2022 (7) TMI 1529 - AT - Income Tax

Unexplained cash-deposits in bank account - AR submitted that the assessees are agriculturists and they have sold rural agricultural land and received cash component which was deposited in the bank accounts - HELD THAT - We observe that the assessees have filed certain evidences before Ld. CIT(A) during the course of appellate proceeding to justify the sources of cash deposits, although the same could not be filed before the Ld. AO. We also observe that the assessees are agriculturists who have sold the agriculture land and it is quite possible that the land is situated in rural area and therefore not taxable. But, however, the capital gain has been taxed by AO for the lack of evidence. We observe that tax has to be paid on proper taxable income and the proper taxable income can be computed only after examining the relevant evidences. We further observe that the assessees are agriculturists and did not have sufficient means to deal the income-tax issues adequately. Therefore, in the interest of granting substantial justice to the assessees, we are of the considered view that an opportunity should be given to assessees to represent their case fully before the Ld. AO. Appeals of assessee are allowed for statistical purposes.

Summary

Issues Involved:
- Delay in filing appeals
- Taxability of cash deposits from sale of agricultural land
- Rejection of evidences by the Assessing Officer and Commissioner of Income-Tax (Appeals)
- Request for remand to Assessing Officer for proper assessment

Delay in filing appeals:
The appeals filed by different assessees faced a delay of 13 days, attributed to the illness and subsequent death of a close relative. The delay was condoned considering the compelling circumstances, enabling the proceedings to continue.

Taxability of cash deposits from sale of agricultural land:
The revenue initiated cases under section 147 to investigate cash deposits in the bank accounts of the assessees arising from the sale of rural agricultural land. The assessees explained that the cash component was from the sale proceeds, which were not fully evidenced. The Assessing Officer (AO) rejected the explanations, leading to additions in the assessment orders. The assessees contended that they are agriculturists and the land sold was not taxable, but the AO taxed the capital gains due to lack of evidence.

Rejection of evidences by the Assessing Officer and Commissioner of Income-Tax (Appeals):
Although the assessees submitted evidences during the appellate proceedings to justify the cash deposits, the AO did not admit them. The Commissioner of Income-Tax (Appeals) also did not grant any relief based on the evidences submitted. The assessees, being agriculturists, faced challenges in adequately representing their case before the authorities, leading to the need for further opportunities to present their case effectively.

Request for remand to Assessing Officer for proper assessment:
After hearing both sides and considering the submissions, the Tribunal observed the need to grant substantial justice to the assessees. Recognizing the limitations faced by the assessees in dealing with income tax matters, the Tribunal remanded the case back to the AO to provide the assessees with another opportunity to present their case fully. The AO was instructed to consider the submissions, assess the income in accordance with the law, and ensure proper taxation based on the relevant evidences.

In conclusion, the appeals of the assessees were allowed for statistical purposes, emphasizing the importance of granting fair opportunities for representation and ensuring proper assessment based on evidence and legal provisions.