BALASAHEB ARJUN MALAWADE,SOLAPUR V. ITO WARD 2(3), SOLAPUR

ITA 1612/PUN/2024

AI Insights

The case involves two appeals filed by Balasaheb Arjun Malawade against the orders of the Commissioner of Income Tax (Appeals) for the Assessment Years 2018-19 and 2020-21. The primary issues in both appeals pertain to the taxation of agricultural income and the application of Sections 69A and 69C of the Income Tax Act, 1961. The assessee argued that the CIT(A) erred in upholding the levy of income tax on substantial agricultural incomes declared in the returns. The Tribunal found that the CIT(A) had not adequately addressed the merits of the case and had dismissed the appeals primarily for want of prosecution and procedural delays without substantive examination of the issues raised.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 39517 (ITAT-PUNE)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 31-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: A
• Assessment Year: 2020-2021
• Other Referred Cases: CIT Vs. Multiplan India (P.) Ltd. 38 ITD 320 (Del.), CIT Vs. B.N. Bhattacharjee & Ors. 10 CTR 354 (SC)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAMNATH P. MURKUNDE
• Assessee Lawyers: CHANDAN KATARIYA
• Keywords: Set aside; Opportunity of being heard; Unexplained expenditure; Income from undisclosed sources
• Section: 143(3); 142(1); 143(2); 250; 69C; 69A

