direct correlation between the sale transaction and the deposit. The deposit was made purely for safekeeping, as the Appellant had no prior experience handling large sums of cash. There was no element of concealment, manipulation, or tax evasion in this transaction.

6. The deposits were made as follows: • ₹9,00,000/- on 22.08.2013 (received as advance/Bayana). • ₹61,00,000/- on 02.09.2013 (on the date of the sale agreement). • ₹20,00,000/- on 09.09.2013 (via cheque upon handover of possession). • The balance amount was kept in hand and later utilized on 01.10.2013.

7. The deposit of the majority of the sale proceeds on the very same date as the sale agreement clearly establishes that the payments were received by the Appellant for the sale of land.

Roshal Lal vs. ITO 8. The Appellant’s case was selected for scrutiny under Section 143(3) of the Income Tax Act, 1961. However, due to his complete lack of familiarity with tax laws and procedures, he remained entirely unaware of the ongoing assessment proceedings. The Appellant, being a senior citizen with no prior experience in financial or taxation matters, had never used email and did not possess any knowledge of electronic communication methods.

9. Furthermore, he never received any physical notices by post at his residence, leaving him completely uninformed about the assessment initiated against him.

10. The Appellant first became aware of the Income Tax proceedings only when he received a demand notice under Section 156 of the Income Tax Act, 1961, via post.

The notice raised a demand of ₹52,59,180/- due to an addition of 11. ₹94,50,000/- to the Appellant’s income. The Appellant, being unaware of income tax procedures, was completely taken aback by the demand and did not understand the basis of the addition made against him.

12. Upon receiving the demand notice, a relative assisted the Appellant in filing an appeal before the Commissioner of Income Tax (Appeals). However, the professional handling the case failed to respond to notices issued by CIT(A), leading to an ex-parte dismissal without proper consideration of the Appellant’s contentions.

14. Hence, aggrieved by the adverse order of the Ld. Assessing Officer and Ld. CIT(A), the Appellant is seeking natural justice through this appeal. It may be kindly noted that neither the Assessing Officer nor the CIT(A) were presented with the facts and supporting evidence of the case. Hence, the order passed deprived the Appellant of his rights and natural justice. Therefore, this appeal is humbly preferred before the Hon’ble Bench of ITAT.

Facts of the Case: 1. The Appellant is an individual , a senior citizen and lifelong agriculturist who has been engaged exclusively in agricultural activities throughout his life.

Roshal Lal vs. ITO His sole source of income has always been agriculture, which is expressly exempt from taxation under Section 10(1) of the Income Tax Act, 1961. Consequently, he had never been required to file an Income Tax Return (ITR) in the past.

2. For the Financial Year 2013-14, the Appellant sold rural agricultural land and received a total consideration of ₹95,00,000/-. As the land in question does not qualify as a capital asset under Section 2(14) of the Act, the appellant, being a layperson with limited financial literacy and no prior knowledge of tax laws, genuinely believed that the transaction was entirely tax-exempt. Accordingly, he did not file an ITR for the said year, under the bona fide belief that no tax liability arose from the transaction.

3. The Assessee’s non-filing of the Income Tax Return (ITR) for the Assessment Year 2013-14 was purely unintentional and arose solely from his genuine belief that the sale of rural agricultural land was not taxable. Being a senior citizen engaged exclusively in agricultural activities, the appellant had no prior exposure to taxation laws and was unaware of any requirement to report the transaction. He had never filed an ITR or had any knowledge about the ITR.

4. There was no element of concealment or tax evasion, as the entire sale consideration was received and transparently deposited in the appellant bank account. Given his age, rural background, and limited financial literacy, the appellant acted under the bona fide impression that no tax liability arose from the sale of agricultural land, as such transactions are explicitly exempt under the Income Tax Act, 1961.

The Appellant received an advance payment of ₹9,00,000/- on 5. 22.08.2013, which was deposited in his bank account. Subsequently, on 02.09.2013, the Appellant executed the sale deed received ₹61,00,000/- and deposited an additional ₹61,00,000/- on the same day in his bank account. Further, on 09.09.2013, an amount of ₹20,00,000/- was deposited via cheque upon handover of possession. The remaining proceeds were kept in hand and later utilized on 01.10.2013.

6. The Appellant, being a senior citizen with no prior experience in taxation matters, was unaware of any requirement to report the sale of rural agricultural land.

7. Due to his lack of exposure to formal banking and taxation processes, the Appellant did not maintain separate financial records, as he had never been Roshal Lal vs. ITO required to do so in the past. His actions were purely based on the understanding that the sale proceeds from rural agricultural land were not subject to any tax obligations.

