TaxTMI 
TaxTMI 
2025 (3) TMI 209
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....been regularly under treatment in various hospitals. It is also further contended that the assessee has three daughters who are all married and he has no male child and on several occasions he along with his wife are staying in the hospitals and so also at the residences of his three daughters on various multiple occasions. That the assessee had received certain notices for A.Y 2012-13 and that for the purposes of the assessment proceedings, had engaged Shri Rohit Vashishat Advocate from Ludhiana, Punjab for representing his case before Ld. AO, ward II (4) Ropar. That later on he came to know in first week of September 2023 that certain notices have been sent by Ld. PCIT, Chandigarh -1 in March 2022 and certain order under section 263 was passed by the Ld. PCIT, Chandigarh -1 and that all such notices were found to be sent on the email of earlier counsel Shri Rohit Vashishat, Advocate and that it could not be brought to assessee's notice as the concerned counsel had no contact number of his and neither there was any occasion to visit the concerned counsel and as such, the said notices and order under section 263 dt. 22/03/2022 did not come to his knowledge. 2.1 It is further conte....
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....st and it is the only source of income of the assessee and agricultural income being exempt from tax, he never filed his ITR. 5. The assessee owns approximately 15 acres of land which is used by him for the agricultural operations and after meeting agricultural expenses, balance amount of cash is deposited in the bank account of the assessee. 6. A notice u/s 148 of the Act was issued to the assessee on 07.03.2019 on the basis of an information that the assessee had deposited cash amounting to Rs. 32,41,000/- in his bank account during the year under consideration. In response to the said notice, the assessee filed a return u/s 148 of the Act declaring an income of Rs. 6,710/- and an agricultural income of Rs. 7,80,000/- on 25.04.019. The copy of return filed by the assessee in response to notice issued u/s 148 of the Act is forming part of paper book at Pg 1-2. 7. Thereafter, during the course of assessment proceedings, it was explained before the AO that the reasons recorded for reopening of the case were incorrect as the assessee had deposited cash of only Rs. 16,91,000/- in the Punjab National Bank and such cash deposit was also explained via filing of various replies along w....
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....at the assessment as framed by the Assessing Officer vide order, dt. 03/06/2019 was erroneous and prejudicial to the interest of revenue. 2. That the Ld. PCIT, Chandigarh-1, has failed to appreciate that the assessment as framed by the Income Tax Officer, Ward-II(4), Ropar vide order, dated 3.6.2019 was with due to application of mind on the basis of various documents/submissions filed by the assessee and, thus, the assumption of jurisdiction by the Ld. PCIT, Chadigarh -1 is bad in law. 3. That the Order has been passed against the facts and circumstances of the case. 4. That the appellant craves lead to add or amend the grounds of appeal before the appeal is finally heard or disposed off. Record of Hearing 12. The hearing in the matter took place on 27/08/2024 when both the parties appeared before us and were heard on their respective submissions. The Ld. AR contended that Ld. PCIT has erred in law in passing the impugned order u/s 263 of the Income Tax Act, 1961 as the original assessment order dt. 03/06/2019 of Ld. AO i.e ITO Ward-2(4), Ropar passed in terms of section 143(3) r.w.s 147 of the Income Tax Act, is not erroneous and that same is also not prejudicial to the i....
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.... loan taken by assessee against the FDR (Pg 12) E. Copy of cash flow statement for the period 01.04.2011 to 31.03.2012. (Pg 13-14) F. Chart of agricultural income of Rs. 7,80,000 (Pg 15) G. Income certificate of assessee issued by Naib Tehsildaar, Morinda (Pg 16) H. Copy of Girdawri of the landholding of the assessee depicting agricultural operations conducted on the said land (Pg 17-22) I. Copy of agreement to sell dated 01.06.2011 for an amount of Rs. 4,50,000 along with its cancellation on the back side and copy of Jamabandi of the said land (Pg 23-26) Note: (We have noted the letter of the Ld. AO which is on page 4 of paper and first reply of assessee on pages 5 to 7 of paper book. 12.2 The Ld. AR after placing reliance on first reply during the course of the original assessment proceedings in response to notice of Ld. AO wherein all material details like bank account statement of assessee for period 01/04/2011 to 31/03/2012; information on income of Rs. 6705/- under head income from other sources, sources of agricultural income of Rs. 7,80,000/-; source of cash deposit of Rs. 32,41,000/- with PNB & the Sale/ purchase of immovable property including sale deed of th....
