2025 (6) TMI 1707

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....he orders of authorities below are that the assessee is a firm and deriving income agricultural income and other sources, filed its return of income declaring nil income on 5.10.2020. Thereafter, the case of the assessee was selected for scrutiny and assessment u/s 143(3) of the Income Tax Act, 1961 (in short "The Act") was passed by the AO vide order dated 21.9.2022. Thereafter, the office of the Principal Commissioner of Income Tax, Bengaluru-2 called for the assessment record and observed that the AO's order is erroneous and prejudicial to the interest of revenue in as much as the AO has wrongly accepted that the assessee is deriving income from agriculture. The ld. PCIT observed that assessee firm is engaged in the business of manufactu....

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....nts submitted by the Appellant before the Principal Commissioner as well as the Deputy Commissioner Rs. 5,10,250/- 4. The Principal Commissioner ought to have noted that the Petitioner is only engaged in growing and selling coffee in its raw form as opposed to growing, curing, roasting or grounding and selling the coffee as per Rule 7B (1) of the Income Tax Rules. Rs. 5,10,250/- 5. The Principal Commissioner ought to have noted that the issue of agricultural income has been considered through earlier proceedings for assessment years in the past in favour of the Appellant and as such in the absence of change in any fundamental aspect, the revenue cannot change their opinion either. Rs. 5,10,250/- 6. The Principal C....

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....dicial to the interest of revenue. Counsel for the assessee further referred to page 7 of the paper book and contended that in previous years also the claim of the assessee has been accepted by the AO without referring to the provisions of Rule 7B of the IT Rules. He placed reliance on the judgment of Hon'ble Apex Court in the case of Radha Sawami Satsang reported in 193 ITR 321(SC). 5. Ld. D.R. appearing on behalf of revenue argued that principle of res judicata are not applicable to the income tax proceedings and each year is to be examined, having regard to the facts involved therein. Further, ld. D.R. relied upon the order of ld. PCIT. 6. We have heard the rival submissions and perused the materials available on record. Perusal of....