Chandrakant Atmaram Acharya Vs ITO (ITAT Ahmedabad)
Farmer’s Property Investment Not Unexplained – Agricultural Income Claim Ignored in Ex Parte Order ITAT Ahmedabad Remands with ₹5,000 Cost
Assessee, a small farmer, was subjected to reassessment on the basis of information from AIR/CIB that he, along with co-owners, had purchased land for ₹40.80 lakh, his share being ₹10.20 lakh plus stamp duty & registration, aggregating to an investment of ₹10.80 lakh. Since he had not filed a return of income & failed to respond to repeated notices issued under sections 148, 142(1), & 133(6), AO completed the assessment ex parte u/s 144 r.w.s. 147. In the absence of any explanation, the investment was treated as unexplained u/s 69 & added to the income. Penalty proceedings were also initiated.
On appeal, CIT(A) upheld the addition. It was observed that despite service of notices through email as per Rule 127, Assessee did not appear or file any evidence. CIT(A) held that filing of an appeal without prosecuting it had no merit & even on merits, there was no substantiation of the claim that the investment was made from agricultural income. Accordingly, the addition was sustained.
Before Tribunal, Assessee’s counsel contended that he is an illiterate farmer earning solely from sale of agricultural produce, which is exempt under the Act. Due to lack of knowledge, he was unaware of the digital notices & compliance obligations under section 139(1). It was explained that the property was purchased out of his life savings from agricultural income, mostly earned in cash. Assessee expressed willingness to now produce handwritten books of account & cash receipts to substantiate the source.
