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Facts
The Assessee declared agricultural income and income from other sources, which was selected for scrutiny. The Assessee failed to comply with statutory notices and submitted documents late due to technical issues with the Income Tax website. The Assessing Officer (AO) made additions for unexplained agricultural income and unexplained deposits during demonetization.
Held
The Tribunal noted that the Assessee made efforts to submit documents and evidence via email due to website issues, but the AO passed the assessment order without waiting for the reply. The Commissioner also did not entertain the additional evidence. The Tribunal found the authorities' findings lacking in reasonability and decided to remand the case.
Key Issues
Whether the addition of unexplained agricultural income and unexplained deposits were justified, considering the Assessee's inability to furnish documents within the stipulated timeline due to technical issues.
Sections Cited
250 of the Income Tax Act, 1961, 115BBE of the Act, 69A of the Act, Rule 46A, Rule 46 of the Income Tax Rules, 1962
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, “B” BENCH, BANGALORE
Before: SHRI NARENDER KUMAR CHOUDHRY & SHRI LAXMI PRASAD SAHU
O R D E R Per N.K. Choudhry (JM):
This appeal has been preferred by the Assessee against the order dated 20.09.2023 impugned herein passed by the National Faceless Appeal Centre/Learned Commissioner of Income Tax (Appeals) (in short “the Ld. Commissioner”) u/s.250 of the Income Tax Act, 1961 (in short “the Act”) for the AY 2017-18.
In the instant case, the Assessee had declared total income of Rs.27,96,450/- by filling it’s the return of income dated 31.10.2017, which was selected for scrutiny under CASS and subsequently, the statutory notices were issued to the Assessee which remain un- complied with. Thereafter, final show cause notice dated 30.11.2019 was issued, whereby, the Assessee was asked to show cause ‘as to why’ the assessment should not be completed ex- parte u/s.144 of the Act by making best judgment assessment and to furnish his reply by not later than 04.12.2019. The said notice also remain un-complied with. Therefore, the AO ultimately held the agricultural income of Rs.22,65,491/- as unexplained income and added back to the total income of the Assessee under the head ‘income from other sources’. The AO also treated the amount of Rs.28,20,000/- deposited by the Assessee in its bank accounts during demonetization period and taxed as per Sec.115BBE of the Act.
The Assessee being aggrieved challenged the aforesaid additions before the Ld. Commissioner and during the appellate proceedings also filed an application for additional evidence, which was not entertained by the Ld. Commissioner by holding as under:
6.1.3 I have carefully considered the matter. It is seen from the assessment order that the Assessee was asked to furnish the documentary proof regarding agricultural land details such as RTC, crops grown, receipts for sale of agricultural produce and expenses incurred for earning the same. During the year under consideration, no documentary evidence, whatsoever, has been produced by the appellant to prove the genuineness of the claim. In such a situation, the additional evidence submitted at the stage of appeal cannot be entertained u/s rule 46A . 3.1 The Ld. Commissioner also confirmed the addition of Rs.28,20,000/- as made by the AO u/s.69A r.w.s.115BBE of the Act.
The Assessee being aggrieved is in appeal before us.
The Ms. Sunaiana Bhatia, Ld. Counsel, drew our attention to Para No.4 of the assessment order, wherein, it appears clearly that vide show cause notice dated 30.11.2019, the Assessee was asked to furnish its reply by not later than 04.12.2019 which as per the AO remain un-complied with. However, as per the Assessee, agricultural land records like RTC were requested from the concerned State Government Authorities, which were made available to the Assessee only 03.12.2019 and therefore, sent to the Ld. Counsel for the Assessee immediately. As the Income Tax website for e-proceedings was locked for uploading the document on 04.12.2019, therefore, the Ld. Counsel for the Assessee sent the details as required by the IT Authorities by e-mail and it is a fact that the IT Authorities acknowledged the same on the next day. The Assessee further claimed that even details for cash deposits during demonetization period were also sent by e-mail. The Assessee by drawing our attention to the Page No.22-23 of the Paper Book, tried to substantiate its aforesaid claim.
6. On the contrary, the Ld. DR refuted the claim of the Assessee.
We by giving thoughtful consideration to the peculiar facts and circumstances of the case observe that admittedly, the Assessee was granted last and final opportunity to file the relevant document not later than 04.12.2019 and as per the Assessee, he tried to upload the documents, however failed to upload the same due to blocking of the Income Tax Website for e-proceedings and therefore, the Assessee by filing its e-mail along with the documents/three attachments on 04.12.2019 at 11:21 PM tried to substantiate its claim, but the AO on 04.12.2019 itself without waiting for the reply from the Assessee, passed the assessment order. Even otherwise, the Ld. Commissioner refused to entertain the additional evidence under Rule 46 of the Income Tax Rules, 1962 (in short “the Rules”) on the ground that the Assessee has not produced documentary evidence to prove the genuineness of its claim. We have given thoughtful consideration to the peculiar facts and circumstances of the case again and observe that findings of the authorities below somewhat lacking the reasonability as the AO on the very same date i.e. 04.12.2019 on which date the Assessee was supposed to furnish its reply as per show cause notice dated 13.12.2019, passed the assessment order . The Ld. Commissioner also not given any independent findings for not entertaining the additional evidences as well as reasons submitted by the Assessee for not uploading the details/documents on 04.12.2019. Hence, considering the peculiar facts and circumstances in totality, we for proper and just decision of the case and substantial justice, are inclined to remand the instant case to the file of the AO for decision afresh, suffice to say by affording reasonable opportunity to the Assessee to substantiate its claim. The Assessee is also directed to file the relevant documents/reply as would be necessary and needed for proper and just decision of the case. Consequently, the case is remanded accordingly.
In the result, appeal filed by the Assessee stands allowed for statistical purposes.
Order pronounced on the 21st day of February, 2024, as per Rule 34(5) of the Income Tax {Appellate Tribunal} Rule 1963. Sd/- Sd/- (LAXMI PRASAD SAHU) (NARENDER KUMAR CHOUDHRY) ACCOUNTANT MEMBER JUDICIAL MEMBER
TLN, Sr.PS (on Tour)