ITAT Gives Illiterate Farmer Another Chance on Rs 3.74 Crore Tax Dispute

The Income Tax Appellate Tribunal (ITAT) Pune remanded a tax case back to the assessing officer (AO), allowing the assessee to submit additional evidence to prove that his sale was agricultural and not a capital asset.

The assessee, Laxman Bhau Pawale, did not file his income tax return (ITR) for AY 2015-16. The case was reopened based on the information that he had sold an immovable property at Rs 3,23,80,000. The AO issued notice under u/s 148 of the Income Tax Act, but the AO did not file any ITR. Later, the AO issued a notice under section 142(1) and a show cause notice under section 144, but the assessee did not comply with the same. As a result, the AO made an addition of Rs 3,74,17,200 as an undisclosed capital gain.

The assessee approached the CIT(A), where he submitted additional evidence to prove that his land was agricultural. However, the CIT(A) refused to accept the assessee’s evidence because he did not file a proper application under Rule 46A. Therefore, the assessee filed an appeal before the Income Tax Appellate Tribunal (ITAT), Pune.

The assessee submitted that he is a farmer and an illiterate person, due to which he could not participate in the assessment proceedings. He also submitted that his brother’s similar land sale was accepted as agricultural and not a capital asset.

The ITAT noted that the AO in the case of the assessee’s brother had accepted the sale of land as agricultural land. The Tribunal noted that the assessee had submitted various information to the CIT(A) to substantiate his claim, but the same was rejected for lacking a Rule 46A application. The ITAT, in the interest of justice, gave one more chance to the assessee to prove his claim by submitting the required details before the AO.