TaxTMI 
TaxTMI 
2025 (6) TMI 472
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....is request for condonation of delay in filing my appeal (Form 36) before the Hon'ble Income Tax Appellate Tribunal, Jaipur. The appeal pertains to the assessment year [AY 2014-15]. Regrettably, I was unable to file the enclosures with the Form 36 within the prescribed time limit due to unavoidable circumstances. The delay of 26 days was caused by unawareness about the filling procedures the Form 36 was filed on time but due to some technical issue enclosure to the FORM 36 were not uploaded. I assure the Hon'ble Tribunal that the delay was not deliberate or due to any negligence on my part. It was purely due to reasons beyond my control, and I have acted promptly to file the enclosures as soon as the circumstances permitted. I firmly believe that my case has merit, and if the delay is condoned, it would enable me to pursue my rightful remedies and obtain justice. I respectfully submit that condoning the delay would not cause any prejudice to the revenue authorities. In light of the above, I kindly request the Hon'ble Tribunal to condone the delay in filing my appeal and accept it for adjudication. I am prepared to provide any further information or documents re....
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....e by issuing a notice u/s 142(1) dated 14/9/2021, requiring the assessee to show-cause as to why the case should not be completed ex-parte u/s 144. But, this notice too remained un complied with till date. Since, plenty of opportunities were given to the assessee but the assessee did not come forward to submit his submission in respect of various notices issued to the assessee, in these circumstances ld. AO left with no other option but to complete the assessment proceedings ex-parte u/s 144 of the Act. While doing so ld. AO made an addition of Rs. 94,50,000/- as the assessee failed to furnish the documentary evidences in respect of sources of cash deposits as unexplained money u/s 69A r.w.s. 1158BE, into total income of the assessee. 7. Aggrieved from that order of assessment the assessee preferred an appeal before the ld. CIT(A). Apropos to the grounds so raised the relevant finding of the ld. CIT(A) is reiterated here in below: 3. Observations, Finding and Decision: 3.1 I have perused the assessment order and other relevant records. The assessment order was passed under section 147 of the Income-tax Act, 1961, against which the appellant preferred an appeal before the under....
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.... of the assessee in default made following observation in their order. "If the party, at whose instance the reference is made, fails to appear at the hearing, or fails in taking steps for preparation of the paper books so as to enable hearing of the reference, the court is not bound to answer the reference." (c) In the case of Commissioner of Income-tax vs Multiplan India (P) Ltd. 38 ITD 320(Del), the appeal filed by the revenue before the Tribunal, which was fixed for hearing, but on the date of hearing nobody represented the revenue/appellant nor any communication for adjournment was received. There was no communication or information as to why the revenue chose to remain absent on that date. The Tribunal on the basis of inherent powers, treated the appeal filed by the revenue as un admitted in view of the provisions of Rule 19 of the Appellate Tribunal Rules, 1963. (d) Further, the law assists those who are vigilant and not those who sleep over their rights; i.e. "vigilantibus non dormientibus, jura subveniunt". 3.5 I, therefore, dismiss all the grounds of appeal filed by the assessee. 4. In the result, the appeal is dismissed." 8. Aggrieved with that order of the ld.....
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....ling large sums of cash. There was no element of concealment, manipulation, or tax evasion in this transaction. 6. The deposits were made as follows: * Rs.9,00,000/- on 22.08.2013 (received as advance/Bayana). * Rs.61,00,000/- on 02.09.2013 (on the date of the sale agreement). * Rs.20,00,000/- on 09.09.2013 (via cheque upon handover of possession). * The balance amount was kept in hand and later utilized on 01.10.2013. 7. The deposit of the majority of the sale proceeds on the very same date as the sale agreement clearly establishes that the payments were received by the Appellant for the sale of land. 8. The Appellant's case was selected for scrutiny under Section 143(3) of the Income Tax Act, 1961. However, due to his complete lack of familiarity with tax laws and procedures, he remained entirely unaware of the ongoing assessment proceedings. The Appellant, being a senior citizen with no prior experience in financial or taxation matters, had never used email and did not possess any knowledge of electronic communication methods. 9. Furthermore, he never received any physical notices by post at his residence, leaving him completely uninformed about the assessment in....
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....e Income Tax Return (ITR) for the Assessment Year 2013-14 was purely unintentional and arose solely from his genuine belief that the sale of rural agricultural land was not taxable. Being a senior citizen engaged exclusively in agricultural activities, the appellant had no prior exposure to taxation laws and was unaware of any requirement to report the transaction. He had never filed an ITR or had any knowledge about the ITR. 4. There was no element of concealment or tax evasion, as the entire sale consideration was received and transparently deposited in the appellant bank account. Given his age, rural background, and limited financial literacy, the appellant acted under the bona fide impression that no tax liability arose from the sale of agricultural land, as such transactions are explicitly exempt under the Income Tax Act, 1961. 5. The Appellant received an advance payment of Rs.9,00,000/- on 22.08.2013, which was deposited in his bank account. Subsequently, on 02.09.2013, the Appellant executed the sale deed received Rs.61,00,000/- and deposited an additional Rs.61,00,000/- on the same day in his bank account. Further, on 09.09.2013, an amount of Rs.20,00,000/- was deposit....
