Paloor Soman Rajeev Vs ITO (ITAT Cochin)
Income Tax Appellate Tribunal (ITAT) Cochin Bench has ordered a fresh hearing for Paloor Soman Rajeev’s appeal, which challenged an ex-parte dismissal of his agricultural income tax case by the National Faceless Appeal Centre (NFAC), also referred to as CIT(A). The tribunal’s decision, pronounced on June 13, 2025, emphasizes the principles of justice and fair play, remanding the matter back to the CIT(A) for a de novo consideration.
The case pertains to the assessment year 2020-21, for which Paloor Soman Rajeev had filed a return declaring a total income of Rs. 5,42,320 and claiming Rs. 45 lakhs as exempt agricultural income. The Assessing Officer (AO) selected the case under the e-assessment scheme due to a “substantial increase” in agricultural income compared to previous returns, aiming to verify its genuineness and the agricultural activity itself.
The AO initiated the assessment by issuing statutory notices under Section 143(2) and Section 142(1) of the Income Tax Act, 1961. These notices were served both electronically and through a designated verification unit. However, the assessee reportedly failed to respond. Consequently, a final show-cause notice was issued under Section 144 of the Act, providing a “last opportunity” to present the case. When no response was received even after this final notice, the Assessing Officer proceeded to make a “best judgment assessment” under Section 144. This resulted in the entire Rs. 45 lakhs claimed as agricultural income being treated as unexplained income, leading to a total assessed income of Rs. 50,42,320.
