77-Year-Old Farmer Misguided by Tax Consultant: ITAT Condones 162-Day Delay, Orders Fresh Assessment

The Surat Bench of the Income Tax Appellate Tribunal (ITAT) condoned a 162-day delay citing 77-year-old farmer was misguided by the tax consultant and directed a fresh assessment.

Ishvarbhai Lallubhai Patel, the assessee, is a senior citizen engaged in agricultural activities who, along with five co-owners, sold an immovable property in Kosad, Surat, for a sale consideration of Rs. 1,71,72,500.

The Stamp Duty Valuation Authority (SVA) determined the Fair Market Value (FMV) at Rs. 4,45,04,100, leading to a disputed addition under Section 50C of the Income Tax Act, 1961. The Assessing Officer (AO) issued multiple notices under Sections 142(1) and 144, but the assessee failed to respond.

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The AO passed the best judgment assessment under Section 144 of the Income Tax Act, treating the assessee’s share of the sale proceeds as long-term capital gains and making an addition of Rs. 74,17,350 to his total income, which was determined at Rs. 76,87,310.

The assessee filed an appeal before the CIT(A), but due to his tax consultant’s negligence, the appeal was delayed by 162 days. The CIT(A) rejected the appeal without examining the merits, ruling that the delay was not satisfactorily explained.

Before the ITAT, the assessee contended that he was an uneducated, elderly farmer who was unaware of tax procedures and was misguided by his tax consultant. He requested the tribunal to condone the delay and allow a fair opportunity for reassessment.

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The two-member bench comprising Pawan Singh (Judicial Member) and Bijayananda Pruseth (Accountant Member) considered arguments from both parties. The tribunal observed that substantial justice should take precedence over procedural delays particularly given the assessee’s circumstances.

The tribunal ruled that the principle of natural justice warranted another opportunity and directed the AO to conduct a fresh assessment. As a condition, the tribunal required the assessee to deposit Rs. 15,000 with the Income Tax Appellate Tribunal Bar Association, Surat Bench, within two weeks. The tribunal remanded the case for reassessment and allowed the appeal for statistical purposes.

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