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.... under Section 69A read with Section 115BBE. The total sum was erroneously added to the Appellant's taxable income, despite the fact that the deposited amounts were directly linked to the sale of rural agricultural land, a transaction explicitly exempt from taxation under the Act. 13. As a consequence of the ex-parte assessment, an unwarranted tax demand of Rs.52,59,180/- was raised against the Appellant. Furthermore, penalty proceedings under Sections 271(1)(b), 271(1)(c), and 271F were initiated, along with the levy of interest under Sections 234A and 234B. The additions and penalties were imposed without conducting a proper inquiry into the nature of the deposits and without considering the statutory exemption available to the Appellant. 14. The Appellant first became aware of the addition to his income only upon receiving the demand notice under Section 156. As he had no prior knowledge of the assessment proceedings, he immediately sought assistance from a relative with some knowledge of taxation laws. With the help of his relative, the Appellant engaged a professional to file an appeal before the Hon'ble Commissioner of Income Tax (Appeals). 15. Despite filing the appeal....
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....on'ble Tribunal to adjudicate the matter in the spirit of fairness, justice, and good conscience. Submission Details: Being aggrieved by the said order of the AO, please find below the ground-wise written submissions for your kind perusal: Ground No. 1- The Ld. Assessing Officer has erred in treating the sale proceeds from the sale of rural agricultural land of Rs. 94,50,000/- as income u/s 69A r.w.s. section 115BBE. 1.1. As stated in the facts mentioned above, the appellant is a senior citizen and a dedicated farmer who has been engaged in agriculture for several decades. With limited literacy, he has no formal understanding of taxation and banking systems. 1.2. The appellant, having solely derived his income from agricultural activities, which are exempt from income tax, was never required to file an Income Tax Return. Consequently, he neither filed an ITR nor possessed any knowledge of the taxation system and its compliance requirements. 1.3. The appellant resides in a remote village where there is minimal awareness of taxation policies and the statutory obligation to report financial transactions to the authorities. Given this lack of awareness, he had no understand....
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.... will hold good and in continuation to the same, the appellant has explained the deposit of cash and cheque amount by vehemently arguing that the same has been generated out of sale of rural agricultural land during the financial year 2013-14 and the appellant has stated that the same are the sale proceeds of the rural agricultural land and is also now submitting the sale agreement and bank statements for substantiating his claims. 4.2. The assessee would also like to place on record the copies of the sale deed and bank statement clearly stating the direct correlation with amount and date of deposits establishing the source of deposits in account is from the sale proceeds of rural agricultural land. 4.3. Hence, undoubtedly, the appellant has sold of his rural agricultural land and deposited the amount received from the sale proceeds into his bank account and there was no unexplained cash/money and hence no amount can be treated as unexplained cash/money in the hands of the assessee after considering the sale deed details and the bank statement as placed before your goodself by the appellant. 4.4. Furthermore, the appellant had no malafide intention of concealing or underrepor....
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....ncy of notices which remained unresponsive during the course of assessment and appeal to the Hon. CIT(A). 5. Ground No. 5- The Assessing Officer proceedings has erred in law and facts of the case in initiating the penalty proceedings under section 271(1)(b), 271(1)(c) and 271F. 6. Ground No. 6- The Appellant herein craves its right to alter, amend, modify, add or withdraw any ground of appeal and or take any additional grounds of appeal. The appellant would like to bring to honorable bench's kind notice the additional evidence/documents which is as follows: 1.1. The copies of the sale deed of land for demonstrating that the appellant has executed sales and the amount was received against the said sales and hence, is not in the nature of the unexplained money u/s 69A as is framed in the impugned assessment order. 1.2. A bank statement showing correlation of sale date and deposits dates. 2. The learned Assessing Officer is not justified in charging interest under the provisions of section 234A and section 234B of the Act under the facts and circumstances of the case. 2.1. Without prejudice the rate, period and quantum are not discernible from the order of assessment as ....
