T.Kousalya Bai V. The Income Tax Officer, Ward I (2), Madurai

TC(MD)/1/2011

AI Insights

The case revolves around an appeal by T. Kousalya Bai against the order of the Income Tax Appellate Tribunal, which denied her claim for exemption of agricultural income for the assessment year 2003-2004. The appellant had declared an agricultural income of Rs.13,24,540 in her tax return, which was scrutinized and subsequently disallowed by the Assessing Officer, categorizing it as unexplained interest income. The Commissioner of Income Tax (Appeals) initially allowed her appeal, but the Tribunal reversed this decision, leading to the current appeal before the Madras High Court. The primary legal contention was whether the Tribunal was correct in its findings and whether it had overstepped its powers in contradicting the earlier findings of the Commissioner of Income Tax (Appeals) without new evidence.

• Counselvise Citation: [2011] 140 COUNSELVISE.COM (IT) 810792 (HC-MISC)
• Appeal Type: Others
• Pronouncement Date: 26-08-2011
• Assessment Year: misc
• Laws Referred To: Income Tax Act
• Result in Favour of: Revenue
• Court: HIGH COURT
• Department Lawyers: S SRIMATHY
• Assessee Lawyers: K RAVI
• Keywords: Agricultural income; Exemption denial; Income tax appellate tribunal; Remand Report
• Section: 144; 143(2); 260-A

Judgement Text

"1 BEFORE THE MADURAI BENCH OF MADRAS HIGH COURT DATED: 26.08.2011 CORAM: THE HONOURABLE Mr.JUSTICE P.JYOTHIMANI and THE HONOURABLE Mr.JUSTICE M.M.SUNDRESH T.C.A.(MD)No.1 of 2011 T.Kousalya Bai ...Appellant/Respondent Vs. The Income Tax Officer, Ward I (2), Madurai. ...Respondent/Appellant Prayer: The Tax Case Appeal is filed under Section 260 A of the Income Tax Act, against the order of the Income Tax Appellate Tribunal, Bench B, Chennai dated 31.08.2010 passed in ITA No.230/Mds./2010. For Appellant : Mr.K.Ravi For Respondent : Mrs.S.Srimathy for Mr.R.Sathiamoorthy JUDGMENT (Judgment of the Court was delivered by M.M.SUNDRESH,J.) By formulating the following substantial questions of law, the assessee has come forward with this appeal, being aggrieved against the order passed by the Tribunal in ITA No.230/Mds/2010: - \"1.Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal is right in disallowing the claim of exemption when no contrary evidence was led in to disprove the findings given by the Commissioner of Income Tax (Appeals) and that of the respondent herein in the remand report? 2.Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal has travelled beyond its powers in giving a finding contrary to the finding of fact of the respondent herein in the remand report without any contrary evidence on record? 3.Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in denying the exemption of agricultural income by giving a perverse finding that 13.25 acres of agricultural land was not owned by the appellant herein during the year under consideration? 4.Whether in the facts and circumstances of the case, the Income Tax Appellate Tribunal was right in denying the exemption of agricultural income for the reasons that the records of the Deputy Collector, Thirumangalam does not show any collection of agriculture income during the year?\" https://hcservices.ecourts.gov.in/hcservices/ 2 2.The facts in brief are as follows: The assessee is an individual. A return was filed for the assessment year 2003 – 2004 declaring an interest income of Rs.36,630/- and an agricultural income of Rs.13,24,540/-. The case of the assessee was taken for scrutiny and a notice under Section 143(2) was issued. Thereafter, the assessment was completed under Section 144 on 13.03.2006. The Assessing Officer passed an order holding that the agricultural income offered by the assessee is an unexplained interest income, which has not been satisfactorily proved by the assessee. 3.Being aggrieved against the order of the Assessing Officer, the assessee preferred an appeal before the Commissioner of Income Tax (Appeals), Madurai. The CIT (Appeals) allowed the appeal filed by the assessee by relying upon the remand report, since the assessee did not appear before the Assessing Officer. In the order passed by the CIT (Appeals), it has been stated that inasmuch as the income derived by the assessee by way of her agricultural operation, having not been disputed by the Assessing Officer, the same will have to be taken into account. Accordingly, the appeal filed by the assessee was allowed. The Department took the matter for further appeal to the Tribunal. The Tribunal, after considering the materials on record, was pleased to hold that the finding rendered by the CIT (Appeals) to the effect that the Assessing Officer had no objection to the income, stated to have been derived from the agricultural operation, is factually wrong. The Tribunal has further held that the information given by the assessee has not been specifically disputed or denied, cannot be a ground to hold that the assessee has properly explained the said income. 4.After considering the remand report, the Tribunal has further held that the assessee has not satisfactorily proved that the income was derived from the agricultural operation. A further finding has been given by the Tribunal that the Tahsildar, Tirumangalam, Madurai, has recorded that there was no collection made during the year 2002 – 2003, which is relevant to the assessment year 2003 – 2004. The records also show that no agricultural operation has been done on the said land. Therefore, taking into consideration of the report of the Tahsildar rejected the contention of the Assistant Appellate Commissioner in making wrong reliance upon the remand report, the Tribunal being the final fact finding authority, has allowed the appeal. Challenging the same, the present appeal has been filed. 5.The learned counsel for the appellant submitted that the Tribunal has not taken into consideration of the relevant materials. The learned counsel has further submitted that the materials available on hand at present, will have to be considered by remitting the matter back to the Assessing Officer once again. We are not able to appreciate the said contention made by the learned counsel for the appellant. 6.When the Tribunal being the final fact finding authority, on facts, held that the assessee has not proved her case regarding agricultural income, no useful purpose will be served by remitting the https://hcservices.ecourts.gov.in/hcservices/ 3 matter. When the assessee herself claims exemption on the ground that the income derived was an agricultural income, it is for her to prove the said fact. Admittedly, an opportunity was given before the Assessing Officer and in order to give further opportunity, the Assistant Appellate Commissioner has called for remand report. After calling for the remand report as rightly pointed out by the Tribunal, a wrong reliance has been made by the Assistant Appellate Commissioner. The Tribunal has gone into the entire materials available on record, including the remand report as well as the records produced at the instance of the Tahsildar and came to the conclusion that the appeal will have to be allowed. 7.We do not find any substantial question of law involved in this case, warranting interference. Accordingly, this appeal is dismissed. No costs. Sd/- Assistant Registrar(RTI Act) /TRUE COPY/ Sub Assistant Registrar To The Income Tax Officer, Ward I (2), Madurai. T.C.A(MD)No.1 of 2011 26.08.2011 nbj PA/28.09.2011/3P/2C https://hcservices.ecourts.gov.in/hcservices/ "