Rajinder Singh Negi Vs ACIT (ITAT Chandigarh)
Delay Condoned, but Taxpayer Must Repay the Cost to Nature: ITAT Orders Plantation of 300 Protected Trees or 500 Trees for Procedural Non-Compliance
In a rather unusual order combining tax procedure with environmental restitution, the Chandigarh ITAT condoned a delay of 150 days in filing the assessee’s appeal, but imposed a novel condition: the assessee must plant 300 trees of local species with tree guards or 500 trees of local species without tree guards.
The Tribunal observed that the assessee’s repeated non-compliance before the lower authorities and the resultant appellate proceedings had caused avoidable administrative expenditure from public funds. It, therefore, directed the plantation as restitution for the environmental cost associated with the governmental and judicial resources consumed in the proceedings.
The assessee, Rajinder Singh Negi, was an individual residing in a remote area of Himachal Pradesh. The appeal related to AY 2015-16 and arose from an assessment completed u/s 143(3) on 13.11.2017.
The AO made three principal adjustments. The first related to a mismatch between the entries appearing in Form 26AS and the return of income. The second concerned agricultural income declared by the assessee, which according to the AO was substantial and had not been supported with adequate evidence. The third was an ad hoc disallowance of 10% of the expenses claimed.
According to the assessment order, these adjustments became necessary because the assessee failed to furnish the details and supporting records called for by the AO despite being granted opportunities. The assessee disputed the additions and contended that the agricultural income had been reduced merely on an estimated basis without any proper inquiry. It was also argued that the disallowance of expenses was purely ad hoc and unsupported by any identified defect in the books or vouchers.
The assessee further contended that interest income which had already been declared was wrongly treated as income from undisclosed sources u/s 68. According to him, an amount already disclosed in the return could not be characterised as an unexplained credit without examining the nature and source of the corresponding entries.
Another objection raised was that, though the order was formally passed u/s 143(3), the additions were effectively made on a best-judgment and estimated basis. The assessee alleged that adequate opportunity had not been provided to furnish the necessary documents and that the assessment consequently violated the principles of natural justice.
The appeal before the CIT(A) met the same fate because there was again no effective compliance from the assessee. The CIT(A), therefore, dismissed the appeal.
When the matter reached the Tribunal, the Registry noticed a delay of 150 days in filing the appeal. In his application for condonation, the assessee explained that he lived in a remote part of Himachal Pradesh and was unfamiliar with the use of computers and the internet. These circumstances, according to him, prevented the appeal from being filed within the prescribed period.
The Tribunal took into account the nature of the assessee’s activities, the scale of his operations and the surrounding circumstances. It decided to condone the delay so that the appeal could receive proper consideration. However, the Tribunal was not prepared to overlook the assessee’s prolonged non-compliance before the AO and the CIT(A).
According to the Bench, such conduct resulted in an avoidable burden upon the exchequer and public funds. Administrative resources of the Income-tax Department, the appellate authorities, the Tribunal & the Government of India had been consumed without meaningful cooperation from the assessee. The Bench, therefore, linked condonation of delay with a form of environmental restitution.
The delay was condoned subject to the assessee undertaking plantation of either 300 trees of local species with tree guards or 500 trees of local species without tree guards. The assessee’s counsel agreed to this condition during the hearing.
The Tribunal permitted the plantation to be carried out either directly by the assessee or through an organisation engaged in environmental protection and registered with the statutory authorities as a charitable organisation. Evidence establishing compliance with the plantation direction must be furnished both before the AO and the Registry of the ITAT.
On the merits of the appeal, it was brought to the Tribunal’s notice that two other appeals of the same assessee in ITA Nos. 741 & 709/Chd/2025 had already been restored to the CIT(A) for fresh adjudication. Following the approach adopted in those appeals, the Tribunal restored the present matter also to the CIT(A) for de novo adjudication.
The assessee was specifically directed to cooperate with the appellate proceedings. Thus, the additions were neither confirmed nor deleted on merits. All factual and legal questions concerning the Form 26AS mismatch, agricultural income, treatment of interest income u/s 68 & estimated disallowance of expenses remain open for fresh determination by the CIT(A).
The appeal was accordingly allowed for statistical purposes.
Author’s Comment
The striking feature of the order is not the remand but the condition attached to the condonation of delay. Courts and tribunals have traditionally imposed monetary costs to compensate for procedural negligence. Here, the Chandigarh ITAT converted the cost into a tangible environmental obligation by directing the plantation of local trees.
