TaxTMI 
TaxTMI 
2022 (9) TMI 596
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.... income with the observation "Large Agricultural Income Stands Explained". 2.1. Thereafter, the Ld. PCIT proceeded to issue a Show Cause Notice dated 06.03.2019 u/s. 263 of the Act. The reason mentioned for the issuance of Show Cause Notice was that it was noticed that the assessee had shown gross agricultural income of Rs. 45,42,902/- in the computation of income whereas Form 'J'/vouchers for agricultural receipts were furnished only to the tune of Rs. 37,17,517/- during the course of assessment proceedings. Thus, the assessee had failed to produce documentary evidence in respect of agricultural receipts of Rs. 8,25,385/-. It was alleged in this show causes notice that the assessment had been completed without appreciating the facts of the case and the issue had not been examined in the light of documentary evidences. The assessee was required to show cause as to why the impugned assessment should not be set aside as being erroneous in so far as it was prejudicial to the interest of the Revenue. 2.2. In response to the Show Cause Notice, the assessee filed detailed submissions and also drew attention to the various queries raised by the Assessing Officer (AO) and the rep....
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.... model agricultural Farm and for this purpose additional tube wells were also installed. It was submitted that within 10 to 12 years from the year of purchase, the land has developed into a very fertile and productive land giving good yield of cotton, wheat as well as other crops. It was further submitted that, as is the general practice in agriculture, the entire produce is usually sold in cash as most of the produce is sold in unorganized markets. It was submitted that during the year under consideration, the crop of cotton had been sold to M/s. Jaykishan Fibers Pvt. Ltd. and M/s. S.K. Traders and copies of the vouchers issued were placed at pages 71 to 80 of the paper book. It was further submitted that the factum of the assessee having earned agricultural income had been accepted by the Income Tax Department every year right from the date of purchase of land. It was further submitted that the assessee's case was reopened u/s. 147 of the Act in assessment year 2010-11 and, thereafter, after considering the explanations and replies of the assessee, the returned income of the assessee was accepted. 3.1. It was submitted that during the year under consideration, the AO had iss....
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....case of the assessee as well as his family members. 3.3. The Ld. AR submitted that, thus, the observations of the Ld. PCIT did not have any sound basis and such baseless allegations could not be made the basis of revisionary proceedings u/s. 263 of the Act. It was further submitted that all these documentary evidences were also filed before the Ld. PCIT but the same were not considered at all and he proceeded to set aside the assessment order without considering the explanations or the evidences filed by the assessee or even the case laws relied upon by the assessee. 3.4. The Ld. AR submitted that, thus, on the facts of the case, there was no lack of inquiry by the AO as has been alleged in the impugned order and prayed that the impugned order should be set aside. 4. In response, the Ld. CIT DR submitted that the Ld. PCIT, in the impugned order has made a very relevant observation that the AO had blindly accepted the version of the assessee regarding cash sales without making any inquiry and, therefore, the Ld. PCIT was perfectly justified in setting aside the assessment order. It was further submitted that apparently the AO had not even cared to verify as to whether there were ....
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....e Revenue. It is also settled law that the AO having conducted necessary inquiries and having completed the assessment after application of mind to the facts and material on record, the assessment order passed cannot be considered erroneous and prejudicial to the interest of the Revenue and would not confer power on the Ld. PCIT to invoke the power of revisionary jurisdiction u/s. 263 of the Act. 5.1. At this juncture, it will be appropriate to refer to the judgment of the Hon'ble Apex Court in the case of Malabar Industries vs. CIT (2000) 243 ITR 83 (SC) wherein the Hon'ble Apex Court has held as under: "A bare reading of section 263 of the Income-tax Act, 1961, makes it clear that the prerequisite for the exercise of jurisdiction by the Commissioner suo motu under it is that the order of the Income-tax Officer is erroneous in so far as it is prejudicial to the interests of the Revenue. The Commissioner has to be satisfied of twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous; and (ii) it is prejudicial to the interests of the Revenue. If one of them is absent-if the order of the Income-tax Officer is erroneous but is not p....