AI OCR 
TaxTMI 
TaxTMI 
TaxTMI 
2021 (8) TMI 28
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....ale of ancestral agricultural land was filed. After verification and detailed scrutiny the Ld. AO framed the assessment and as such the same cannot be treated as erroneous and prejudicial and as such action u/s 263 is bad in law. 2. Brief facts of the case as culled out from the records are that the assessee is a farmer and engaged in agricultural activities. Based on information received from All India Report (AIR) that cash sum exceeding Rs. 10,00,000/- deposited in the Saving Bank Account, notice u/s 148 of the Act was served upon the assessee on 23.03.2016. In compliance return was filed showing income of Rs. 8,390/- and agricultural income at Rs. 25,000/-. Details called for by the Ld. AO were duly supplied to the satisfaction of the Ld. AO who accepted the returned income and assessed the income at Rs. 8,390/- u/s 143(3) r.w.s. 148 of the Act on 12.12.2016. 3. Subsequently, Ld. Pr. CIT, Ujjain invoked the provisions of section 263 of the Act and issued following show cause notice to the assessee(relevant extract is reproduced below): "In this case, notice u/s 148 was issued on 23.03.3016. In compliance the assessee filed return of income on 27.09.2016 declaring total inc....
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....e assessee referring to the paper book running from pages 1 to 25 submitted that the issue of cash deposited in the bank account of the assessee had been thoroughly examined by the Ld. AO and in the assessment order itself ld. AO has observed that details with regard to source of amount deposited in cash were filed along with evidence which are kept on record and after discussing the issue, Ld. AO was satisfied and accepted the returned income shown by the assessee. 7. Ld. counsel for the assessee also submitted that land in question is an agricultural land and the source of cash deposited in bank was the sale consideration of the agricultural land owned at Village- Tigriya Sancha Dist. Dewas. Ld. counsel for the assessee submitted that similar type of facts and the issue of assumption of jurisdiction u/s 263 of the Act came up before this Tribunal in the case of Shri Ram Swaroop Bairagiand others in ITANo.633/Ind/2019 & others dated 24.11.2020 wherein Tribunal has decided in favour of the assessee after examining the facts that transaction of sale of agricultural land was duly examined by the Ld. AO. 8. Per contra Ld. Departmental Representative vehemently argued supporting the ....
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....al Director General or Director General or Principal Commissioner or Commissioner authorised by the Board in this behalf under section 120; (b) "record" shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Principal Commissioner or Commissioner; (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Principal Commissioner or] Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. Explanation 2.-For the purposes of this section, it is hereby declared that an order passed by the Assessing Officer shall be deemed to be erroneous in so far as it is prejudicial to the interests of the revenue, if, in the opinion of the Principal Commissioner or Commissioner,- (a) the order is passed without making inquiries or verification which should have been made; (b) the order is passed allowing any relief without inquiring into t....
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....assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the fourth compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. 14. It is well settled law that for invoking the provisions of section 263 of the Act both the conditions that the order must be erroneous and prejudicial to the interest of revenue needs to be satisfied. This ratio stands laid down by various Hon'ble Courts. 15. Hon'ble Jurisdictional High Court of Madhya Pradesh in the case of H.H. Maharaja Raja Power Dewas (1983) 15 Taxman 363 in para 10 of this order held that "However, the first argument, viz., that an assessment order without compliance with the procedure laid down in section 144B is erroneous but not prejudicial to the interests of the revenue conferring revisional jurisdiction on the Commissioner under section 263(1), has force. Under section 263(1) two pre-requisites must be present before the Commissioner can exercise the revisional jurisdiction conferred on him. First is that the order passe....
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....n passed by assessee was not placed before Assessing Officer - Assessing Officer accepted entry in statement of account filed by assessee and accepted same - Commissioner under section 263 held that said amount was not connected with agricultural activities and was liable to be taxed under head 'Income from other sources' - Whether, where Assessing Officer had accepted entry in statement of account filed by assessee, in absence of any supporting material without making any enquiry, exercise of jurisdiction by Commissioner under section 263(1) was justified - Held, yes 17. Hon'ble Gujarat High Court in the case of Smt. Minalben S. Parikh - [1995] 215 ITR 81 - order pronounced on 17.10.1994 - Para 12 - "From the aforesaid, it can well be said that the wellsettled principle in considering the question as to whether an order is prejudicial to the interests of the revenue or not is to address oneself to the question whether the legitimate revenue due to the exchequer has been realised or not or can be realised or not if his orders under consideration are allowed to stand. For arriving at this conclusion, it becomes necessary and relevant to consider whether the income in respec....
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.... judging the action of the Commissioner of Income-tax taken under section 263. The Income-tax Appellate Tribunal in the case of Mrs. Khaiiza S. Oomerbhoy v. ITO [2006] 101 TIJ 1095 (Mum), analysed in detail various authoritative pronouncements including the decision of the Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. v. CIT [2000] 243 ITR 83 (SC) and has propounded the following broader principle to judge the action of the Commissioner of Income-tax taken under section 263. (i) The Commissioner of Income-tax must record satisfaction that the order of the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. Both the conditions must be fulfilled. (ii) Section 263 cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer and it was only when an order is erroneous that the section will be attracted. (iii) An incorrect assumption of facts or an incorrect application of law will suffice the requirement of order being erroneous. (iv) If the order is passed without application of mind, such order will fall under the category of erroneous order. (v) Every loss of revenue cannot be ....
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....e bank account and furnish copy of statements and at point no.13 of this questionnaire assessee was asked to explain the source of cash deposited in his Saving Bank Account. So there was a specific query by the Ld. AO asking the assessee to furnish the source of cash deposited in the bank account. The information sought by the Ld. AO were duly supplied by the assessee and in letter dated 6th December 2016 at para 5 complete details of cash deposited of Rs. 32,00,000/- was furnished and for reference the same is abstracted below: As regard cash deposit in to saving bank account with state bank of India bank point, Dewas branch, it is humbly submitted that the assessee has deposited Rs. 32,00,000/- in such account out of amount sale proceeds of ancestral agricultural land situated at S.No.625,626,638 and 639 Patwari Halka NO.11, Village-Tigriya Sancha Dist. Dewas. The assessee has sold such land for Rs. 35,51,000/-. The assessee has received a sum of Rs. 8,51,000/- in token on 11.08.2008 and balance Rs. 27,00,000/- on 15.12.2008. The assessee after receiving the total sale consideration handed over the possession of land the purchasers. He has also executed Power of Attorney in fav....
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....deposited Rs. 19,05,000/- in the saving account during the year under assessmen1 We are enclosing herewith copy of family settlement (Partition) memorandum along with copy of sale agreement of agricultural land for your kind perusal. In view of the above submissions, the assessee has proper sources of cash deposits into bank account the same may please be accepted. 14. The agricultural land sold by the father of the assessee is situated at village Jasodgarh, Tehsil and District-Dewas. The road distance of the Jasodgarh fret Dewas is about 15 Kilometers. The Limit of Dewas Nagar Palik Nigam is up to Village- Bilawali and the road distance of Bilawali from Dewas is about 5 Kilometers. As such the 'agricultural land is situated beyond 8 Kilometers from the limit of local Municipal Corporation. As such the land is not a capital assets with the provisions of section 2 (14) (iii) of the Income Tax Act,1961. It is also submitted that the sale deed of agricultural land is presently not available with the assesse The father of 'the assessee had also expired on 19/02/2016. We are enclosing herewith death certificate of father for your kind perusal. The family of the assess is p....