Laxman Bhau Pawale Vs ITO (ITAT Pune)
Illiterate farmer given one last chance: ITAT Pune remands undisclosed capital-gain addition
Pune ITAT set aside the orders of the lower authorities and restored the matter to the Assessing Officer for fresh adjudication, granting the Assessee a final opportunity to substantiate his claim.
The Assessee, an illiterate farmer, had not filed a return of income. Based on information that he sold immovable property for ₹3.23 crore, the AO reopened the assessment u/s 147. Due to complete non-compliance with notices u/s 148, 142(1) and 144, the AO completed an ex-parte assessment u/s 144 and treated ₹3.74 crore as undisclosed capital gains.
Before the CIT(A), NFAC, the Assessee produced additional evidence claiming that the land sold was agricultural land and not a capital asset u/s 2(14). However, the CIT(A) refused to admit the evidence for want of a formal Rule 46A application and sustained the addition, terming the Assessee’s conduct as grossly negligent.
The Tribunal took note of the fact that in the brother’s case, arising out of a similar transaction, the Department itself had accepted the land as agricultural and made no capital-gains addition. Considering the Assessee’s background as a farmer, his illiteracy, and the importance of deciding the issue on merits rather than technicalities, the ITAT held that one final opportunity ought to be granted.
Accordingly, the ITAT restored the matter to the AO with directions to examine the evidence afresh and decide the issue as per law, after granting due opportunity to the Assessee, who was cautioned against seeking unnecessary adjournments. The appeal was allowed for statistical purposes
FULL TEXT OF THE ORDER OF ITAT PUNE
