TaxTMI 
TaxTMI 
2021 (7) TMI 888
X X X X Extracts X X X X
X X X X Extracts X X X X
....eing disposed of by this consolidated order. For the sake of convenience, the grounds as well as the facts narrated in ITA No. 326/SRT/2017, for the Assessment Year (A.Y.) 2008-09, have been taken into consideration for deciding the above appeals en masse. Grounds of appeal raised by the assessee in lead case in ITA No. 326/SRT/2017, are as follows: "(1) Ld. CIT[A] Valsad, has erred in law and on facts to upheld action of the A.O. for reopening of assessment u/s. 147 and issue of notice u/s. 148 of the Act. Without considering the fact that there was no escapement of income. (2) Ld. CIT[A] Valsad, has erred in law and on facts to confirm addition of Rs. 1,15,860/- made by the A.O. u/s. 68 of the Act in respect of agriculture income shown by the assessee in his return of income." 3. The facts of the case which can be stated quite shortly are as follows: The assessee before us is an individual and derives income from agricultural activities. The assessee filed her return of income for assessment year 2008-09 on 19.01.2009, declaring total income at Rs. 1,42,880/- and agricultural income of Rs. 1,15,860/-. The return of income of the assessee was processed by the ....
X X X X Extracts X X X X
X X X X Extracts X X X X
...., hence the reasons were recorded under section 148 of the Act based on the borrowed satisfaction. Shri Upadhyay, pointed out that when the assessee has disclosed the agricultural income in the return of income and if the assessing officer wanted to verify it, the assessing officer ought to have issued notice under section 143(2)(ii) of the Act within the time limit permissible under the Law, however, the assessing officer has failed to do so therefore notice issued under section 148 is not valid in the eye of law. Shri Upadhyay, also pointed out that reopening in the assessee's case is based on mere suspicion, in a mechanical manner on the basis of information received from the ADIT-Investigation wing. Shri Upadhyay, further pointed out that in assessee's case the reasons were recorded based on the statement of Shri Gajanand Budhabhai patel who could not furnish the details of agricultural income before the ADIT-Investigation. No opportunity was given to the assessee to confront the statement of Shri Gajanand Budhabhai patel, which is against the principle of natural justice. The Ld. Counsel also contended that the reasons recorded did not spell out the belief of the as....
X X X X Extracts X X X X
X X X X Extracts X X X X
....s of the inquiry report by the Investigation Wing, reopened the assessment by issuance of notice u/s. 148 of the Act. That is, assessing officer, after getting the information from the ADIT-Investigation wing, has applied his mind and then issued notice on the assessee under section 148 of the Act therefore, reopening is valid. On the perusal of the details, it is observed that the assessee has never raised any objection during the assessment proceedings regarding the reopening of the assessment. The assessee had not participated in the re-assessment proceedings at the assessment stage. This issue of reopening being bad in law was raised for the first time during the appellate proceedings. The objection raised by the assessee regarding the assumption of jurisdiction by assessing officer by issuance of notice u/s. 148 of the Act, is devoid of merits and facts therefore, the reopening of assessment under section 147 is valid and hence she prayed the Bench that all the eighteen group appeals may be dismissed. 11. On merits, Mrs. Anupama Singla, pleads that every farmer is required to maintain books of accounts and they should keep bills of purchases of pesticides and seeds, and the....
X X X X Extracts X X X X
X X X X Extracts X X X X
....n books of accounts for such a small agricultural income. The Farmer who is earning agricultural income at Rs. 1,15,860/- is considered a poor farmer and below the poverty line. Indian Farmers are by and large illiterate and they do not know the importance of income tax proceedings. Therefore, they do not keep with them purchase bills of seeds, fertilizers and labour expenses etc. The labour, who works in agricultural sector accepts only cash payment and farmer receives the cash for sale of his agricultural produce. We note that it is a general phenomenon, that a small farmer, who is earning agricultural income at Rs. 1,15,860/-, would not be in a position to run accounts department and pay salary to the accountant, therefore it cannot be expected from a small farmer to maintain books of accounts, bills and vouchers etc. For example, if we consider, say, an accountant salary Rs. 10,000/- per Month, total salary for a year comes to Rs. 1,20,000/-, which is more that agricultural income of Rs. 1,15,860/-. Therefore, it is not affordable expense. It is also a general phenomenon, that Indian Farmers are by and large illiterate and they do not know the importance of income tax procee....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... to sugar factory 5 Mo Je Dungari, Dist. Valsad 1760 0-55-65 Mango Trees No. 140 5,17,000/- Mangoes are sold to retailers at farm 6 Mo Je Dungari, Dist. Valsad 1760 0-55-65 Mango tree No. 60+ vegetables in summer+ paddy in monsoon 2,20,000/- for mangoes and 3,00,000/- for vegetables Mangoes are sold to retailers & vegetables to hawkers at farm [B] AGRICULTURAL LAND TAKEN ON GANOT: Sr. No. Village S.No./ Block No. Area Ht.- Acr.- Sqmts. Crop Grown 1 Moje Sonwada Dict. Valsad 634 0-46-36 Paddy, Mangoes, Vegetables and Sugarcane 2 Moje Sonwada Dict. Valsad 592/A 1-61-88 3 Moje Sonwada Dict. Valsad 592/B 0-36-42 4 Moje Sonwad....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... the assessment order, the AO noted that the assessee did not file any details to substantiate agriculture income of Rs. 1,15,860/- therefore, assessing officer treated Rs. 1,15,860/- as unexplained cash credit u/s. 68 of the Act. However, we note that in the appellate proceedings, the assessee has filed various land holding of the assessee and his family members and agriculture income in the form of sales of agriculture produce like mangoes, vegetables etc. The assessee has also filed before the Ld. CIT(A), the land holding records in the form No. 7/12, 8-A and 6 etc. to show that the assessee and her family members had sufficient land holding for earning agriculture income. The Ld. CIT(A) did not bring any cogent evidence on record to show that these holding records in the form No. 7/12, 8-A and 6 etc, are false and untrue. We note that Ld. CIT(A) has co-terminus power as that of assessing officer, that is, what the assessing officer can do, can be done by Ld. CIT(A). During the appellate proceedings, in response to above allegation in show cause notice, the assessee in his reply submitted copies of land holding records in the form No. 7/12, 8-A and 6 etc. The Ld. CIT(A) has not ....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has not been provided to the assessee, which is against the principle of natural justice. We note that, the CBDT's circular dated 12-03-2003 on this issue which was relied upon by the Hon'ble Madras High Court in the cases of M Narayanan & Bros vs. ACIT [2011]13 taxmann.com, and CIT vs. Khader Khan Son [2008] 300 ITR 157 and the Gujarat High Court in the case of Chetnaben Shah vs. ITO [order dt. 14-07-2016 in Tax Appeal No. 1437 of 2007], wherein the CBDT has clearly instructed that the AO should rely on credible evidence and that the material gathered in search should form the basis for framing the assessment order. We note that not allowing the assessee to cross examine the witness by the adjudicating authority though the statements of those witness were made the basis of the impugned order is a serious flaw which makes the order nullity. We note that same view expressed by the Hon'ble Calcutta High Court in the case of Eastern Commercial Enterprises 210 ITR 103 (Cal), wherein it was held that it is a trite law that cross examination is the sine qua non of due process of taking evidence and no adverse inference can be drawn against the party unless the party is put on....