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.... sworn affidavit of asessee and that of the buyer / purchaser S Sukhwinder Singh were relied upon including witnesses. 12.5 The Ld. AR emphasized that two reply along with documents and supporting have met all the requisitions of the Ld. AO and that Ld. AO upon being satisfied has accepted the return in the original assessment proceedings by passing order dt. 03/06/2019 which cannot be called erroneous and prejudicial to the interest of the Revenue under section 263 of the Act. It was further submitted that following documents were filed with second reply before Ld. AO. A. Copy of Bank Account Statement of account number 86020100002809 as maintained with Punjab Gramin Bank for the FY 2010-11 (AY 2011-12) to justify opening cash in hand as on 01.04.2011 (Pg 29) B. Copy of Cash Flow Statement for the period 01.04.2010 to 31.03.2011 for the availability of the opening cash in hand as on 01.04.2011. (Pg 30-31) C. Copy of Sale deed dated 28.06.2010 for an agricultural land sold by the assessee for Rs. 7,00,000 (Pg 32-39) D. Copy of duly sworn notarized affidavits of Assessee Sh. Bhupinder Singh along with his Aadhar card in connection with cash received of Rs. 4,50,000/- for ag....
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.... inferences INCOME TAX : Where Principal Commissioner passed revision order under section263 on ground that amount of cash deposit in account of assessee was unexplained cash deposit, however, same issue in assessee's case had been specifically looked into by Assessing Officer and source of deposit was fully enquired into and explanation offered by assessee was considered and accepted, impugned order was to be quashed as revisionary powers could not be permitted to be exercised on suspicions and inferences 12.9 Reliance was further placed on Narain Singh Vs. PCIT reported in (2015) 62 taxmann.com 255 (Chandigarh Tribunal) wherein it has been held that if there was an enquiry, even inadequate that would not by itself, give occasion to Commissioner to pass order u/s 263, merely because he has a different opinion in the matter. 12.10 Reliance was place on following judgement too: "Happy Forgings Ltd. Vs. JCIT as reported in (2015) 58 taxmann.com 65(Chandigarh-Trib) Where Assessing Officer allowed depreciation on forging press after being satisfied with explanation of assessee which was supported by documents, Commissioner was not justified in invoking jurisdiction under se....
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....against said impugned order was to be dismissed - Held, yes [Para 2]" (ii) LOIL Continental Foods Ltd Vs. PCIT in ITA No. 577/Chd/2017(Chd Trib) "The Id. CIT made reference to the Explanation-2 to Section 263 and also decision of Hon'ble Supreme Court in the case of CIT Vs. Amitabhachan, 384 ITR 200. It is pertinent to note that Explanation-2 of section 263(1) would help the Id. Commissioner to take cognizance under section 263 of the Act, if no inquiry was conducted by the AO before finalizing the assessment order. No doubt the assessment orders are very brief, and did not have elaborate discussion on these issues, but it is pertinent to bear in mind that assessees have no control over the AO and cannot persuade him to draft the assessment order in a particular manner. It is the discretion of the AO, how to pass an assessment order. Had an elaborate discussion available, then that would be an ideal situation for the higher appellate authorities to appreciate, what has operated in the mind of the AO while passing the assessment. But in the absence of such discussion, it has to be ascertained from the questionnaire and the replies submitted by the assessee. Explanation-2 can....
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....vities carried on by the assessee, expenses incurred, quantum of agricultural yield, sale of agricultural receipt and receipt of income. ❖ In this regard it is submitted that once the assessee has proved the ownership of agricultural land and evidence of agricultural activities carried on by him on such land and it is also evident on record that the agricultural income declared by the assessee commensurate with the land holding of the assessee, it is sufficient enough to prove the genuineness of agricultural income disclosed by the assessee. ❖ Regarding J Form, it is submitted that there is a lag of approximately 10 years between the year of income and year of 263 proceedings and mere non-availability of J Form cannot be a ground for making addition in the hands of the assessee. ❖ Reliance in this regard is placed on the judgment of Sh. Satbir Singh Bhullar Vs. ITO in ITA No. 258/Asr/2022 wherein it has been held that the assessee possess sufficient landholding which is evident from the Jamabandi submitted by him and the agricultural operations were also evident from the Khasra/Girdawri filed by him. Therefore, the agricultural income of the assessee is prov....