8. The above-mentioned transactions conclusively establish that the funds received and deposited were solely and exclusively derived from the sale of agricultural land, which had been owned and cultivated by the Appellant for several decades. The transaction was conducted in a bona fide and transparent manner, with the proceeds being deposited in the bank, further confirming their legitimacy.

12. In the absence of any response, the Learned Assessing Officer arbitrarily treated the entire credit amount in the Appellant’s bank account as unexplained money under Section 69A read with Section 115BBE. The total sum was erroneously added to the Appellant’s taxable income, despite the fact that the deposited amounts were directly linked to the sale of rural agricultural land, a transaction explicitly exempt from taxation under the Act.

13. As a consequence of the ex-parte assessment, an unwarranted tax demand of ₹52,59,180/- was raised against the Appellant. Furthermore, penalty Roshal Lal vs. ITO proceedings under Sections 271(1)(b), 271(1)(c), and 271F were initiated, along with the levy of interest under Sections 234A and 234B. The additions and penalties were imposed without conducting a proper inquiry into the nature of the deposits and without considering the statutory exemption available to the Appellant.

Submission Details: Being aggrieved by the said order of the AO, please find below the ground-wise written submissions for your kind perusal:

Ground No. 1- The Ld. Assessing Officer has erred in treating the sale proceeds from the sale of rural agricultural land of Rs. 94,50,000/- as income u/s 69A r.w.s. section 115BBE.

1.1. As stated in the facts mentioned above, the appellant is a senior citizen and a dedicated farmer who has been engaged in agriculture for several decades. With limited literacy, he has no formal understanding of taxation and banking systems.

1.2. The appellant, having solely derived his income from agricultural activities, which are exempt from income tax, was never required to file an Income Tax Return. Consequently, he neither filed an ITR nor possessed any knowledge of the taxation system and its compliance requirements. 1.3.The appellant resides in a remote village where there is minimal awareness of taxation policies and the statutory obligation to report financial transactions to the authorities. Given this lack of awareness, he had no understanding of the legal and tax implications associated with property transactions.

Roshal Lal vs. ITO 1.4. In accordance with prevailing local practices in land transactions, the appellant agreed to sell his agricultural land situated in his village for a total consideration of ₹95,00,000, wherein ₹75,00,000 was to be received in cash and ₹20,00,000 through bank transfer. Completely unaware of the legal and tax consequences of such a transaction, he proceeded with the sale under these customary terms.

1.5. The cash received by the appellant from the sale of his rural agricultural land was duly deposited into his bank account. The transaction was carried out in accordance with local practices, and the appellant, being unaware of the taxation system, had no reason to suspect any compliance issues.

1.6.The date of the sale deed and the date of the cash deposit in the bank clearly establish that the source of the deposited amount was the legitimate sale proceeds of the land. Notably, a substantial portion of ₹61,00,000 was deposited on the very same day as the execution of the sale agreement, further reinforcing the authenticity and bona fide nature of the transaction.

1.7. The amount credited to the appellant’s bank account is fully explainable, as it directly originates from the legitimate sale proceeds of his rural agricultural land. Treating this amount as unexplained money under Section 69A read with Section 115BBE is wholly unjustified.

1.8.Since the transaction pertains to the sale of rural agricultural land, which is explicitly exempt from income tax, any addition made on this account is legally unsustainable and ought to be deleted in its entirety.

1.9.Hence the cash deposited by no stretch of imagination can be referred to as the income of the Assessee and hence the said addition in view of the discussions held supra needs to be set aside and the order of the AO needs to be repudiated.

2. Ground No. 2- The Ld. Assessing Officer has failed to provide natural justice by treating an exempt income as income U/s 69A r.w.s Section 115BBE.

3. Ground No. 3- The Assessing Officer has erred in adding the amount of Rs. 94,50,000 /- under section 69 without any justified reason of adding it as income u/s 69.

4. Ground No. 4- The order passed is bad in law and fails to provide natural justice to the Appellant.

4.1.The discussions held supra and in ground no 1 will hold good and in continuation to the same, the appellant has explained the deposit of cash and cheque amount by vehemently arguing that the same has been generated out of sale of rural agricultural land during the financial year 2013-14 and the appellant has stated that the same are the sale proceeds of the rural agricultural land and is also now submitting the sale agreement and bank statements for substantiating his claims.

4.2.The assessee would also like to place on record the copies of the sale deed and bank statement clearly stating the direct correlation with amount and date of deposits establishing the source of deposits in account is from the sale proceeds of rural agricultural land.

