TaxTMI 
TaxTMI 
2022 (3) TMI 1158
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.... CIT has set aside the assessment, have been enquired into and dealt in by the concerned Assessment Officer. 4. Notwithstanding the above grounds of appeal the order as passed by the Ld. PCIT under section 263 is bad in law as the action under 263 has been taken on the basis of audit objection which is contrary to the decision of Jurisdiction Punjab and Haryana High Court in the case of CIT Vs. Sohana Woollen Mills as reported in 296 ITR 238 5. That the Pr. CIT has grossly erred in invoking the explanation-2 to section 263, since the Ld. Assessing Officer has applied his mind fully to the issues taken by the Pr. CIT u/s 263 (1). 6. That the Appellant craves leave to add or amend the grounds of appeal before the appeal is finally heard or disposed off. 3. From the aforesaid grounds it is gathered that the only grievance of the assessee relates to the jurisdiction assumed by the Ld. PCIT under section 263 of the Income Tax Act, 1961 (hereinafter referred to as 'Act'). 4. Facts of the case in brief are that the assessee e-filed his return of income on 05/11/2015 declaring an income of Rs. 73,860/- & Agricultural income of Rs. 22,10,000/-, thereafter the case was fixed for scru....
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....e without examining the expenses incurred to earn the said agricultural income and the estimated gross receipt from agricultural holding @ 52,000/- per acre was accepted as net income without considering the expenditure. The Ld. PCIT was of the view that the A.O. failed to apply his mind on the aforesaid issue and completed the assessment without making enquiries. Therefore the assessment framed was erroneous and prejudicial to the interest of the Revenue. 4.4. The Ld. PCIT observed that the opportunity of being heard and the show cause as to why the order under section 143(3) be not enhanced / modified / set aside under section 263 of the Act, was given but neither anybody attended the proceedings nor filed written submission whenever the case was fixed. The Ld. PCIT was of the view that the assessee had nothing to say in the above matter and it was held that the A.O. passed cryptic and routine order without application of mind, rendering the assessment erroneous and prejudicial to the interest of the revenue. The reliance was placed on the following case laws: * Mahalakshmi Liquor Promoters (P) Ltd. Vs. CIT (2013) 29 taxmann.com 70 * Dr. Rabindra Kumar Singh Vs. CIT(Central)....
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....income was declared by the assessee at Rs. 19,85,000/- and accepted by the department, so it cannot be said that the A.O. had not examined the agricultural income as declared by the assessee. It was contended that later on an objection was raised by the ITO-Audit, Ludhiana (copy of which is placed at page no. 38 to 39 of the assessee's paper book). It was also contended that the show cause notice based on the audit objection was issued to the assessee by the PCIT-3, Ludhiana alleging that the assessee had not filed any evidence of landholding of 60 acres taken on lease and that the estimated gross receipts of Rs. 52,000/- per acre had been accepted without considering the expenditure incurred in order to earn the same. It was stated that the date of internal audit is 23/07/2018 and the show cause notice under section 263 was issued on 11/03/2020 when the limitation time for issuing the notice under section 263 of the Act was going to expire. It was further stated that in response to the show cause notice, the reply was filed by the assessee wherein it was explained to the Ld. PCIT that the evidence of the land holding taken on lease had duly been filed before the A.O. It was also s....
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....ng similar income were also filed. Reply 2 (Page33) a) That the assessee owns 41 acres of agricultural land and approx. 50 acres have been taken on theka. b) Jamabandi of majority of the agriculture land were filed. c) Photocopies of Form J were filed depicting the sale of agriculture produce amounting to Rs. 21 Lakhs approx. d) The estimation of the agriculture income has been made on the basis of Rs. 52000 per hectare in respect of the cash agriculture income earned by the assessee. e) Similar agriculture income earned in the earlier years also. Reply 3 (Page34) a) The affidavit duly attested and verified by Sarpanch certifying the agriculture land measuring 60 acres has been taken on theka by the assessee 6.5. It was contended that from the above reply it was clear that the assessee had duly filed detailed explanation which clearly shows that the A.O. had duly applied his mind at the time of determining the assessment under section 143(3) of the Act and there was an office note given by the A.O. at the time of passing the assessment order. Therefore, the whole contention of the Ld. PCIT that there was no application of mind by the A.O. fa....
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.... section 263 of the Act. It was further submitted that the assessee had not furnished the details of the expenses and the name of the person from whom land was taken on lease and even no basis was given for adopting the agricultural income at Rs. 52,000/- per acre. Therefore the provisions contained in explanation - 2 to Section 263 were applicable and the Ld. PCIT was justified in holding that the assessment order passed by the A.O. was erroneous and prejudicial to the interest of the revenue. He strongly supported the impugned order passed by the Ld. PCIT and reiterated the observations made in the said order. 7.1. In his rejoinder the Ld. Counsel for the Assessee submitted that the assessee was showing agricultural income in the preceding as well as succeeding years which had been accepted by the department and even an Affidavit of the Sarpanch of the village was furnished in support of the claims that the assessee was owing 41 acres of agricultural land in village Tajpur and also used to take 60 acres of agricultural land on lease (Theka) from the said village and that the assessee was mostly cultivating cash crop on lease hold land, like potato, fodder, makki which were sold ....
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.... relevant details relating to the issue on which the case was selected for scrutiny then it cannot be said that the assessment so framed was erroneous or prejudicial to the interest of the Revenue. 8.1. On a similar issue the Hon'ble Madras High Court in the case of CIT Vs. Late Shri Vijay Kumar Koganti Through Lr. Smt. Brundavani Koganti [2020] 195 DTR(Mad) 428 (supra) held as under: " The reason for selecting the case for limited scrutiny through CASS was to consider two issues namely(i) substantial increase in capital in a year, and (ii) the sale consideration of the property in the IT return was less than the sale consideration of the property reported in AIT. These issues were considered by the A.O. and after p0erusal of documents verification of the IT returns of the assessee and making enquiries with the limited company where the assessee held shares, the A.O. came to the conclusion. Thus, both the issues, which were the basis for exercise of the powers under s. 263, were, in fact, the issues, which were considered by the A.O. in the limited scrutiny culminating in the order of assessment under s. 143(3). The factual matrix was appreciated by the Tribunal to hol....
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....e assessee's submissions and documents furnished by him and no material whatsoever has been brought on record by the CIT which showed that there was any discrepancy or falsity in evidences furnished by the assessee, the order of the AO cannot be set aside for making deep inquiry only on the presumption and assumption that something new may come out." In the present case also the Ld. CIT(A) exercised his jurisdiction under section 263 of the Act on the issue which was considered in depth by the A.O. while framing the assessment order, therefore the impugned order passed by the Ld. CIT(A) has no legs to stand, as the assessment order was passed by the A.O. under section 143(3) of the Act after due verification and application of mind on the issue relating to the agricultural income shown by the assessee. On the basis of the same agricultural income the Ld. Pr. CIT considered the assessment order as erroneous and prejudicial to the interest Revenue. 9. In the present case, it is claimed that show cause notice was issued by the Ld. PCIT on the basis of the audit objection copy of which is placed at page no. 38 to 39 of the assessee's paper book. 9.1 On a similar issue the Hon....