TaxTMI 
TaxTMI 
2025 (3) TMI 2170
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....he following grounds of appeal: 1. On the facts and in the circumstances of the case, Ld. Pr. CIT erred in declaring the assessment order framed by the Ld. AO u/s 143(3) as erroneous in so far as it is prejudicial to the interest of revenue for invoking the provisions of section 263 of I.T. Act, 1961 without providing a fare opportunity of being heard to the assessee as in the show cause notice no specific deficiency in the enquiry made by Ld. AO has been identified and only vague allegation that claim of agricultural income of Rs. 58,17,777/- has not been verified properly was made. Order so framed may kindly be declared as void ab initio as contrary to the statutory provision. 2. On the facts and in the circumstances of the case, Ld. Pr. CIT erred in invoking the provisions of section 263 of Income Tax Act, 1961 without providing fare opportunity of being heard to appellant even though it was specifically submitted in response to show cause notice that "In case your good self has identified any specific mistake or deficiency in the efforts of Ld. AO, it is respectfully requested to communicate same so that specific submission on that point can be made. In absenc....
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....n 20.04.2021 determining the assessee's total income at Rs. 1,25,68,514/- by making an addition on account of disallowance of agriculture income of Rs. 58,79,649/-. 4.1 The assessment order for the year under consideration was picked up for proceedings u/s. 263 of the Act by the PCIT-1, Jodhpur and a show cause notice was issued as under :- "On perusal of the assessment record it was found that the addition on account of disallowance of agriculture income of Rs. 58,79,649/- should have been treated as unexplained money u/s 69A of the IT Act & to be taxed at special rate u/s 115BBE of the IT Act, 1961. However, the same has been added as income from other sources, it was not taxed at special tax rate u/s 69A r.w.s 115BBE of the IT Act which resulted in under charge of tax and interest having total tax effect of Rs. 31,38,311/-." On examination of assessment record, the Id. PCIT found that the addition on account of disallowance of agriculture income of Rs. 58,79,649/- should have been treated as unexplained money u/s 69A of the IT Act and to be taxed at special rate u/s 115BBE of the IT Act, 1961. 4.2 The Id. PCIT-1, Jodhpur, who having not satisfied with the a....
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....urnished during th assessment proceedings regarding his claim of agricultural income of Rs. 58,79,649/-. Accordingly, the AO made the addition of Rs. 58,79,649/- on account of disallowance of agriculture income in the assessment order passed u/s 143(3) on 20-04-2021. 8. . From the record, it is evident that the assessee has challenged this assessment on legal grounds as well as on merits before first appellate authority which is stated to be pending on the date of proposed revision. Meanwhile, the Id. PCIT-1, Jodhpur passed revision order u/s. 263 directing the AO to apply correct sections. 9. On perusal of Form 35 and grounds of appeal, it is seen that the assessee has challenged the merits of addition of Rs. 58,76,649/- made by way of treating agricultural income as "income from other sources" before the first appellate authority. Therefore the order passed by Ld. AO, in our considered opinion, could not be subjected to revision u/s 263 of the Act because the assessee's case, in such a situation, would be covered under Clause (c) of Explanation-1 to Sec. 263 which puts a bar on initiation of revision u/s 263 when an appeal is pending before Ld. CIT(A). Even otherwise al....
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....xercise of jurisdiction under Section 263 of the Act, the twin tests are to be satisfied and even assuming, the re-assessment order is to be held as erroneous, it cannot be stated to be prejudicial to the interest of Revenue as every erroneous order cannot be subject matter of Revision under Section 263 of the Act. Furthermore, if the order passed by the Commissioner under Section 263 of the Act as confirmed by the Tribunal is allowed to stand, then the very purpose of the remand order against the original re-assessment proceedings would become a fait accompli. 25. Thus, for the above reasons we are fully satisfied that the assumption of jurisdiction by the Commissioner under Section 263 of the Act was wholly without jurisdiction as the twin tests have not been satisfied and consequently, the order dated 14.03.2012 as confirmed by the Tribunal by order dated 13.07.2012 calls for interference. 26. In the result, the appeal filed by the assessee is allowed and the order passed by the Commissioner dated 14.03.2012, under Section 263 of the Act as confirmed by the Tribunal by order dated 13.07.2012 are set aside, and it is left open to the assessee to pursue her claim....