9911796707
TMI Blog2023 (1) TMI 210X X X X Extracts X X X X X X X X Extracts X X X X ..... the case, in brief, are that the assessee is an individual and is associated with M/s. Lara Drugs (P) Ltd, Hyderabad and getting remuneration from the said company. He filed his return of income on 30.09.2016 declaring total income at Rs.4,16,400/-. The case was selected for "limited scrutiny" under CASS guidelines. Accordingly, statutory notices u/s 143(2) of the I.T. Act were issued and served on the assessee in response to which the A.R of the assessee appeared before the Assessing Officer from time to time and submitted requisite clarification/details as called for. After examining the information/clarifications, the Assessing Officer completed the assessment u/s 143(3) on 19.12.2017 accepting the returned income of Rs.4,16,400/-. 4. Subsequently, the learned PCIT called for the records and on examination of the same noticed that the assessee owns 24.80 Acres of agricultural land in West Godavari District of Andhra Pradesh. In support of his claim the assessee produced Pattadar Passbook and receipts of agricultural crops. In the computation of income statement, the assessee has shown that the agricultural income was earned on cultivation of 28 Acres. However, as per the Pattad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t is also noticed that you were in the ownership of land to the extent of 24.30 Acres of agricultural land in West Godavari District of Andhra Pradesh. During the assessment proceedings, you have produced Pattadar Passbook and receipts of agricultural crops in support of your claim. In the computation of income statement, you have shown that the agricultural income was earned on cultivation of 28 Acres. However, as per the Pattadar Passbook, the extent of agricultural land is 24 Acres 80 Cents only. The AO has verified with the local revenue authorities and the Tahsildar certified that the extent of assessee s agricultural land is 11 Acres 80 Cents. It was also certified that the annual income that can be derived from said extent of land is Rs. 5,00,000/- only. Thus, even if it is agreed that you have cultivated Ac 24.80 cts of land, you should have earned Rs. 10,00,000/-approximately. Further, during the assessment proceedings, you have stated that you have earned RS. 20,01,360/- as a paddy canvassing agent. In reply to show cause letter of the Assessing Officer, you have submitted that you have cultivated various crops such as Mirchi, Mango, Tobacco, Sweet corn along with padd ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... rther explained that no agricultural land was sold during the year under consideration. 7.1 However, in absence of any material evidence to reconcile the discrepancy of the agricultural land holding or to show that some agricultural land have been converted into horticultural land, the learned PCIT rejected the various explanations given by the assessee and set aside the order of the Assessing Officer with a direction to redo the assessment after examining the issues as discussed. The relevant observation of the PCIT while setting aside the order u/s 263 reads as under: "1 I have gone through the assessment order, records and submission made by assessee during revision proceedings u/s 263 of the Income Tax Act. The submissions made by assessee are not acceptable for the following reasons: i. The assessee in his reply dated 26-03-2019 before the undersigned stated that to the extent of 14.08 acres in the name of the joint family as per Partition deed was not updated in the online Revenue records. However, the same assessee in his reply to the show cause notice before the Assessing Officer, the Income Tax Officer, Ward - 11(5), Hyderabad stated that in the FY 2015-16 some agric ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er to collect and appreciate the facts collected and proper application of law is to be made while making the assessment. The Assessing Officer should have investigated the aspect of area of land independently by physic verification and should have arrived at the agricultural income based on evidence. 11. In the interest of justice and since the twin conditions, namely, (i) the order of the Assessing Officer sought to be revised is erroneous: and (ii) it is prejudicial to the interests of the Revenue, are satisfied, the assessment order passed u/s 143(3) of the Income Tax 1961 on 19-12-2017 needs to be set aside. 12. In view of the above discussion, assessment order u/s 143(3) of the Income Tax 1961 dated 19-12-2017 for the AY 2015-16 in the case of the assessee-company is set aside to redo the assessment after examining the issues as discussed above and after allowing opportunity of being heard to the assessee." 8. Aggrieved with such order of the learned Pr. CIT the assessee is in appeal before the Tribunal. 9. The learned Counsel for the assessee at the outset drew the attention of the Bench to the office note, that was inadvertently supplied to the assessee along with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... allowed. 15. The learned DR, on the other hand, heavily supported the order of the learned PCIT. He submitted that for assuming jurisdiction u/s 263 of the I.T. Act, the twin conditions namely the order is erroneous and the order is prejudicial to the interest of the Revenue and the order is erroneous must be satisfied. In the instant case the order is erroneous as well as prejudicial to the interest of the Revenue since the Assessing Officer has not properly verified the landholding details of the assessee despite being aware that the details of the land holding shown by the assessee and the details given by the Tehsildar are different and are not matching. He submitted that the various decisions cited by the learned Counsel for the assessee are not applicable to the facts of the present case and are distinguishable. He accordingly submitted that the order of the learned PCIT should be upheld and the grounds raised by the assessee should be dismissed. 16. We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned PCIT and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by bo ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... estimation of the agricultural income. It is the settled proposition of law that for assuming jurisdiction u/s 263 of the I.T. Act, the twin conditions namely (a) order is erroneous and (b) order is prejudicial to the interest of the Revenue must be satisfied. In the instant case, the office note of the Assessing Officer clearly shows that he has accepted the agricultural income declared by the assessee after due verification and due application of mind and therefore, it cannot be said that the order passed by the Assessing Officer is erroneous. Therefore, even if the order is prejudicial to the interest of the Revenue, however, the other condition that the order is erroneous is absent. Therefore, the learned PCIT, in our opinion, is not justified in assuming jurisdiction u/s 263 of the I.T. Act. Further, it has been held in various decisions that merely because the learned PCIT does not agree with the view taken by the Assessing Officer, he cannot assume jurisdiction u/s 263 of the I.T. Act or thrust upon his view as against the view taken by the Assessing Officer unless the view taken by the Assessing Officer is perverse one or not a possible view. However, as mentioned earlier, ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
