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Income Tax Appellate Tribunal, “ A ” BENCH, AHMEDABAD
Before: SHRI T.R. SENTHIL KUMAR & SHRI MAKARAND V. MAHADEOKAR
"ी टी.आर. से""ल कुमार, "ाियक सद" एवं "ी मकरंद वसंत महादेवकर, लेखा सद" के सम!। ] ] BEFORE SHRI T.R. SENTHIL KUMAR, JUDICIAL MEMBER AND SHRI MAKARAND V. MAHADEOKAR, ACCOUNTANT MEMBER आयकर अपील सं / 1042/Ahd/2023 & 1043/Ahd/2023 िनधा"रण वष" /Assessment Years : 2017-18, 2018-19 & 2020-21 respectively Axis Agri Services The Dy.CIT बनाम/ 25, Dada Estate Circle-3(1)(1) v/s. Sarkhej SanandRoad Ahmedabad – 380 015 Ahmedabad – 382 210 (Gujarat) "थायी लेखा सं./PAN: AAVFA 6219 J (अपीलाथ$/ Appellant) (%& यथ$/ Respondent) Assessee by : Shri S. N. Soparkar, Sr.Advocate and Shri Parin Shah, AR Revenue by : Shri B.P. Srivastava, Sr.DR सुनवाई की तारीख/Date of Hearing : 04/12/2024 घोषणा की तारीख /Date of Pronouncement: 06/12/2024 आदेश/O R D E R PER MAKARAND V. MAHADEOKAR, AM:
These three appeals filed by the assessee, M/s.Axis Agri Services, pertain to Assessment Years (AYs) 2017-18, 2018-19 and 2020-21, arising from the different orders all dated 15/09/2023 passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (NFAC) [hereinafter referred to as “CIT(A)”] under section 250 of the Income Tax Act, 1961 [hereinafter referred to as “the Act”]. The respective 1042 & 1043/Ahd/2023 Axis Agri Services vs. Dy.CIT Asst. Years : 2017-18, 2018-19 & 2020-21 respectively impugned orders relate to assessments completed under section 143(3) or 143(3) read with section 144B of the Act.
Since the issues involved in these appeals are common and based on identical facts, these appeals are being disposed of by this common order for the sake of convenience. The primary point of dispute across all the assessment years relates to the treatment of agricultural income claimed as exempt under section 10(1) of the Act, which was subjected to scrutiny and additions by the Assessing Officer [hereinafter referred to as “AO”].
Facts of the Case:
The assessee is a partnership-firm engaged in agricultural activities, specifically growing hybrid seeds for BT cotton. In each year under consideration, the assessee declared NIL income, claiming exempt agricultural income under section 10(1) of the Act. The cases were selected for scrutiny due to large agricultural income flagged either under the Thematic Assessment Model or CASS. During the assessments, the AO examined the genuineness of the agricultural income and its exemption claim. Orders were passed under section 143(3) or 143(3) read with section 144B of the Act, with additions made to the returned income on the basis of findings questioning the nature of the income claimed as agricultural. Following is the summary of the assessments:
Assessment Year 2017-18 2018-19 2020-21 Date of Filing Return 28/08/2017 14/08/2018 26/10/2020 Returned Income (Rs.) NIL NIL NIL 1042 & 1043/Ahd/2023 Axis Agri Services vs. Dy.CIT Asst. Years : 2017-18, 2018-19 & 2020-21 respectively Date of AO's Order 13/12/2019 25/04/2021 12/09/2022 Section under which AO's Order 143(3) 143(3) 143(3) was Passed r.w.s. 144B r.w.s. 144B Addition on account of rejecting exemption u/s 10(1) and treating 73,72,328 1,39,48,267 1,18,72,706 the income as business income (Rs.) Date of CIT(A)'s Order 15/09/2023 15/09/2023 15/09/2023
The assessee preferred appeals before the CIT(A) in respect of all three assessment years. In case of all three appeals, the CIT(A) issued multiple notices. Despite being given sufficient opportunities to furnish evidence and explanations, the assessee consistently failed to comply with the notices or submit a substantive reply. Adjournments were sought on a few occasions, but even after granting time, the required submissions were not made. The CIT(A) concluded that the assessee was not interested in pursuing the appeal diligently, leading to an ex-parte decision based on the material available on record.
Aggrieved by the orders of the CIT(A), the assessee is in appeal(s) before us with following common grounds of appeal
(s), except the quantum involved: “Ground No 1:
1. The NFAC have erred in passing the order without providing sufficient opportunities to be heard to the appellant in view of the natural justice.
2. The NFAC ought to have communicated to the appellant the date of hearing through registered number of mobile, like previous notices which are duly replied by the appellant.