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....de on stamp papers and it as signed by buyer, seller and two numbers of witnesses. The Ld. PCIT is merely making assumptions by treating the said agreement to sell as bogus and in this regard it is trite law that presumptions howsoever strong cannot take place of evidence. 12.13 The Ld. AR has also contended that Ld. PCIT in the impugned order has placed reliance on decisions which are not applicable to the facts of the present case. The Ld. AR contends that it is not a case of no inquiry as queries raised were all answered. It is case with application of mind by Ld. AO and not a case of non application of mind. 13. Per contra Ld. DR has relied upon the impugned order of Ld. PCIT in support of case of Revenue. Ld. DR contends that there is a lack of inquiry on part of Ld. AO. It is also a case of inadequate inquiry. The Ld. AO ought to have at least sent a letter to Naib Tehsildar on land issues and crops grown on it. There is no document in support of agriculture income like Mandi Fee, Kacha Adatiya, No Bill, No voucher for agri produce on record. Ld. DR has placed heavy reliance on para 5 of impugned order. Ld. AO ought to have written a letter to Mandi Board too. In which Mand....
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....hich are at pges 5, 6, & 7 of paper book. Return of Income is furnished in response to Notice u/s 148 on 30/04/2019 together with computation chart. It is made crystal clear to Ld. AO that the Assessee is an "Agriculturist" and use to cultivate his Agriculture land. The assessee has no other source of income except from agriculture land / produce. Other sources of Income are from FDR with bank and Saving Bank Account interest. Form 26AS is placed on record. Copy of agricultural income certificate for F.Y. 2011-12 issued by Naib Tehsildar, Morinda (Roopnagar) is too placed on record on page 16 of paper book. It bears all the essentials of a valid certificate issued by a public authority who is a responsible Revenue officials in our considered view. Veracity or otherwise of such an certificate cannot be doubted. A public servant in India issues certificate subject to certain condition precedent which is required to have been presumed to have been discharged by the assessee prior to issue of such a certificate by Naib Tehsildar. Naib Tehsildar do not issue Certificate casually. They issue certificate basis revenue records i.e; basis Girdawari, reports of Block Development Officers, Re....
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....ate. We are therefore of the considered view when in rural set up all courts give credence to the certificate of Naib Tehsildar or Tehsildar there is just no basis to doubt the veracity of such certificate. Be it noted certificate of Naib Tehsildar is also accompanied by the copy of Girdawari of land holding of the assessee depicting agriculture operations conducted on the said land page 17-22; copy of Punjab Gramin Bank, statement for F.Y. 10-11 A.Y 2011-12 besides other papers and document. The Ld. AO while carrying out assessment particularly so under the provisions of Section 143(3) r.w.s 147/148 do not carry out assessment of income blindly. The Ld. AO basis replies of assessee and documents accompanying it and during the course of hearing gages and swifts through the material on record. The Ld. AO exercises his discretion carefully and cautiously and upon a slightest suspicion carries out a deeper probe. In the instant case records of the assessment proceedings shows no suspicion basis the documents (supra). Under these circumstances it is far fetched to say that the Ld. AO ought to have made inquiries in respect of documents given by the assessee. Revenue must trust the asse....
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....d magnitude of evasion of tax etc are also factors which are required to be considered. At times judicial notice is required to be taken of public document, practical and day to day difficulties of the Assessing Officer's are far too many. To say in impugned order and to do it practice by Ld. AO there is a difference. Assessment is a quasi judicial process and not a judicial determination of income. In quasi judicial process unlike judicial process one has to go by some degree of preponderance of probabilities whereas in judicial process degree of proof required is beyond any reasonable doubt. This is a scuttle difference in our considered view. Revenue is required to take a call whether in all such cases enquiries are to be done as a matter of rule or not or to leave it to the wisdom and good sense of AO. In our view later recourse is best option as what is required is fine tunning and balancing Act. Every loss of Revenue cannot be called prejudice to Revenue similarly in every case inquiries are not possible with regard to each and every document produced by the assessee. 15.4 We also hold that to conduct enquiries on agriculture expense of Rs. 2,70,000/- which assessee has clai....
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....en had the amount of Rs. 4.5 lakh would not have been returned by the assessee. The Ld. PCIT therefore has erred in law as in cash flow the result is NIL. 16. In the premises after examining the record, papers and proceedings of the impugned order as well as the original assessment order dt. 03/06/2019 passed under section 143(3) r.w.s 147/148 we are of the considered view that there is no legal infirmities in the order of Ld. AO dt. 03/06/2019. We hold that due process of law with all rigorous were duly followed by the Ld. AO; appropriate notice(s) u/s 147/148, 143(2) and 142(1) were duly given and were received by the assessee. The return of income was filed as an agriculturist on 25/04/2019 declaring net income of Rs. 6710/- + Rs. 7,80,000/- as agriculture income. Detailed questionnaire were issued on 01/05/2019 for 15.05.2019 which were properly replied to by the assessee. The AR of the assessee attended the assessment proceedings and it is recorded that AR furnished all requisite information / documents called for during the course of assessment proceedings the Ld. AR furnished detailed reply alongwith documentary evidences of cash deposited in bank during the period under co....