TaxTMI 
TaxTMI 
2022 (5) TMI 684
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....ferred to as "the Act" for short). It is the contention of the assessee that the order u/s 263 of the Act was passed by the ld. Pr. CIT in relation to the issue of agricultural income. In this regard, the assessee submitted that the A.O has made all necessary inquiries and before the A.O the assessee had filed copies of 7/12 extracts, bank account details and pages of diary, where the assessee had noted the details of transactions regarding agricultural income. 4. Taking ITA No. 177/PUN/2021 for A.Y. 2016-17 in the case of Ramchandra Vishnu Chaudhari, as the lead case, the ld. Pr.CIT in his order dated 12-03-2021 observed the following noteable points: (i) On going through the assessment record, it is noticed that you have own agricultural income in the ROI at Rs. 28,12,637/- in the ROI which has been derived from joint landholding admeasuring 58 acres. During assessment proceedings, in the written submission dt. 03.11.2018 you have stated that the said agricultural income is your own proportionate share (25/58) from the common gross agricultural receipts of Rs. 93, 45, 502/- which is supported by a Common Agricultural Ale. you have justified gross agricultural receipts....
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..../-in the ROI which has been derived from joint landholding admeasuring 58 acres. During assessment proceedings, in the written submission dt. 03.11.2018 you have stated that the said agricultural income is your own proportionate share (25/58) from the common gross; agricultural receipts of RS.93,45,502/- which is supported by a Common Agricultural Alc. you have justified gross agricultural receipts amounting to Rs.93,45,502/- as per sale of following agricultural produces: S.No. Particulars of crops Amount INR 01 Watermelon 2966410 02 Cotton 468782 03 Onion 510350 04 Banana 2185790 05 Vegetable 2500560 06 Urid & Mung 403910 07 Chana 309700 Total 93,45,502 In support of the above crop-wise break up of receipts, you have furnished copy of 7/12 extracts and same are available on record. O perusal of the same, it is found that during the year under consideration there is no record of cultivation of watermelon, vegetable and chana (gram) at 'pikperauttara' of the 7/12 extract of the land held by you. Thus, the alleged aggregate receipts amounting to Rs. 57,76,670/- on account of sale of wate....
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....judicial 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........." 6. We find that on going through the assessment order, the A.O has not inquired into this fact which is pertinent from 7/12 extracts that during the year there was no record of cultivation of watermelon, vegetables and chana at the "pikperauttara" of the 7/12 extracts. In such circumstances, the A.O should have inquired into details regarding receipts of Rs. 57,76,670/- on account of sale of such watermelon, vegetables and chana. That even before us also, at the time of hearing, the ld. A.R submitted that they have not submitted any details regarding this fact before the A.O., which the ld. P. CIT has brought out in his order passed u/s 263 of the Act. That on perusal of the assessment order, we do not find any reference to this fact of 7/12 extracts as brought out by the ld. Pr. CIT in his order u/s 263 of the Act. Therefore, the A.O has failed to conduct proper inquiry regarding the issue of agricultural income of the assessee. That inspite of 7/12 extracts be....
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....reme Court held as under: "The revisionary power conferred on the CIT u/s. 263 is of wide amplitude. It enables the CIT to call for and examine the record of any proceeding under the Act. It empowers the CIT to make or cause to be made such enquiry as he deems necessary in order to find out if any order passed by the AO is erroneous insofar as it is prejudicial to the interests of the Revenue. After examining the record and after making or causing to be made an inquiry if he considers the order to be erroneous, then he can pass the order thereon as the circumstances of the case justify. Obviously, as a result of the inquiry, he may come in possession of new material and he would be entitled to take the new material into account. If the material, which was not available to the ITO at the time he made the assessment, could thus be taken into consideration by the CIT after holding an enquiry, there is no reason why the material which has already come on record, though subsequent to the making of the assessment, cannot be taken into consideration by him. Moreover, in view of the clear words used in clause (b) of the explanation to Sec. 263(1), it has to be held that while call....
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....d Anor (1957) 31 ITR 872 (Cal) upholding the revisionary jurisdiction u/s 263 of the Act held that the CIT is correct in resorting to passing of an order u/s 263 of the Act when he finds from the records of the assessment orders that such are not in accordance with law, inconsequence whereof lawful revenue due to the State has not been realized or cannot be realized. The Hon'ble Delhi High Court in the case of Gee Vee Enterprises (supra) has observed and held that the position and function of the ITO is very different from that of the Civil Court. The Civil Court is neutral. It simply gives decision on the basis of pleadings and evidences which comes before it. The I.T.O is not only an adjudicator but also an investigator. It is his duty to ascertain the truth of the facts stated in the return where the circumstances of the case are such as to provoke an inquiry. It is incumbent on the part of the ITO to further investigate the facts stated in the return which if not done then with the words "erroneous" in sec. 263 shall include the failure to make such an inquiry. The order becomes erroneous simply because such an inquiry has not been made and not because there is anything wrong w....