Bangalore ITAT Restores ₹26.64 Lakh Agricultural Income Case: Upload Size Limitations on E-Portal Not a Ground to Reject Evidence

Background and Overview

The Income Tax Appellate Tribunal (ITAT), Bangalore Bench, recently addressed a significant procedural fairness question arising from the practical limitations of the Income Tax Department's online filing portal. The case involved an individual assessee, Savitha Harish, who had declared nil taxable income for Assessment Year 2017-18 after claiming agricultural income amounting to ₹26,64,274 as exempt from tax. The Tribunal's ruling underscores the principle that technical constraints on a government portal cannot be wielded against an assessee who makes a bona fide effort to comply with statutory requirements.

The matter came before the ITAT as an appeal filed against the order passed under Section 250 of the Income Tax Act, 1961 by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, pertaining to Assessment Year 2017-18.

Facts of the Case: Savitha Harish Vs ITO (ITAT Bangalore)

Return Filing and Scrutiny Selection

Savitha Harish, an individual assessee, filed her return of income on 05.08.2017 declaring total income of Rs. NIL. The claimed exemption was on account of agricultural income of ₹26,64,274. The return was subsequently picked up for scrutiny proceedings, and statutory notices under Section 143(2) and Section 142(1) of the Income Tax Act, 1961 were duly issued and served upon her.

Non-Response and Show Cause Notice

When the assessee initially failed to respond to the statutory notices, the Assessing Officer (AO) issued a final show cause notice threatening assessment on a best judgment basis under Section 144 of the Act. The notice also warned that the agricultural income claimed as exempt would be brought to tax under Section 69 of the Act in the absence of documentary proof, specifically regarding:

  • Details of agricultural landholdings
  • Particulars of purchasers of agricultural produce
  • Evidence of actual agricultural activities

Partial Compliance and Portal Upload Constraints

In response to the show cause notice, the assessee filed a detailed submission on 15.11.2019, furnishing the following documents:

  • Details of buyers of agricultural produce
  • Landholding particulars
  • Copies of lease deeds
  • Copies of Revenue and Tenancy Certificates (RTCs)
  • Bank statements reflecting receipt of sale proceeds

However, the assessee specifically communicated to the AO that the sale invoices, though available, could not be uploaded on the Department's e-portal due to file size restrictions imposed by the portal itself. She explicitly requested permission to submit physical (hard copy) versions of these invoices.

Assessment Order Passed Within Two Days

Despite receiving the assessee's submission along with her request to submit physical invoices, the AO passed the assessment order on 17.11.2019 under Section 143(3) of the Income Tax Act, 1961 — just two days after the assessee's submission. The AO held that:

  • The assessee had been granted ample opportunities
  • She had failed to substantiate the agricultural income with adequate documentary proof
  • In the absence of such evidence, the entire claimed exemption of ₹26,64,274 was denied
  • The amount was added to the assessee's total income as unexplained money under Section 69A of the Act