4.3.Hence, undoubtedly, the appellant has sold of his rural agricultural land and deposited the amount received from the sale proceeds into his bank account and there was no unexplained cash/money and hence no amount can be treated as unexplained cash/money in the hands of the assessee after considering the sale deed details and the bank statement as placed before your goodself by the appellant.

4.4.Furthermore, the appellant had no malafide intention of concealing or underreporting the transaction, as he is a complete layman with no knowledge of banking or taxation laws. Owing to his limited literacy and lack of awareness regarding reporting requirements, he was unaware of any compliance obligations. In fact, his bona fide intent is evident from the fact that he voluntarily deposited the entire sale consideration of the land into his bank account, without any attempt to hide or misrepresent the transaction.

4.5.Therefore, there exists no justifiable basis for treating the amount as income under Section 69A, as there is conclusive evidence establishing that the credited amount represents the legitimate sale proceeds of rural agricultural land. Since such transactions are explicitly exempt from taxation, the addition made to the appellant’s income is wholly unwarranted and ought to be deleted.

4.6.The cash sales and cheque deposits in the appellant’s bank account are fully explainable and duly supported by the documents submitted. Given the availability of verifiable evidence, the transactions cannot be classified as unexplained money under Section 69A, and any addition made on this ground is entirely unjustified.

4.7.Therefore, there isn’t any merit in doubting the genuineness of the deposits.

4.8.The appellant prays before the Hon. Bench to kindly direct the Ld. assessing officer to delete the addition of Rs. 94,50,000 /-.

4.9.It is important here to note that, the cash generated from the sales proceeds of agricultural land have been deposited in the bank and hence the same cannot be treated as deposits made out of any undisclosed income. Addition under section 69A on account of unexplained money, thus, cannot be just simply made and the AO has done this by taking a very casual approach on mere conjectures.

4.10.Further, the appellant has produced contemporaneous documentation i.e. sale deed of land executed on 02.09.13 and the amount of Rs. 61,00,000/- deposited on the very same day establishes the source was from the sale proceeds of the land only.

4.11.The appellant had also demonstrated that there was a direct correlation of sale of agricultural land and deposits/credits in his bank account as the timeline of both the events are aligned.

4.12. The appellant had no malafide intention to hide any transactions but being a laymen unaware of the procedure of Assessment and Appeal, he had no idea about the pendency of notices which remained unresponsive during the course of assessment and appeal to the Hon. CIT(A).

5. Ground No. 5- The Assessing Officer proceedings has erred in law and facts of the case in initiating the penalty proceedings under section 271(1)(b), 271(1)(c) and 271F.

6. Ground No. 6- The Appellant herein craves its right to alter, amend, modify, add or withdraw any ground of appeal and or take any additional grounds of appeal. The appellant would like to bring to honorable bench’s kind notice the additional evidence/documents which is as follows:

1.1. The copies of the sale deed of land for demonstrating that the appellant has executed sales and the amount was received against the said sales and hence, is not in the nature of the unexplained money u/s 69A as is framed in the impugned assessment order. 1.2. A bank statement showing correlation of sale date and deposits dates.

2. The learned Assessing Officer is not justified in charging interest under the provisions of section 234A and section 234B of the Act under the facts and circumstances of the case.

2.1. Without prejudice the rate, period and quantum are not discernible from the order of assessment as the same are absolutely unwarranted under the facts and circumstances of the case.

2.2. From a plain reading of the assessment order one can clearly make out that the assessment was done only to burden the assessee by invoking the deeming provisions under section 69A and the consequential provisions of Section 115BBE because this was the only recourse left before the Assessing Officer, and since now when the assessee has given explanations and has provided documentary evidences of all the details which will demonstrated the source of the cash deposit/bank credits , there is no question of unexplained moeny and therefore no addition can be done.

2.3. Now, having referred to the brief facts, supra, let us move on to the provisions of section 271(1)(b) , Section 271(1)(c) and Section 271F of the Act:

2.4. Section 271(1)(b) of Income Tax Act imposes a penalty on assessees for non compliance of notices issues during assessment proceedings. 2.4.1. Section 271(1)(b) of the Income Tax Act is reproduced below for reference: Section 271(1)(b) of the Income Tax Act, 1961 states: "271. (1) If the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act is satisfied that any person— (b) without reasonable cause, fails to comply with a notice under section 142(1) or section 143(2) or fails to comply with a direction issued under section 142(2A), he may direct that such person shall pay by way of penalty, a sum of ten thousand rupees for each such failure."

