2022 (4) TMI 326 - AT - Income Tax

Characterization of income - addition on account of undisclosed income by treating the agricultural income as income from undisclosed source - HELD THAT - We find that the ld. CIT(A) confirm the action of Assessing Officer by taking view that in absence of compliance he has no reason to differ with finding of Assessing Officer CIT(A) fixed the hearing on varies date and ultimately fixed the hearing on 13.02.2018. It is recorded by ld. CIT(A) that no compliance was made by the assessee. However, find that the ld CIT(A) has not recorded his satisfaction that the notice sent through speed post was duly served on the assessee or not for hearing fixed on 13.02.2018. We find that the order of the ld. CIT (A) is not in accordance with mandate of section 250(6) of the Income Tax Act. Section 250(6) of the Act mandates that the Ld. CIT (A) while deciding the appeal is required to pass order on points of determination (grounds of appeals), decision therein on and reasons for such decision. Therefore, considering the facts and circumstances of the case, the appeal of the assessee is restored back to the file of the ld. CIT (A) to decide all the grounds of appeal on merit in accordance with law. Appeal of the assessee is allowed for statistical purpose.

Summary

Issues:
- Assessment of agricultural income as undisclosed income
- Compliance with notices and opportunities provided to the assessee
- Validity of the orders passed by the lower authorities

Analysis:

Assessment of Agricultural Income:
The assessee's appeal pertained to the assessment years 2013-14 and 2014-15, challenging the treatment of agricultural income as undisclosed income. The Assessing Officer had added the entire agricultural income to the assessee's total income from undisclosed sources due to alleged inconsistencies in statements and lack of supporting documents. The Commissioner of Income Tax (Appeals) upheld the Assessing Officer's decision, citing non-compliance by the assessee as a reason for affirmation. However, the Tribunal found the CIT(A)'s order lacking in accordance with Section 250(6) of the Income Tax Act, which mandates a detailed decision on the grounds of appeal and reasons for the decision. Therefore, the Tribunal restored the appeal back to the CIT(A) for a fresh decision on all grounds, emphasizing the need for a fair hearing and provision of necessary evidence by the assessee.

Compliance with Notices:
Throughout the proceedings, the assessee failed to comply with various notices and opportunities provided by the authorities. The Tribunal noted the habitual non-compliance of the assessee with the notices issued by both lower authorities and the Tribunal itself. The Senior Departmental Representative highlighted the repeated instances of non-attendance and lack of compliance by the assessee, leading to the dismissal of appeals. The Tribunal acknowledged the lack of appearance by the assessee despite service of notices, ultimately leading to decisions being made based on available records.

Validity of Lower Authorities' Orders:
The Tribunal scrutinized the orders passed by the lower authorities, specifically the CIT(A), and found them lacking in adherence to statutory requirements. While the CIT(A) confirmed the Assessing Officer's actions, the Tribunal observed deficiencies in the CIT(A)'s decision-making process, particularly the failure to provide detailed reasons for upholding the additions. The Tribunal directed the CIT(A) to conduct a fresh assessment, ensuring compliance with legal procedures and granting the assessee a fair opportunity to present their case.

In conclusion, the Tribunal allowed the assessee's appeal for statistical purposes, directing a reevaluation of the issues raised and emphasizing the importance of compliance and due process in tax assessments.