ICHETTIRA MANDAPPA MACHAIAH,KODAGU vs. INCOME TAX OFFICER, WARD-1 , MADIKERI

The brief facts of the case are that assessee is a Senior Citizen and predominantly an agriculturist having 28.64 acres of land. The assessee claimed to have growing coffee and do peasant activity for livelihood. The assessee lives in a very remote part of Ichettira Mandappa Machaiah, Kodagu Page 3 of 6 the village where any mode of communication and transportation is cumbersome and due to this the postal department has allotted post box number for the villagers in their office.

The assessee claims that one of his staff had collected the notices on his behalf from the post box and he had misplaced during the flood hit period as all were in havoc & trauma. This led the AO to pass an ex-parte order u/s 144 of the Income Tax Act, 1961 (in short “The Act”) to his best of the judgment. The ld. A.R. of the assessee claimed that the amount of Rs. 12,00,000/- cash deposited in Corporation Bank, Kushalnagar was his hard earned money over the period of time from agriculture and peasant activity which is not taxable u/s 10(1) of the Act and accordingly no return of income was required to be filed before the AO. 3.1 During the course of the assessment proceedings, the assessee again failed to furnish return of income u/s 142(1) of the Act in response to notice u/s 142 of the Act dated 9.3.2018. The AO has further observed that assessee has deposited cash of Rs.12 lakhs in the Corporation bank account during the demonetization period. Accordingly, bank statement for the period from 1.4.2016 to 31.3.2017 pertaining to the assessee was collected from the bank. As the assessee fails to comply with the terms of notice issued u/s 142(1) of the Act as well as 2 nos of show cause notices, the assessment proceedings were completed under the best judgement assessment. The AO observed that the assessee even failed to furnish any details relating to business activity undertaken, details of income earned, details of cash deposit made into the bank accounts, source of cash deposits and details of cash deposit made in the bank accounts during the demonetization period and accordingly held that as the assessee has not offered any explanation for the source of cash deposit made, and therefore, the entire cash deposit amounting to Rs.12 lakhs was treated as Ichettira Mandappa Machaiah, Kodagu Page 4 of 6 unexplained money of the assessee and added to the total income of the assessee u/s 69A of the Act and taxed u/s 115BB of the Act. 3.2 Aggrieved by the assessment completed u/s 144 of the Act dated 18.11.2019, the assessee preferred an appeal before CIT(A)/NFAC. The ld. CIT(A) dismissed the appeal of the assessee by not accepting the fresh evidences uploaded under Rule 46A in the form of agricultural land holdings Further, ld. CIT(A) has observed that the assessee has failed to substantiate the claim of filing fresh evidence before him with valid reasons and also failed to explain as to why the same were not filed before the AO and accordingly dismissed the appeal of the assessee by citing various decisions relied upon by him. Aggrieved by the order of ld. CIT(A), the assessee filed the present appeal before the Tribunal. 3.3 Before us, ld. A.R. of the assessee submitted that the assessee could neither appeared before the AO nor submit any documents/records as the assessee is a senior citizen and living in a very remote area where any mode of communication and transportation is cumbersome. Further, ld. A.R. of the assessee submitted that even ld. CIT(A) has not considered the details produced before him stating that the same cannot be accepted as the assessee has failed to substantiate the claim of filing fresh evidence and also has failed to explain as to why the same were not filed before the AO.