Roshal Lal vs. ITO This section provides for a penalty of ₹10,000 per default if a taxpayer fails to comply with notices issued under Sections 142(1), 143(2), or 142(2A) without reasonable cause. (2) The notices referred to above were never received by the appellant, and he had no knowledge of the ongoing proceedings, which is why the notices remained uncomplied with. The appellant, being a complete layman with very limited literacy and residing in a remote village, was entirely unaware of the notices and the requirement to comply with them. There was no malafide intention to ignore or evade compliance. In the absence of any deliberate non- compliance, there is no justification for initiating a penalty under Section 271(1)(b) of the Income Tax Act. 2.5. Here are the exact provisions of Section 271(1)(c) and Section 271F of the Income Tax Act, 1961: 2.5.1 Section 271(1)(c) – Penalty for Concealment of Income or Furnishing Inaccurate Particulars "271. (1) If the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act is satisfied that any person— (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, in addition to tax, if any, payable by him, a sum equal to the amount of tax sought to be evaded by reason of the concealment of income or furnishing of inaccurate particulars of such income."

Section 271F – Penalty for Failure to Furnish Return of Income (Repealed w.e.f. AY 2018-19 by Finance Act, 2017) "271F. If a person who is required to furnish a return of income under section 139(1) or by the proviso to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay by way of penalty a sum of five thousand rupees." 2.5.2. No Concealment or Inaccurate Particulars – Section 271(1)(c) The penalty under Section 271(1)(c) applies only when there is a deliberate act of concealment of income or furnishing of inaccurate particulars of income with an intent to evade tax. In the present case:

Roshal Lal vs. ITO • The appellant has not concealed any income, as the entire amount deposited in the bank account is fully explainable and supported by documentary evidence, being the legitimate sale proceeds of rural agricultural land, which is exempt from taxation. • There is no inaccurate reporting, as the appellant was completely unaware of the requirement to file a return due to his limited literacy and lack of knowledge of the taxation system. • The transaction was carried out transparently, with the entire amount deposited in the bank, leaving no element of intent to misrepresent or suppress facts. 2.5.3 Failure to Furnish Return Was Due to Genuine and Bonafide Reasons – The penalty under Section 271F is levied for failure to furnish a return of income within the prescribed time. However, in the appellant’s case: • The appellant was never required to file an ITR in the past, as his only source of income was from agriculture, which is exempt from income tax. • Due to his limited literacy and lack of awareness of tax laws, the appellant was genuinely unaware of the requirement to file a return in respect of the transaction. • The failure to file the return was not intentional or willful, but rather due to a lack of knowledge and guidance. • In light of the above, the imposition of penalties under Sections 271(1)(c) and 271F is completely unwarranted, as the appellant had no intent to conceal income, misreport particulars, or willfully evade tax. The transaction is fully explainable, and any procedural lapse occurred solely due to his limited understanding of taxation laws 3. Undoubtedly, the assessment order is unreasonably high pitched as the assessed income under the impugned order is just added on mere conjuctures. The appellant is confident that the appellant has explained the source before your goodself so that the impugned order could be nullified, set-aside.

3.1. The appellant is also striving hard with bad health being a 74 year old individual who has dedicated his whole life to agricultural.

3.2. What is relevant here to note is that income is disclosed or undisclosed and explained or unexplained, then said income shall be dealt in the manner provided under the Act.

3.3. If income is disclosed and explained then same normally would be taxable in ordinary manner. In the actual case of the appellant the amount deposited in the bank are from the sale proceeds of an agricultural land which situated in rural area. Sale proceeds of such rural agricultural land are totally exempt from the income tax. 3.4. Considering all the above submissions and the facts highlighted and the ambiguity in the data that the department has in its possession, has tried to be applied against the appellant lacks clarity and in such a circumstance no order of addition under section 69A r.w.s Section 115BBE and penalties under section 271(1)(b),271(1)(c) and 271F is warranted and is completely illegal and anti-vires the provisions of the law for which it was created. Addition in income u/s section 69A and Penal provisions needs due attention and needs to be exercised with great caution. Hence no such action is tenable in the eyes of law in view of all the above discussions.

Judicial Pronouncements:

In this case, the assessee, Rama Narayanan, sold agricultural land and received a portion of the sale consideration in cash ("on-money") over and above the amount stated in the registered sale deed. The Assessing Officer treated this additional amount as undisclosed income and sought to tax it accordingly. 3.2. Judgment & Tribunal’s Observations:

Roshal Lal vs. ITO The ITAT Chennai held that any surplus money arising to an assessee on the sale of agricultural land would partake the character of agricultural income, provided the land qualifies as agricultural land. The Tribunal emphasized that both the consideration stated in the registered sale deed and any additional "on- money" received should be treated as agricultural income, which is exempt from tax. This ruling underscores that receiving a higher actual consideration than the registered value does not negate the exemption available for income from the sale of agricultural land.