The order is careful to describe the plantation as restitution of environmental cost, arising from the administrative resources consumed by avoidable proceedings. Since the assessee’s counsel expressly agreed to the condition, the Tribunal condoned the delay and ensured that the dispute would not be rejected solely on a technical ground.
However, condonation does not amount to acceptance of the assessee’s case on merits. The assessee must now produce complete documentary evidence before the CIT(A), particularly the reconciliation of Form 26AS, proof of ownership or cultivation of agricultural land, crop details, sale proceeds, supporting expenditure vouchers & explanation of the interest entries.
The ruling offers the assessee a second opportunity, but with a green reminder attached: when procedural negligence wastes public resources, the remedy need not always be a cheque to the Treasury – it may sometimes be 300 protected trees or 500 unguarded ones returned to nature.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
1. Aforesaid appeal by assessee for Assessment Year (AY) 2015-16 arises out of an order of learned Commissioner of Income Tax (Appeals), NFAC [CIT(A)] dated 18.07.2025 in the matter of an assessment framed by Ld. Assessing Officer [AO] u/s 143(3) of the Income Tax Act, 1961 on 13.11.2017.
2. The appellant raises the following grounds of appeal:-
I. That the impugned order dated 18.07.2025 passed by learned Commissioner of Income Tax (Appeals) u/s 250 of the Act, as well as the Assessment Order dated 13.11.2017 passed u/s 143(3) of the Act, are bad in law and facts, the same deserve to be set aside.
II. That Ld. Appellate Authority has wrongly confirmed the addition made by Ld. A.O., whereby wrongly reducing the agriculture income of the appellant merely on estimation basis. The addition on account of this estimation has wrongly been made and also wrongly confirmed in the impugned appellate order, which is not sustainable in the eyes of law.
III. That the Ld. A.O. has wrongly disallowed the expenses claimed by the appellant and the same has wrongly confirmed by the Ld. Appellate Authority, whereas the same disallowance is made merely on estimation basis without any basis. The addition made on this account is wrong and deserves to be set aside being not sustainable in the eyes of law.
IV. That the interest income declared by the appellant has been wrongly treated as income from undisclosed sources u/s 68 of the Act without any basis in the impugned orders, which deserves to be set aside.
V. That the impugned assessment order has been wrongly passed u/s 143(3) of the Act, whereas all the additions have been made on best judgement basis by estimating the income/ disallowances in the impugned assessment order dated 13.11.2017.
VI. That the Ld. Authorities below failed to give proper opportunity of being heard to the appellant and also an opportunity to provide the necessary documents required for the assessment, which make the impugned orders violative of principles of natural justice.
VII. That the appellant reserves its right to add OR amend grounds of appeal during the course of appellate proceedings.
3. In this case 3 additions were made in the assessment order being the mismatch in entries in the 26AS and the return of income, large agricultural income which could not be substantiated and 10% out of the expenses claimed. The disallowances were made as the assessee did not submit the required details, despite opportunities granted by the Ld. Assessing Officer (in short AO). Before the CIT(A) also there has been no compliance, and the appeal was dismissed.
4. Before us, the registry has pointed out a delay of 150 days in filing of appeal. In the application for condonation of delay the reason given is that the applicant resides in the remote area of Himachal Pradesh and not familiar with the working of computers and internet.
5. Considering the nature of activities of the appellant, the scale of operation and other facts on record, it is held that conduct of the appellant of non-compliance before the Lower Authorities and delay in filing of appeal has caused avoidable cost to the exchequer and public funds by way of administrative cost incurred by the tribunal and government of India. Therefore, the delay is condoned subject to plantation of 300 trees of local species with tree guard or 500 trees of local species without tree guard to which the appellant counsel agreed. This plantation is by way of restitution of environmental cost as a result of administrative resources used by the Tribunal and the Government of India in the assessment and appellate proceedings without any compliance on the part of the appellant. This plantation can be undertaken by the appellant himself or through any organization working for environmental protection and registered with the statutory authorities as a charitable organization. Evidences of the same should be furnished before the AO and the registry of the ITAT.
6. During the course of hearing, the Ld. AO submitted that the two other appeals of the assessee in the ITA No. 741 and 709/CHD/2025 have been restored back to the file of CIT(A) for De Novo adjudication. Respectively, following the same this appeal is also restored back to the file of Ld. CIT(A) with direction for De Novo adjudication. The assessee is directed to cooperate in the proceedings before the Ld. CIT(A).
7. In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 11.09.2026.
