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Income Tax Appellate Tribunal, PUNE BENCH “B”, PUNE
Before: SHRI INTURI RAMA RAO & SHRI S. S. VISWANETHRA RAVI
IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH “B”, PUNE BEFORE SHRI INTURI RAMA RAO, ACCOUNTANT MEMBER AND SHRI S. S. VISWANETHRA RAVI, JUDICIAL MEMBER आयकर अपील सं. / ITA No.217/PUN/2019 िनधा�रण वष� / Assessment Year: 2014-15 Vilas Kedu Birari, Vs. Pr. CIT- 1, Nashik. Sanskruti, Murkute Colony, Near Pandit Colony, Gangapur Road, Nashik- 422002. PAN : AFBPB1178E Appellant Respondent Assessee by : Shri Dhiraj Dandgaval Revenue by : Shri Navin Gupta Date of hearing : 29.04.2022 Date of pronouncement : 11.05.2022 आदेश / ORDER PER INTURI RAMA RAO, AM: This is an appeal filed by the assessee directed against the order of ld. Pr. Commissioner of Income Tax - 1, Nashik (‘PCIT’) dated 04.09.2018 passed u/s 263 of the Income Tax Act, 1961 (‘the Act’) for the assessment year 2014-15. 2. At the outset, there is a delay of 89 days in filing the present appeal. The appellant has filed an affidavit dated 04.02.2019 stating that the appellant was suffering from failure of both the kidneys and
2 ITA No.217/PUN/2019 underwent kidney transplant. As a result, he could not take steps to file the appeal within due date. The averments made in the affidavit were not controverted by the ld. Sr. DR. Considering the averments made in the affidavit, we are of the considered opinion that the appellant is prevented by sufficient and reasonable cause in filing the appeal within due date and hence, we condone the delay of 89 days and admit the appeal for adjudication. 3. The appellant raised the following grounds of appeal :- “1. On the facts and in the circumstances of the case the Principal Commissioner of Income Tax -1, Nashik, erred in initiating the proceedings u/s 263 of the Income Tax Act, 1961. 2. On the facts and in the circumstances of the case the Pr. CIT -1, Nashik, is not justified in stating that Assessment Order is erroneous and prejudicial to the interest of the revenue. 3. On the facts and in the circumstances of the case the Pr. CIT -1, Nashik, has erred in initiating proceedings based on an irrelevant data from publication of agricultural ministry of Government of India. 4. On the facts and in the circumstance of the case the Pr. CIT -1, Nashik, erred in cancelling the original order and directing the AO to start the Assessment Proceedings afresh. 5. The above grounds of appeal may kindly be allowed to be added, amended, altered, modified and or deleted in the interest of natural justice.” 4. Briefly, the facts of the case are as under : The appellant is an individual deriving income under the head salary, house property and income from agriculture. The appellant was filed the return of income for the assessment year 2014-15 on 02.01.2015 declaring total income of Rs.3,22,59,240/-. Against the said return of income, the assessment was completed by the
3 ITA No.217/PUN/2019 Assistant Commissioner of Income Tax, Circle- 1, Nashik (‘the Assessing Officer’) vide order dated 14.12.2016 at a total income of Rs.3,30,46,070/-. While determining the quantum of agricultural income, the Assessing Officer had estimated 35% of the gross receipts of maize sale proceeds as an expense. As a result, the Assessing Officer made an addition of Rs.7,86,830/-. 5. Subsequently, on examination of the assessment record, the ld. PCIT formed an opinion that while estimating the cost of cultivation the Assessing Officer had not made any enquiry as to the cost of the cultivation of maize, crop and merely made disallowance on ad-hoc basis. According to the ld. PCIT, as per the Govt. of India’s publication “Agricultural statistics at glance 2016”, the minimum cost of product of maize for the financial year 2013-14 is Rs.1026 per qntl. as against the estimate made by the Assessing Officer at Rs.397.46 per qntl.. As result of this, the Assessing Officer had allowed excess cost of production of Rs.27,36,011/-. Despite several opportunities provided by ld. PCIT, the appellant had chosen not to represent before the ld. PCIT. In the circumstances, the ld. PCIT set-aside the assessment order by holding that the Assessing Officer had not caused any enquiry on the cost of production and, accordingly, set-aside the assessment
4 ITA No.217/PUN/2019 with a direction to frame the assessment de-novo after affording opportunity of being heard to the assessee. 6. Being aggrieved by the order of revision passed by the ld. PCIT u/s 263, the appellant is in appeal before us with the above extracted grounds of appeal. 7. The ld. AR for the assessee submits that the Assessing Officer caused the necessary enquiries as regards to the cost of production of maize, crop during the financial year 2013-14. The fact that the Assessing Officer made an ad-hoc disallowance goes to prove that the Assessing Officer had examined the cost of production and, therefore, the ld. PCIT is not justified in exercising the power of revision u/s 263 of the Act. 8. On the other hand, ld. Sr. DR submits that the appellant had not availed the opportunity of hearing granted to him by the ld. PCIT and the Assessing Officer had not caused the necessary enquiries as to the cost of production of maize, crops and merely made an ad-hoc disallowance. Since the assessee had not availed the opportunity of hearing granted to him, the order of revision be upheld. 9. We heard the rival submissions and perused the material on record. The issue in the present appeal relates to the validity of assumption of jurisdiction u/s 263 by the ld. PCIT. The Parliament
5 ITA No.217/PUN/2019 had conferred the power of revision on the Commissioner of Income Tax u/s 263 of the Act in case the assessment order passed is erroneous and prejudicial to the interests of revenue. In order to invoke the power of revision, the above two conditions are required to be satisfied cumulatively. References in this regard can be made to the decision of the Hon’ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT, 243 ITR 83 (SC) and in the case of CIT vs. Max India Ltd., 295 ITR 282 (SC). The error in the assessment order should be one that it is not debatable or plausible view. In a case where the Assessing Officer examined the claim took one of the plausible views, the assessment order cannot be termed as an “erroneous”. In the present case, there is nothing on record to indicate that the Assessing Officer had caused necessary enquiries as to the cost of production of maize, crop during the financial year 2013-14. However, the Assessing Officer had chosen to make ad-hoc disallowance which does not really supported by any material. Further, since the assessee had not availed the opportunity of hearing granted to him by the ld. PCIT, the ld. PCIT was justified in setting aside the assessment for de-novo assessment. Therefore, we do not find any reason to interfere with the order of the ld. PCIT passed u/s 263 of the Act. Accordingly, the grounds of appeal raised by the assessee stands dismissed.
6 ITA No.217/PUN/2019 10. In the result, the appeal filed by the assessee stands dismissed. Order pronounced on this 11th day of May, 2022. Sd/- Sd/- (S. S. VISWANETHRA RAVI) (INTURI RAMA RAO) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; �दनांक / Dated : 11th May, 2022. Sujeet आदेश क� �ितिलिप अ�ेिषत / Copy of the Order forwarded to : अपीलाथ� / The Appellant. 1. ��यथ� / The Respondent. 2. 3. The Pr. CIT-1, Nashik. िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, “B” ब�च, 4. पुणे / DR, ITAT, “B” Bench, Pune. गाड� फ़ाइल / Guard File. 5. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune.