SMT. MANIBEN OGHADBHAI DER,UPLETA, DIST. RAJKOT V. THE ITO, WARD-1 (2) (5), RAJKOT

ITA 109/RJT/2024

AI Insights

The case revolves around an appeal by Maniben Ogadbhai Der against the order of the Commissioner of Income Tax (Appeals), which confirmed the assessing officer's addition of Rs. 16,56,000 to her income for the Assessment Year 2017-18. The addition was based on the assessing officer's finding that the assessee failed to prove the source of the cash deposits in her bank account, claimed to be from agricultural income. The assessee argued that her income was solely from agriculture and sales to the municipality, which were not taxable, and thus she was not required to file a tax return or pay advance tax. The Tribunal found procedural lapses in the CIT(A)'s handling of the appeal and accepted the assessee's evidence, leading to the allowance of her appeal.

• Counselvise Citation: [2024] 140 COUNSELVISE.COM (IT) 26389 (ITAT-RAJKOT)
• Duration Of Justice: 8 month(s) 1 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 24-10-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Next Hearing Date: 15-10-2024
• Assessment Year: 2017-2018
• Appeal Filed On: 23-02-2024
• Other Referred Cases: Sreelekha Bannerjee (491 ITR 122)
• Laws Referred To: Income Tax Act
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: ABHIMANYU SINGH YADAV
• Assessee Lawyers: BIPIN ZARIWALA
• Keywords: Principle of natural justice
• Section: 250

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL, RAJKOT BENCH, RAJKOT BEFORE DR. ARJUN LAL SAINI, ACCOUNTANT MEMBER AND SHRI DINESH MOHAN SINHA, JUDICIAL MEMBER आयकरअपीलसं./ITA No.109/RJT/2024 Assessment Year: (2017-18) (HybridHearing) Maniben Ogadbhai Der, Opp. Court SVP Road, Upleta, Rajkot-360490 (Gujarat) Vs. The I.T.O., Ward-1 (2)(5), Aayakar Bhavan, Racecourse, Rajkot-396001. èथायीलेखासं./जीआइआरसं./PAN/GIR No.: ABUPD 5360 K (Appellant) (Respondent) Appellant by Shri Bipin Zariwala, A.R. Respondent by Shri Abhimanyu Singh Yadav, Sr. DR Date of Hearing 15/10/2024 Date of Pronouncement 24/10/2024 आदेश / O R D E R PER DR. A. L. SAINI, AM: Captioned appeal filed by the assessee, pertaining to Assessment Year (AY) 2017-18, is directed against the order passed by the Learned Commissioner of Income Tax(Appeals), National Faceless Appeal Centre, Delhi [in short “the Ld. CIT(A)/NFAC”],dated 28/12/2023. 2. Solitary grievance of the assessee, in this appeal is that ld. CIT(A) has erred in confirming the action of the assessing officer, in making addition of Rs.16,56,000/-. ITA 109/Rjt/2024 Maniben OgadbhaiDer Vs ITO Page | 2 3.The facts of the case, which can be stated quite shortly are as follows. During the assessment proceedings, the assessing officer noticed that assessee has deposited the cash of Rs.16,56,000/-, in the bank account, out of agricultural income, however, the assessee failed to prove that whether agricultural activities were carried on by him during the previous year, relevant to the assessment year under consideration. During the assessment proceedings, the assessee submitted that she is an agriculturist and she has submitted copy of documents relating to agriculture land and other related documents. The Assessee also submitted, before the assessing officer that on 02.07.2019 submitted that she has a lot of piece of land and she is earning Rs.9 to 10 lakh per year. She further submitted a certificate of year wise cash income from municipality. However, the assessing officer rejected the contention of the assessee and made addition of Rs.16,56,000/-. 4.Aggrieved by the order of the assessing officer, the assessee carried the matter in appeal before ld CIT(A), who has confirmed the action of the assessing officer. Aggrieved by the order of the ld. CIT(A), the assessee is in further appeal before us. 5. Learned Counsel for the assessee, relied on the submissions made before the assessing officer. On the other hand, the Ld. DR for the Revenue has primarily reiterated the stand taken by the Assessing Officer, which we have already noted in our earlier para and is not being repeated for the sake of brevity. 6. We have heard both the parties and carefully gone through the submission put forth on behalf of the assessee along with the ITA 109/Rjt/2024 Maniben OgadbhaiDer Vs ITO Page | 3 documents furnished and the case laws relied upon, and perused the fact of the case including the findings of the ld CIT(A) and other materials brought on record.We find that Ld. CIT(A) did not issue notice to the assessee during the appellate proceedings. As per procedure laid down in section 250(6) of the Act, the Ld. CIT(A), after giving notice to both the parties, that is, assessee and Assessing Officer, and after hearing both parties, should pass the order under section 250 of the Act, in accordance with law. The Ld. CIT(A) did not follow the procedure mandated by section 250 of the Act, and passed the order on different footing starting that “assessee did not deposit advance tax and also not filed return of income”, which is not acceptable. We find that assessee explained during the assessment proceeding and made it clear that her entire income is from agriculture activities and cash received from selling the agricultural produce to municipality, hence her entire income is exempt form tax, therefore she is not liable to file return of income and pay advance tax. The Ld. CIT(A) without issuing notice to the assessee, suo-moto, held that assessee is liable to pay advance tax, hence without giving notice to the assessee, and to pass the order against the assessee, is not acceptable in tax jurisprudence.Not to issue the notice of hearing to the assessee and to pass the order against the assessee, without hearing to the assessee, is against the principle of natural justice. The ld CIT(A) should have examined the documents and evidences submitted before the assessing officer, by the assessee and should have examined the correctness of the findings of the assessing officer, which he has failed to do so. 7.We note that assessee is an agriculturist. The Ld. Counsel submitted that assessee has more then 30 vigha Agricultural land. The assessee ITA 109/Rjt/2024 Maniben OgadbhaiDer Vs ITO Page | 4 submitted copy of all the documents pertaining to agricultural land before Assessing Officer; such as 7/12 extract, Registrar of records, landholding pattern, evidence of agricultural activities. We note that Assessing Officer, mainly made addition that assessee has not submitted the evidence regarding agricultural activities, carried on by her. However, the Assessing Officer did not doubt about agricultural documents submitted by assessee, during assessment proceedings. The Assessing Officer stated that no doubt, the assessee is an agriculturist and having land in her name, however, it is not proved by the assessee that really she is doing agricultural activities or not. We note that documents submitted before the Assessing Officer shows that assessee is earning agricultural income, in the range of Rs. 9 to 10 lakh per year. The assessee has income only form agricultural activities and does not have any other income except agricultural income and that is why, the assessee is not filing return of income. 8.We also note that assessee, under consideration, received cash from the municipality. The cash received from municipality has been deposited in bank account. We note that municipality is a statutory body and cash received from the municipality should be treated genuine. The assessee also submitted a certificate of year- wise cash received from municipality, before the Assessing Officer.Therefore, we find that cash from municipality, has beendeposited in the Bank account, by the assessee. Therefore, wefind that genuineness of the cash deposit has been proved by the assessee, by demonstrating the cash received from municipality. The whole exercise is to be based on facts and it is the duty of the assessing officer to marshal all the facts and come to a logical conclusion about the income of the assessee for the year under consideration. For that reliance can be placed on the ITA 109/Rjt/2024 Maniben OgadbhaiDer Vs ITO Page | 5 Judgment of Hon'ble Supreme Court in case of SreelekhaBannerjee (491 ITR 122), wherein it was held that “..... before the department rejects such evidence, it must either show an inherent weakness in the explanation or rebut it by putting to the assessee some information or evidence, which it has in possession ...” Therefore, based on these facts and circumstances, we allow the appeal of the assessee. 9. In the result, the appeal filed by the assessee, is allowed. Order is pronounced on 24/10/2024 in the open court. Sd/- Sd/- (DINESH MOHAN SINHA) (DR. A.L. SAINI) JUDICIAL MEMBER ACCOUNTANT MEMBER Rajkot *Ranjan Ǒदनांक/ Date:/10/2024 Copy of the Order forwarded to: 1. The Assessee 2. The Respondent 3. The CIT(A) 4. CIT 5. DR/AR, ITAT, Rajkot 6. Guard File By Order Assistant Registrar/Sr. PS/PS ITAT, Rajkot "