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....e Tax Act, 1961: 2.5.1 Section 271(1)(c) - Penalty for Concealment of Income or Furnishing Inaccurate Particulars "271. (1) If the Assessing Officer or the Commissioner (Appeals) or the Principal Commissioner or Commissioner in the course of any proceedings under this Act is satisfied that any person- (c) has concealed the particulars of his income or furnished inaccurate particulars of such income, he may direct that such person shall pay by way of penalty, in addition to tax, if any, payable by him, a sum equal to the amount of tax sought to be evaded by reason of the concealment of income or furnishing of inaccurate particulars of such income." Section 271F - Penalty for Failure to Furnish Return of Income (Repealed w.e.f. AY 2018-19 by Finance Act, 2017) "271F. If a person who is required to furnish a return of income under section 139(1) or by the proviso to that sub-section, fails to furnish such return before the end of the relevant assessment year, the Assessing Officer may direct that such person shall pay by way of penalty a sum of five thousand rupees." 2.5.2. No Concealment or Inaccurate Particulars - Section 271(1)(c) The penalty under Section 271(1)(....
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....3. If income is disclosed and explained then same normally would be taxable in ordinary manner. In the actual case of the appellant the amount deposited in the bank are from the sale proceeds of an agricultural land which situated in rural area. Sale proceeds of such rural agricultural land are totally exempt from the income tax. 3.4. Considering all the above submissions and the facts highlighted and the ambiguity in the data that the department has in its possession, has tried to be applied against the appellant lacks clarity and in such a circumstance no order of addition under section 69A r.w.s Section 115BBE and penalties under section 271(1)(b),271(1)(c) and 271F is warranted and is completely illegal and anti-vires the provisions of the law for which it was created. Addition in income u/s section 69A and Penal provisions needs due attention and needs to be exercised with great caution. Hence no such action is tenable in the eyes of law in view of all the above discussions. Judicial Pronouncements: 1. Balwinder Singh Bajwa vs. ITO, Ward, Sunam (ITAT Amritsar, April, 2024): 1.1. Facts of the Case: Balwinder Singh Bajwa, a resident of a rural area, was engaged solely ....
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.... Income Tax Act, 1961. The Assessing Officer (AO) initiated proceedings, questioning the non-disclosure of the transaction and the difference between the sale deed value and the actual consideration. 2.2. Judgment & Tribunal's Observations: The Income Tax Appellate Tribunal (ITAT) Jaipur upheld that the gains arising from the sale of rural agricultural land are exempt from capital gains tax, as such land does not qualify as a capital asset under Section 2(14) of the Income Tax Act. The Tribunal acknowledged that executing sale deeds at circle rates is a common practice to minimize stamp duty and that the actual higher consideration received does not alter the tax-exempt status of the income. Furthermore, the ITAT noted that since the assessee's income was solely from agricultural sources, there was no mandatory requirement to file an ITR, and the non-filing did not imply concealment of income. 3. DCIT vs. Rama Narayanan (ITAT Chennai, December 2022) 3.1. Facts of the Case: In this case, the assessee, Rama Narayanan, sold agricultural land and received a portion of the sale consideration in cash ("on-money") over and above the amount stated in the registered sale deed.....
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.... (ITAT Chandigarh, 2017) 6.1. Facts of the case Mohinder Singh sold agricultural land and, at the purchaser's insistence, executed the sale deed at a value significantly lower than the actual consideration to reduce stamp duty liabilities. The actual sale consideration was Rs.2,46,30,000, while the registered sale deed showed only Rs.42,37,500. The Assessing Officer sought to tax the difference as undisclosed income. 6.2. Judgement and Tribunal's Observation The ITAT Chandigarh acknowledged that understating sale consideration in registered deeds to avoid stamp duty is a common practice. However, the Tribunal held that the actual consideration received, being from the sale of agricultural land, retains its character as agricultural income and is thus exempt from taxation. This ruling highlights that even when sale deeds reflect lower values, the actual higher consideration received for agricultural land does not attract tax liability. 7. Ajmer Singh, Mohali vs. ITO,W-6(5), Mohali (ITAT Chandigarh,2024) 7.1. Facts of the case Ajmer Singh sold a parcel of agricultural land located in a rural area. The sale deed was registered at the government-notified circle rate, ....
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....nt relief against the order of Ld. Assessing Officer and issue needful direction for the deletion of the addition made to income. (2) to pass such other order (s) as it deems fit and proper ." 9. To support the contention so raised in the written submission reliance was placed on the following evidence / records: SR. NO. CONTENTS PAGE NOS. 1 Submission 01-27 2 Order of CIT(A) 28-31 3 Form 36 with Ground of Appeal 32-33 4 Order of ITO 34-38 5 Form 35 with Ground of Appeal 39-44 6 Aadhar Card of Appellant (Roshan Lal) 45 7 Proof of Farming Occupation 46 8 Bank Statement 47-49 9 Sale Deed of Rural Agricultural Land 50-58 10 The ld. AR of the assessee in addition to the above written submissions submitted that before ld. CIT(A) four notices were issued to the consultant of the assessee. But the consultant has not informed to the assessee and assessee being a 74 year old senior citizen engaged in farming, who has spent his entire life in agricultural activities. He has never been involved in any other trade, business or profession. His primary source of livelihood has been received from agricultural activities. For the F.Y 2013-14, the assessee sold rur....