2004 (7) TMI 27 - ALLAHABAD HIGH COURT - Income Tax

Head Note / Extract:
Order erroneous or prejudicial to the interests of the Revenue - CIT initiated proceedings u/s 263 on the ground that in making the assessment the ITO did not make any enquiry as regards the nature, source or extent of income derived from agriculture and poultry-farming or investment from which these incomes arose. Further, the Income-tax Officer also did not take any steps to verify whether the income from these sources as claimed was fully exempt – Income-tax Officer has granted exemption to the assessee without any discussion and without any application of mind - Thus, an order, which has been passed without application of mind, will also fall under the expression erroneous and prejudicial to the interests of the Revenue – Thus, Tribunal had committed error in holding that the assessment order in so far as it granted exemption to income from agriculture and poultry-farming was not erroneous or prejudicial to the interests of the Revenue