TaxTMI 
TaxTMI 
2026 (6) TMI 659
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..... Assessee has raised the following grounds of appeal: 1. Whether the Ld PCIT is correct in law and on facts in invoking section 263 by holding that the assessment order being erroneous and prejudicial to the interest of revenue more particularly when the assessee is purely an agriculturist having no other source of income other than agriculture income and the Ld AO has also not observed that assessee having been engaged in any other activity in his assessment order from the bank statement and other documents submitted before him during the course of assessment. 2. Whether the Ld PCIT is correct in law and on facts in passing the revisionary order u/s. 263 inspite of all the sale bills of agricultural receipts, bills of agricultural expenses and explanations submitted before him. 3. Whether the Ld PCIT is correct in law and on facts in passing the revision order u/s. 263 on the basis of mere assumptions and presumptions and bypassing the evidences of agricultural income and affidavit of Karta available on record more particularly when no defect is found/observed by him in the evidences submitted by assessee before him. 4. Whether the Ld PCIT is c....
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....e received from the assessee, the gross receipts are treated as income from unknown sources and the exemption u/s. 10(1) was withdrawn and the amount of Rs. 25,10,140/- has been treated as unexplained money u/s. 69A of the Act and added the same to the total income of the assessee. 6. On examination of assessment order, Ld.PCIT found that despite there being no documentary evidence for agricultural operations has been produced by the assessee, Faceless Assessing Officer (FAO) failed to verify/enquire about gross agricultural income and the agricultural expenditure claimed by the assessee. He was considered that prima facie there was a case of the assessment in this case being erroneous insofar as it is prejudicial to the interests of the Revenue. Accordingly, notice u/s. 263 of the Act dated 28.10.2024 was issued to show-cause as to why the provisions of section 263 should not be invoked to revise the order dated 19.12.2022 passed u/s. 143(3) r.w.s. 144B of the Act. In response to the notice issued u/s. 263, assessee submitted that "assessee is purely agriculturist. He is not supposed to maintain the regular books of accounts, vouchers, bills etc. he is also not liable to file r....
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....ssessee failed to explain the source of the money. This is to be taxed as income from other sources at the rates prescribed in the provisions u/s 115BBE of the Act. Finally, Ld. PCIT held that the assessment order passed u/s 143(3) r.w.s. 144B dated 29.12.2022 was erroneous insofar as it was prejudicial to the interests of the Revenue within the meaning of Explanation 2 to section 263 of the Act. Accordingly, he set aside the assessment order for the limited purpose of verification of agricultural income and directed the Jurisdictional Assessing Officer (JAO) to pass a fresh order in accordance with law. 8. Aggrieved by the order of Ld. PCIT, assessee is in appeal before this Tribunal. Learned counsel for the assessee submitted that the order passed by the Ld. PCIT u/s 263 is bad in law and liable to be quashed since the assessment order passed u/s 143(3) r.w.s. 144B dated 19.12.2022 is neither erroneous nor prejudicial to the interests of the Revenue. The case of the assessee was specifically selected for scrutiny for verification of genuineness of agricultural income. During the course of assessment proceedings, assessee furnished details from time to time. Thus, the issue ....
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....ding and agricultural sale bills, the provisions of section 69A are wholly inapplicable. The Ld. PCIT proceeded merely on assumptions and presumptions that the agricultural income declared was excessive. Even assuming without admitting that the agricultural income claimed was on higher side, at best an estimation or partial disallowance could have been considered. Entire agricultural receipts cannot be converted into unexplained income taxable u/s 115BBE. Therefore, he prayed that revisional order passed by the Ld. PCIT deserves to be quashed and the assessment order passed by the AO be restored. 9. Ld. Departmental Representative (DR) submitted that the assessment order passed by the FAO is erroneous insofar as it is prejudicial to the interests of the Revenue because no meaningful enquiry was conducted regarding genuineness of huge agricultural income of Rs. 25,10,140/- claimed exempt u/s 10(1). Despite issuance of notices, assessee failed to furnish complete documentary evidence before the AO regarding agricultural operations, crop details, expenditure incurred, sale proceeds and yield. The AO without conducting proper verification mechanically accepted part claim and made ad....
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....substantiated agricultural income at Rs. 3,99,913/- and treated balance receipts as unexplained income taxable u/s 115BBE. In our considered opinion, the assumption of jurisdiction u/s 263 in the facts of the present case is unsustainable. The prerequisite for invoking section 263 is that the assessment order should be both erroneous and prejudicial to the interests of Revenue. Mere inadequacy of enquiry or difference of opinion cannot confer revisional jurisdiction upon the Ld. PCIT. Once the AO has examined the issue during scrutiny proceedings and taken a conscious view, which is maintainable and legally plausible, the Ld. PCIT cannot invoke section 263 merely because according to him further or deeper enquiry ought to have been conducted. We further find merit in the contention of the assessee that provisions of section 69A were not at all applicable in the facts of the case. For invoking section 69A, there must be finding that the assessee was found to be owner of unexplained money, bullion, jewellery or valuable article not recorded in the books of account. In the present case, there is no such finding either by the AO or by the Ld. PCIT. The agricultural receipts were dul....