ITAT directs CIT(A) to conduct Fresh Adjudication [Read Order]
The Farmer’s income was flagged for scrutiny after the authorities were privy of large transactions undertaken.
By Avinash Kurungot
January 29, 2025
The Ahmedabad Bench of the Income Tax Appellate Tribunal (ITAT) recently remitted an Income Tax matter filed by a Bacillus Thuringiensis (Bt) Cotton farmer contesting an Income Tax disallowance of a cumulative ₹3.3 Crores on account of exempt income.
The Income Tax Appeal was filed before ITAT by Axis Agri Services, a partnership firm engaged in agricultural activities, specifically in the growing of hybrid seeds for Bt cotton, a genetically modified pest resistant cotton plant that produces an insecticide to combat bollworm.
Axis Agri claimed income tax exemptions on agricultural income under Section 10(1) of the Income Tax Act, 1961 for the Assessment Years (A.Y.) 2017-18, 2018-19 and 2020-21.
However, the jurisdictional Assessing Officer (AO) deemed the same to be business income and disallowed the exemption, making income tax additions of ₹73,72,328 for A.Y. 2017-18; ₹1,39,48,267 for A.Y. 2018-19 and ₹1,18,72,706 for A.Y. 2020-21.
In Appeal before the Commissioner of Income Tax (Appeals) ( CIT(A) ), the CIT(A) issued multiple notices and opportunities to the Assessee to furnish evidence and explanations, none of which were complied with by the Assessee. Owing to the Assessee’s lack of pursuance, the CIT(A) passed an ex-parte decision against the Assessee, leading to the present case.
Represented by S. N. Soparkar and Parin Shah, the Assessee contested the disallowance of income tax by the National Faceless Appeal Centre (NFAC) citing failure by the appellate authority to duly consider the submissions made by the Assessee.
The present appeals were accompanied with an application for condoning 28 days of delay citing unavailability of the appellate order on the Income Tax Business Application (ITBA) portal at the time, along with the inaccessibility of the Assessee’s registered email ID for communication.
The two-member Bench of T.R. Senthil Kumar, Judicial Member and Makarand V. Mahadeokar, Accountant Member observed that the impugned CIT(A) order relied solely on the records adduced by the AO and paid no heed to the Assessee’s pleas of technical difficulties and condoned the delay of 28 days to file the appeal.
In the interests of justice, the ITAT allowed the appeals and set aside the impugned orders for all three Assessment Years and remitted the matter to CIT(A) for fresh adjudication after providing an opportunity of hearing to the Assessee.
Read More: https://www.taxscan.in/bt-cotton-farmer-contests-crore-disallowance-on-income-tax-itat-directs-cita-to-conduct-fresh-adjudication/484002/ (Source: https://www.taxscan.in)