Case Law Details
Malchira Chittiappa Nanaiah Vs Assessment Unit of Income Tax Department (ITAT Bangalore)
In the case of Malchira Chittiappa Nanaiah vs. Assessment Unit of Income Tax Department, the Income Tax Appellate Tribunal (ITAT) Bangalore issued a significant ruling overturning an ex-parte order against the appellant, an illiterate agriculturist. The appeal arose from an assessment year 2015-16 concerning the appellant’s tax liabilities.
The appeal was filed by the assessee challenging an order passed by the National Faceless Assessment Centre (NFAC) in New Delhi, dated January 12, 2024. The NFAC had upheld an ex-parte order by the Commissioner of Income Tax (Appeals) [CIT(A)], confirming the original assessment order by the Assessing Officer (AO). The ex-parte order was issued because the appellant, due to being an agriculturist and illiterate, failed to respond to notices for hearings issued by the CIT(A).
During the ITAT proceedings, the appellant’s counsel argued that the appellant was not proficient with the IT e-system and therefore did not receive or understand the notices sent electronically. This led to the ex-parte order being passed against him. The appellant’s counsel also contended that despite submitting various details during the appellate proceedings, the CIT(A) had dismissed the appeal without considering these submissions. Key documents, including land ownership certificates and details of agricultural activities, were submitted to demonstrate the appellant’s agricultural income and the validity of expenses claimed against it.
On the other hand, the Department’s representative argued that the appellant had not disclosed any income other than agricultural income for the assessment year in question. There was suspicion that undisclosed income might be camouflaged as agricultural income, a common concern in tax assessments.
After hearing both sides and examining the records, the ITAT acknowledged the appellant’s status as an illiterate agriculturist and the challenges he faced with electronic communication systems. Considering these factors, the ITAT concluded that the appellant should be given another opportunity to present his case before the revenue authorities. The appellant’s counsel assured the ITAT that all necessary details regarding agricultural expenses would be furnished promptly, without unnecessary delays.
Consequently, the ITAT decided to set aside the matter and directed the Assessing Officer (AO) to conduct a fresh adjudication in accordance with the law. This decision was based on principles of natural justice, ensuring that the appellant, despite his initial difficulties, would have a fair chance to contest the assessment. The ITAT allowed the appeal for “statistical purposes,” indicating that the decision was primarily procedural, aiming to correct the process rather than the substantive tax liability.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This is an appeal filed by the assessee against the order passed by the NFAC, New Delhi dated 12/01/2024 in DIN No. ITBA/ NFAC/ S/ 250/ 2023-24/1059657932(1) for the assessment year 2015-16.
2. At the outset, the ld. Counsel for the assessee submitted that the assessee could not respond to the notices issued by the ld. CIT(A) for hearing. It was pointed out that the assessee was an agriculturist and illiterate person, therefore, he was not well-versed with IT e-system. Hence, he did not come to know about the notices of hearing issued by the ld. CIT(A) and, therefore, ex-parte order was passed by the ld. CIT(A) confirming the order of the AO.
3. Without prejudice to the above, the ld. AR also submitted that there were many details filed before the ld. CIT(A) but the ld. CIT(A) without considering the same has dismissed the appeal of the assessee. The ld. AR in support of his contention drawn our attention to page 3 of his synopsis available in the paper book demonstrating the details furnished by the assessee during the appellate proceedings.
4. The ld. AR also submitted that the assessee during the assessment proceedings has furnished the land reference of rights, tenancy and crop as well as certificate of registration of registered owner, which evidences that the assessee was the owner of agricultural land admeasuring area of 59.49 acres, which was sufficient to generate agricultural income disclosed in the return of income. The ld. AR regarding expenses claimed against agricultural receipt submitted that all these expenses were incurred for carrying out the agricultural operations and, therefore, the same are eligible for deduction. The ld. AR further assured to furnish the necessary details in support of agricultural Thus, the ld. AR prayed to restore the issue to the file of the AO for fresh adjudication.
5. On the contrary, the ld. DR submitted that the assessee has not filed any return of income other than the year in dispute disclosing agricultural income. As per the ld. DR, the assessee is diverting its undisclosed income under the garb of agricultural operations. The ld. DR vehemently supported the order of the authorities below.
6. We have heard the rival contentions of both the parties and perused the materials available on record. Considering the fact that the assessee is an agriculturist and illiterate person and, therefore, he failed to avail opportunities before the ld. CIT(A), We are inclined to give one more opportunity to the assessee to represent his case before the Revenue authorities. The ld. AR has also given assurance to furnish the details of the agricultural expenses and the assessee shall also not seek unnecessary adjournments. Hence, we set aside the issue to the file of the AO for fresh adjudication as per the provisions of law. Thus, the ground of appeal raised by the assessee is hereby allowed for the statistical purposes.
7. In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in court on 16th day of May, 2024
Author Bio
