TaxTMI 
TaxTMI 
2025 (3) TMI 209
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....fering from various ailments including heart problem since 2019 and have 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 2....
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....aken up for hearing. The Facts 4. The assessee is an individual who is an agriculturist 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 Pu....
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....no. 36 which is form of appeal to this Tribunal. 1. That the Ld. PCIT, Chandigarh-1 has erred in passing the order u/s 263 and thereby holding that 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 d....
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.... C. Copy of statement of FDR No. 489900OR00000342 depicting FDR was made on 03.06.2011 and closure of the same on 18.06.2011 (Pg 11) D. Copy of Bank Statement of Account no. 489900PC00001314 depicting 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....
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....ount of Rs. 7,00,000/- on 29/06/2010. Reliance was placed on sale deed dt. 26/06/2010 and another document issued by Patwari, on the directions of Tesildar Morinda which is outside Morinda Nagar Council. 12.4 In respect of cancellation of agreement to sell 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) ....
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....that purchases made or commission paid was bogus, assessment order could not have been set aside under section 263. 12.8 Reliance was further placed on order of this Bench in case of Pawan Kumar Vs. ITO reported in (2022)142 taxmann.com 13 (Chandigarh Tribunal) wherein it has been held - Income Tax 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 judg....
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....sessee of being heard, invoking Explanation! to section263 - High court by impugned order held that since Assessing Officer has made inquiries in details and accepted genuineness of loans received by assessee, such view of Assessing Officer was a plausible view and same cannot to be considered erroneous or prejudicial to interest of revenue - Whether SLP 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 p....
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....evidences over and above he was required to do. ❖ Therefore, there is no lack of verification in the assessment order passed by het Ld. AO. 2. Para 6, Page 3 The AO had simply placed Jambandi on record and not conducted any further enquiry about the cultivation of land like ownership of land, size of land, description of land, period of acquisition of land and agricultural activities 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 a....
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....; The assessee generally makes cash withdrawals from bank accounts in lump sum for house hold withdrawals and there is no restriction/prohibition in law to make lump sum withdrawals as against monthly withdrawals. 7. Para 7.5 Page 4 Receipt of advance of Rs. 4,50,000 on 01.06.2011 against agreement to sell and then cancellation of the said agreement is just a bogus entry to create cash in hand. ❖ The agreement to sell was made 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 ....
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....all the "requisitions" as were sought were met by the assessee without any demur whatsoever. The original assessment was carried out in terms of Sectin 143(3) / 147 with due process. The assesse has gone through the rigors of Assessment Proceedings on all fronts. 15.1 We notice that in response to Notice on page 4 of PB"5 queries" were made and certain documents were requisitioned. We further notice that said notice(supra) was duly replied vide reply which 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 ....
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....16 of paper book bears the photograph of the assessee, it bears the signature and official seal of Naib Tehsildar. The said certificate bears a number and date. The certificate of Naib Tehsildar who in the rural set up in any state of India enjoys official authority besides having powers under land Revenue code of each state and also discharges several functions as that of a Executive Magistrate. In an area of his jurisdiction he is the representative of state. 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 co....
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....edings before Ld. AO who has engaged an AR is a indeed difficult task. The Ld. AO already had a background of assessee being agriculturists and senior citizen and rightly have taken a plausible view on document produced. To expect that Ld. AO ought to have verified and conducted inquiries with respect to such girdawari is very high expectation Ld. PCIT has drawn as practical aspect of assessment in day to day manner being done in Income Tax Office, gravity and 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 do....
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....asis to dub the amount of Rs. 4.5 lakh as bogus entry to manipulate the availability of funds in order to explain the cash deposit made by the assessee in his bank account on 09/06/2011. The Assessing Officer did not try to conduct any enquiries to ascertain the identity of Shri Sukhwinder Singh, his credit worthiness and genuineness of the given transaction; as the amount of Rs. 4.5 lakh was returned by the assessee. The need to conduct enquiries would have arisen 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.....