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Facts
The assessee filed a return of income declaring total income and agricultural income. The Assessing Officer (AO) noted cash deposits made by the assessee during the demonetization period. The AO asked for details regarding agricultural landholdings, income, expenses, and sources of cash deposits. The assessee claimed the cash pertained to agricultural income earned over two years and was for a family medical emergency.
Held
The CIT(Appeals) dismissed the assessee's appeal, noting the assessee repeatedly sought adjournments without furnishing necessary documents. The Tribunal, considering the submissions, decided to grant the assessee one more opportunity to substantiate their case and remitted the appeal to the CIT(Appeals) for fresh consideration.
Key Issues
Whether the assessee was given adequate opportunity to present their case before the CIT(Appeals) and whether the CIT(Appeals) erred in dismissing the appeal without considering the merits of the case.
Sections Cited
143(1), 142(1)
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Income Tax Appellate Tribunal, “B” BENCH : BANGALORE
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI LAXMI PRASAD SAHU
Per Laxmi Prasad Sahu, Accountant Member
This appeal is filed by the assessee against the DIN & Order No.ITBA/NFAC/S/250/2023-24/1058341313(1) dated 30.11.2023 of the CIT(Appeals), National Faceless Appeal Centre, Delhi [NFAC], for the AY 2017-18.
The brief facts of the case are that the assessee filed return of income declaring total income of Rs.1,42,040 and agricultural income of Rs.19,46,880. The return was processed u/s. 143(1) on 11.03.2018 resulting in ND. The case was selected for limited scrutiny of “Cash deposit during demonetization period”. Statutory notices were duly served on the assessee and the assessee furnished details. The AO noted that the assessee had made SBNs deposits of Rs.8,00,000 in Karnataka Bank, Puttur and Rs.12,57,000 in Corporation Bank, Uppinangady. The assessee was asked to produce details of agricultural landholdings, agricultural income, expenses, and sources of cash deposits during demonetization period by notice u/s. 142(1) dated 29.08.2019. The assessee furnished reply. The AO noted that the total extent of land is 19.02 acres and the net agricultural income is Rs.19,46,880. The AO called for further details by notice u/s. 142(1) dated 16.10.2019. The assessee submitted that cash deposited during demonetization period pertains to agricultural income earned over two years i.e., FY 2015-16 & 2016-17 and cash amounting to Rs.38,78,000 was deposited into his account and his wife’s account. The assessee’s mother was subjected to liver surgery expecting a total expenditure of Rs.40 lakhs. The assessee and his family is having income ancillary to agricultural activities of Rs.3,15,920. The cash deposited during demonetization was for the purpose of above surgery. The assessee also submitted revised agricultural income of Rs.55,24,500 including his wife’ agriculture income too. The assessee also submitted details of cash deposited in Karnataka Bank account since AY 2009-10 to 2019-20.
The AO rejected submissions of the assessee. He noted that out of Rs.19,46,880, Rs.3,15,920 pertains to business income. If the accumulated money was prior to 09.11.2016 it would have been deposited in bank account. The AO made addition of Rs.3,15,920 as business income and Rs.9,17,262 as income from undisclosed sources.
The assessee filed appeal before the CIT(Appeals). The CIT(A) issued various notices and noted that assessee seeks time again and again and has not furnished documents in support of his grounds. He therefore upheld the order of the AO and dismissed the appeal of the assessee. Aggrieved by this order, the assessee is in appeal before the ITAT.
The ld. AR submitted that the assessee’s council did not represent the case properly, he was dependent on the council therefore he could not effectively pursue the appeal. He stated that the agricultural income shown by the assessee is correct. He submitted that if a chance is given to the assessee he undertook to substantiate its case with necessary documents before the CIT(A).
The ld. DR relied on the orders of lower authorities and objected to sending back the matter to the CIT(Appeals).
After considering the rival submissions and perusing the material on record, we note that the CIT(Appeals) observed that assessee was seeking time without furnishing necessary documents and decided the appeal on the basis of material on record by dismissing the appeal of the assessee. We think it fit to grant one more opportunity to the assessee to substantiate its case. Accordingly, we remit the appeal to the CIT(Appeals) for fresh consideration and decision as per law, reasonable opportunity of being heard to the assessee. The assessee is also directed to produce all the relevant documents to substantiate its claim and avoid seeking unnecessary adjournment for early disposal of the case.
In the result, the appeal of the assessee is allowed for statistical purposes.