Judgement Text

" आयकर अपीलीय अधिकरण “ए” न्यायपीठ पुणे में । IN THE INCOME TAX APPELLATE TRIBUNAL “A” BENCH, PUNE BEFORE SHRI R.K. PANDA, VICE PRESIDENT AND MS. ASTHA CHANDRA, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1608 & 1612/PUN/2024 धििाारण वर्ा / Assessment Year : 2018-19 & 2020-21 Balasaheb Arjun Malawade, At Post Hingani (PA) Post Malegaon Barshi, Solapur-413401 PAN : CNGPM3501F Vs. Deputy Commissioner of Income Tax, NFAC, New Delhi अपीलार्थी / Appellant प्रत्यर्थी / Respondent Assessee by : Shri Chandan Katariya Department by : Shri Ramnath P. Murkunde Date of hearing : 09-12-2024 Date of Pronouncement : 31-01-2025 आदेश / ORDER PER ASTHA CHANDRA, JM : Two appeals filed by the assessee are directed against the two separate orders both dated 22.07.2024 of the Ld. Commissioner of Income Tax (Appeals)/NFAC, Delhi [“CIT(A)”] pertaining to Assessment Years (“AYs”) 2018-19 and 2020-21. Since the issue(s) involved are identical, these were heard together and are being disposed of by this common order. 2. The assessee has taken the following grounds of appeal:- AY 2018-19 “1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the levy of income tax on income of agriculture of Rs.1,14,63,399. 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in application of provisions of Section 69A of Income Tax Act, 1961 on agriculture income of Rs.1,14,63,399 declared in Return of Income. 3. The appellant craves leave to add/delete/modify amend all or nay of the grounds of appeal.” AY 2020-21 “1. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in upholding the levy of income tax on income of agriculture of Rs. 68,37,057. 2 ITA No.1608 & 1612/PUN/2024 AYs 2018-19 & 2020-21 2. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in application of provisions of Section 69C of Income Tax Act, 1961 on agriculture expenditure of Rs. 1,02,55,586 declared in Return of Income. 3. That the learned Commissioner of Income Tax (Appeals) has erred both in law and on facts in application of provisions of Section 69A of Income Tax Act, 1961 on agriculture income of Rs. 68,37,057 declared in Return of Income. 4. The appellant craves leave to add/delete/modify amend all or any of the grounds of appeal.” 3. Briefly stated the common facts are that the assessee is an individual and engaged in grape farming on his own agricultural land and the land in the name of his spouse. 3.1 For AY 2018-19, the assessee filed his return of income on 09.07.2018 declaring total income at Rs. Nil. During AY 2018-19, the assessee earned net agricultural income of Rs. 1,14,63,399/- after deducting the expenses incurred, which was claimed as exempt under section 10(1) of the Income Tax Act, 1961 (the “Act”). The case of the assessee was selected for limited scrutiny. Accordingly, statutory notice(s) under section 143(2) / 142(1) of the Act were issued and served upon the assessee. The assessee failed to respond. The Ld. Assessing Officer, National E-assessment Center, Delhi (“AO”) therefore proceeded to complete the assessment at assessed income of Rs.1,14,63,399/- u/s 144 r.w.s. 144B of the Act on 23.04.2021 by making addition of Rs.1,14,63,399/- on account of disallowance of exemption of net agricultural income as income from undisclosed sources u/s 69A of the Act to the Nil income returned by the assessee. 3.2 For AY 2020-21, assessee filed his return of income on 08.01.2020 declaring total income at Rs.1,70,450/-. During AY 2020-21, the assessee declared income from other sources amounting to Rs.1,80,449/- and net agricultural income of Rs.68,37,057/- after deducting the expenses incurred, which was claimed as exempt under section 10(1) of the Act. The return was processed under section 143(1). Subsequently, the return was selected for limited scrutiny to examine the issue “agricultural income”. Accordingly, statutory notice(s) under section 143(2)/142(1) of the Act were issued and served upon the assessee. The Ld. AO issued several notices of hearing to the assessee, however, these were not responded to, except one 3 ITA No.1608 & 1612/PUN/2024 AYs 2018-19 & 2020-21 notice issued on 09.09.2022 to which a part response was filed by the assessee. In the absence of any documentary evidence filed by the assessee in support its claim of exemption of agricultural income, the Ld. AO completed the assessment at assessed income of Rs.1,72,63,093/- under section 143(3) of the Act on 16.09.2022 by making addition of (i) Rs.1,02,55,586/- on account of disallowance of the agricultural expenditure claimed by the assessee as unexplained expenditure under section 69C of the Act; and (ii) Rs. 68,37,057/- on account of disallowance of exemption of net agricultural income as unexplained money under section 69A of the Act, to the income of Rs.1,70,450/- returned by the assessee. 4. Aggrieved, the assessee challenged the above order(s) of the Ld AO before the Ld. CIT(A). For AY 2018-19, the assessee filed the appeal with a delay of 273 days which was not condoned by the Ld. CIT(A) and the appeal was dismissed by him. There was no delay in filing the appeal for AY 2020-21. Without prejudice to the above, the Ld. CIT(A) decided both the appeals on merits of the case as well. The notice(s) issued by the Ld. CIT(A) remained uncomplied with by the assessee. In the absence of any supporting documents and submissions furnished by the assessee, the Ld CIT(A) confirmed the findings of the Ld. AO for both the AYs. involved observing that the AO has passed a very reasoned and speaking order considering all the facts and circumstances of the assessee’s case. 5. Dissatisfied, the assessee is in appeal before the Tribunal for both the AYs 2018-19 and 2020-21 and all the grounds of appeal(s) relate thereto. 6. The Ld. AR submitted that the non-appearance/non-compliance before the lower authorities were not intentional. The Ld. CIT(A) has not decided the issues on merits of the case. He submitted that given an opportunity the assessee is in a position to submit the relevant documentary evidence to substantiate his case before the Ld. CIT(A). He, therefore requested that the assessee may be granted an opportunity of hearing before the Ld. CIT(A) by setting aside the matter to the file of Ld. CIT(A) to decide the appeal afresh on merits. 7. The Ld. DR had no objection to the above request of the Ld. AR. 4 ITA No.1608 & 1612/PUN/2024 AYs 2018-19 & 2020-21 8. We have heard the Ld. Representatives of the parties and perused the material on records. The appellate order(s) of the Ld. CIT(A) for both the AYs involved i.e. AY 2018-19 and 2020-21 reveals that he has applied the decision in CIT Vs. Multiplan India (P.) Ltd. 38 ITD 320 (Del.) and CIT Vs. B.N. Bhattacharjee & Ors. 10 CTR 354 (SC) and dismissed the appeal(s) of the assessee for want of prosecution. We further note that the Ld. CIT(A) has not condoned the delay in filing appeal for AY 2018-19. No doubt, the Ld. CIT(A) may decide the appeal ex-parte where the assessee does not prosecute his appeal inspite of several opportunities. None-the- less, he has to adhere to the legislative mandate enshrined in sub-section (6) of section 250 of the Act which requires him to state the points for determination, the decision thereon and the reason for the decision. We observe that the Ld. CIT(A) has passed the order in concurrence of the order of Ld. AO without himself going into the merits of the case. Thus, in our view, his order is in violation of the provisions of section 250(6) of the Act. 9. On the facts and in the circumstances of the case, we deem it fit, in the interest of justice and fair play, to set aside the order of the Ld. CIT(A)/NFAC, Delhi and restore the matter back to his file with a direction to condone the delay in filing the appeal for AY 2018-19 and to adjudicate the impugned issues involved in both the appeals for AYs 2018-19 and 2020-21 afresh and pass speaking order(s) on merit in accordance with facts and law after allowing reasonable opportunity of being heard to the assessee who shall provide the requisite support in terms of submitting the relevant documents/evidence as may be required/called upon without seeking adjournment under any pretext, failing which the Ld. CIT(A) shall be at liberty to pass appropriate order as per law. We order accordingly. 10. In the result, the appeal(s) of the assessee for both the AYs 2018-19 and 2020-21 are treated as allowed for statistical purposes. Order pronounced in the open court on 31st January, 2025. Sd/- Sd/- (R.K. Panda) (Astha Chandra) VICE PRESIDENT JUDICIAL MEMBER पुणे / Pune; दिन ांक / Dated : 31st January, 2025. रदि 5 ITA No.1608 & 1612/PUN/2024 AYs 2018-19 & 2020-21 आदेश की प्रधिधलधप अग्रेधर्ि / Copy of the Order forwarded to : 1. अपील र्थी / The Appellant. 2. प्रत्यर्थी / The Respondent. 3. The Pr. CIT concerned. 4. दिभ गीय प्रदिदनदि, आयकर अपीलीय अदिकरण, “ए” बेंच, पुणे / DR, ITAT, “A” Bench, Pune. 5. ग र्ड फ़ इल / Guard File. //सत्य दपि प्रदि// True Copy// आिेश नुस र / BY ORDER, िररष्ठ दनजी सदचि / Sr. Private Secretary आयकर अपीलीय अदिकरण ,पुणे / ITAT, Pune "