4. ITO vs. Abraham Varghese Cheruvil (ITAT Cochin, 2017) 4.1. Fact of the case Abraham Varghese Cheruvil sold agricultural land and received additional unaccounted money ("on-money") over the amount mentioned in the sale deed. The Assessing Officer considered this additional amount as unaccounted income and sought to tax it under the Income Tax Act.

4.2. Judgement and Tribunals Observation The ITAT Cochin ruled that the unaccounted money received on account of the sale of agricultural land is not taxable, reaffirming that income derived from the transfer of agricultural land is exempt from tax. The Tribunal highlighted that the nature of the land as agricultural is the determining factor for tax exemption, regardless of the amount received or the manner in which the transaction was conducted.

8.2. Judgement and Tribunals findings The Income Tax Appellate Tribunal (ITAT) Jaipur held that the cash received from the sale of rural agricultural land, which is not considered a capital assetunder Section 2(14), is exempt from capital gains tax. The Tribunal emphasized that since the income was exempt, there was no obligation for the assessee to file an ITR. Consequently, the addition made by the AO under Section 69A was deleted. This ruling underscores that the non-filing of an ITR, when the only income is from the tax-exempt sale of rural agricultural land, does not warrant the treatment of such income as unexplained.

Prayer:

(1) In the facts and circumstance of the case, explained above, legal pronouncements quoted and it is most respectfully prayed that, the Hon’ble Members may please grant relief against the order of Ld. Assessing Officer and issue needful direction for the deletion of the addition made to income.

(2) to pass such other order (s) as it deems fit and proper .”

9. To support the contention so raised in the written submission reliance was placed on the following evidence / records:

SR. NO. CONTENTS PAGE NOS. 1 Submission 01-27 2 Order of CIT(A) 28-31 3 Form 36 with Ground of Appeal

32-33 4. Order of ITO 34-38 5. Form 35 with Ground of Appeal 39-44

10. The ld. AR of the assessee in addition to the above written submissions submitted that before ld. CIT(A) four notices were issued to the consultant of the assessee. But the consultant has not informed to the assessee and assessee being a 74 year old senior citizen engaged in farming, who has spent his entire life in agricultural activities. He has never been involved in any other trade, business or profession. His primary source of livelihood has been received from agricultural activities. For the F.Y 2013-14, the assessee sold rural agricultural land and received a total consideration of Rs. 95,00,000/-. As the land in question does not qualify as a capital asset under Section 2(14) of the Act, the appellant, being a layperson with limited financial literacy and no prior knowledge of tax laws, genuinely believed that the transaction was entirely tax-exempt.

Accordingly, he did not file an ITR for the said year, under the bona fide belief that no tax liability arose from the transaction. Therefore, in the interest of justice, the assessee prayed that even the ld. AO passed the assessment order u/s 144 read with section 148 was ex-party one more merits of the case.

11. Per contra, the ld. DR objected to the prayer of the ld. AR and submitted that both the order of lower authorities is ex-party. Therefore, the prayer at this stage, by set aside again to the lower authority is not correct approach of the assessee. Thus, the assessee’s appeal is not maintainable.

After perusal of the requisite records before the AO. Based on these set of facts we are inclined to accept the request of the ld. AR of the assessee to set aside the case to the file of the ld. AO to decide the case of the assessee on merits after giving proper opportunity of being heard to the present all the facts before the ld. AO and should not ask for adjournment on trifles grounds. At this stage, we remand back the matter without commenting upon the merits of the case and ld. AO is directed to pass an order in accordance with law.

In terms of these observations, appeal of the assessee is allowed for statistical purposes.

Order pronounced in the open court on 05/05/2025.

Sd/- Sd/- ¼ Mk0 ,l- lhrky{eh ½ ¼ jkBksM deys'k t;UrHkkbZ ½ (Dr. S. Seethalakshmi) (Rathod Kamlesh Jayantbhai) U;kf;d lnL;@Judicial Member ys[kk lnL;@Accountant Member Tk;iqj@Jaipur fnukad@Dated:-05/05/2025 *Ganesh Kumar, Sr. PS आदेश की प्रतिलिपि अग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू 1. The Appellant- Roshan Lal, Alwar izR;FkhZ@ The Respondent- ITO, Ward- Bhiwadi 2. vk;dj vk;qDr@ The ld CIT 3. 4. vk;dj vk;qDr¼vihy½@The ld CIT(A) 5. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत xkMZ QkbZy@ Guard File (ITA No. 50/JP/2025) 6. vkns'kkuqlkj@ By order,

सहायक पंजीकार@Aेेज. त्महपेजतंत