3. Your appellant therefore prays to either refer the case to CIT(A)/NFAC for fresh hearing or proceed with the case on merits by your honor.
ITA Nos.1041, 1042 & 1043/Ahd/2023 Axis Agri Services vs. Dy.CIT Asst. Years : 2017-18, 2018-19 & 2020-21 respectively Ground No 2: DISALLOWANCE OF RS 73,72,328/- ( CLAIMED AS EXEMPT U/S 10(1) OF IT ACT R.W.S 2(1A) OF I.T ACT. (Quantum in case of is Rs.1,39,48,267/- and in case of ITA No.1043/Ahd/2023 is Rs.1,18,72,710/-) 1. The Id. National Face Less Appeal Centre (NFAC) erred in law and on fact while rejecting the appellants claim of exempt income u/s 10(1) r.w.s. 2(1A) of I.T Act.
2. The Ld. NFAC has upheld the order of the Ld. A.O. and rejects the appellants claim of exempt income u/s 10(1) r.w.S. 2(1A) of the I.T.Act.
3. The Id. NFAC erred in concluding that the agricultural activities carried on by the appellant is business activity.
4. The Id. NFAC erred in fact by holding that the appellant is carrying out only processing/developing seed which is not agricultural activities. 5. The Id. NFAC failed to take cognizance of appellant's submissions before the Ld. A.O. where in the appellant have explained the whole process of agriculture activity undertaken by the appellant right from selection of land, Use of seeds, fertilizers, pesticides and labour for which appellant have incurred expenditure and the same are evidenced by agreement, vouchers and bank payments. 6. The Id. NFAC erred in law by relying on age old decision of "CIT v/s Raja Benoy Kumar Sahas Roy" and ignoring the subsequent judgments which are pronounced by different judicial ITAT and High court. The said judgments are pronounced after considering the judgment of "Raja Benoy Kumar Sahas Roy". Your appellant prays to leave to add, amend or alter the grounds before or during the hearing of this appeal.”
5.1. It was observed that the appeals have been filed with a delay of 28 days, and the assessee has submitted Affidavits dated 04/01/2024 along with an application seeking condonation of the delay. The assessee has explained that the delay occurred due to the unavailability of the appellate orders on the ITBA portal, as evidenced by the grievance filed on 20/11/2023 and resolved on 09/12/2023. The orders were made available to the assessee only on 27/11/2023, after which the appeal was filed. The assessee has further submitted that the registered email-ID used for communication was 1042 & 1043/Ahd/2023 Axis Agri Services vs. Dy.CIT Asst. Years : 2017-18, 2018-19 & 2020-21 respectively inaccessible due to technical issues, which caused further inconvenience in complying with the statutory timelines.
5.2. During the course of the hearing before us the Authorized Representative (AR) of the assessee stated that the assessee did not receive last two notices issued by the CIT(A) due to the technical issues as mentioned in the Affidavits and, therefore, the notices remained to be complied with and the same resulted in ex-parte order by the CIT(A). The AR also stated that in order to have a considerate view of CIT(A), the matter be set aside to CIT(A). The Departmental Representative (DR) did not object to condoning the delay and restoring the matter to the file of the CIT(A).
5.3. Considering the genuine circumstances explained in the Affidavits, the grievance resolution report, and the absence of mala fide intent, we are of the view that the delay of 28 days in filing the appeals is attributable to reasonable causes beyond the control of the assessee. Denying the condonation would result in grave injustice to the assessee and deprive them of an opportunity to seek justice.
5.4. In view of the above, the delay of 28 days in filing the appeals for the AYs 2017-18, 2018-19, and 2020-21 is hereby condoned.
5.5. Further, we observe that the ex-parte orders passed by the learned CIT(A) were based solely on the material available on record, as the assessee failed to comply with the notices issued during the appellate proceedings. Consequently, the CIT(A) had before him only the assessment orders and the records of the Assessing Officer (AO) to rely upon while adjudicating the 1042 & 1043/Ahd/2023 Axis Agri Services vs. Dy.CIT Asst. Years : 2017-18, 2018-19 & 2020-21 respectively appeals. As a result, the appeals were dismissed without a detailed examination of the merits of the assessee's case.
5.6. Considering that the CIT(A) decided the appeals only on the basis of the AO’s orders and the material on record, and that the assessee was unable to present its case effectively due to genuine technical difficulties, we find it appropriate, in the interest of natural justice, to set aside the impugned orders of the CIT(A) for all three assessment years. We direct the CIT(A) to provide the assessee with a reasonable opportunity of being heard and to adjudicate the appeals afresh on merits, in accordance with the law.
In the result, all the three appeals filed by the assessee are treated as allowed for statistical purposes.