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Income Tax Appellate Tribunal, ‘’ D’’ BENCH, AHMEDABAD
Before: SHRI WASEEM AHMED
आदेश/O R D E R
PER WASEEM AHMED ACCOUNTANT MEMBER:
The captioned appeal has been filed at the instance of the Assessee against the order of the Learned Principal Commissioner of Income Tax, Ahmedabad-1, (in short “Ld. PCIT”) arising in the matter of revisional order passed under s. 263 of the Income Tax Act 1961 (here-in-after referred to as "the Act") relevant to the Assessment Year 2018-19.
The assessee has raised following grounds of appeal:
“1. The ld. Pr. CIT erred in passing the order u/s 263 of the Income Tax Act, 1961 by holding that the assessment order passed by the Additional/Joint/Deputy/Assistant Commissioner of Income Tax National e-Assessment Centre, Delhi u/s 143(3) r.w.s. 143(3A) & 143(3B) of the Act dated 27/02/2021 is erroneous and prejudicial to the interest of the revenue.
2. The ld. Pr. CIT grossly erred in facts and circumstances of the act in setting-aside the order merely on the basis of change of opinion regarding the order passed by the assessing officer. Further the Id. Pr. CIT erred in not considering the fact that the order was passed by the assessing officer after conducting due enquiry and after due application of mind.
The ld. Pr. CIT failed to appreciate the fact that the assessment order was passed after due consideration of all the necessary materials furnished by the assessee and thus the said order was neither erroneous nor prejudicial to the interest of the revenue.
4. The appellant craves the permission to add, amend, modify, alter, revise, substitute, delete any or all grounds of the appeal, if deemed necessary at the time of hearing of the appeal.”
3. The only issue raised by the assessee is that the ld. PCIT erred in holding the assessment framed under section 143(3) of the Act as erroneous insofar prejudicial to the interest of revenue under section 263 of the Act.
The necessary facts are that the assessee in the present case is an individual and draws income under the head salary, business, and other sources including agricultural Income. The assessee in the year under consideration has declared an income of Rs. 29,87,600/- which was accepted in the assessment framed by the AO under section 143(3) of the Act vide order dated 27-02-2021. In the assessment order, the income declared by the assessee under the head exempted agricultural income amounting to Rs. 64,00780/- was also accepted by the AO.
However, the learned PCIT on examination of the assessment records found that the enquiry has not been conducted by the AO properly during the assessment proceedings with respect to the exempted agricultural income of Rs. 64,00,780/- only. As such, the claim of the assessee that there was an oral agreement with the parties who were engaged in cultivating the agricultural produce in the land owned by the assessee has been accepted by the AO without verification. The relevant extract of the finding of the learned PCIT is reproduced as under:
“2 On perusal of the case records, it is noticed that the assessee had claimed exempted agricultural income of Rs.64,00,780/-. Further during the assessment proceedings, the assessing officer issued an SCN dated 23.11.2019 to the assessee and specifically asked to furnish documentary evidences of agricultural income for the relevant assessment year along with details of expenses incurred on the said agricultural income. The assessee was asked to submit the sales bills, extract of 7/12 and 8A of the agriculture land. However in response to the said notice, the assessee replied that it was mutually agreed upon between the assessee and two other agriculturists namely 1) Mukeshbhai Patel and 2) Chatrasingh Vaghela, that these two agriculturists would produce agriculture products on the land owned by the assessee and then sell these products to the vendor selected by the assessee. During the year under consideration, the assessee submitted that the above two agriculturists sold the agricultural products and retained their income while the vendor issued cheques in the name of the assessee for his share of income. However, the assessee did not furnish any documentary evidence with reference to the alleged agreement done with the said agriculturalists for agri production and/ or to bear all the expenditure incurred to produce the agri products. xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx xxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxxx 5. Considering the above facts and legal position, it is evident that in this case, proper enquiry/ verification was not made by the AO with respect to agricultural income of the assessee and expenditure to claim the same. Thus it is not established beyond doubt that assessee has actually earned agricultural income & how much expenses incurred towards the same. If any expense incurred then source of the said expenditure to be examined. I, therefore, hold that the assessment order dated 27.02.2021 passed by the Assessing Officer u/s 143(3) r.w.s 143(3A) & 143(3B) of the Act is erroneous and prejudicial to the interests of revenue within the meaning of section 263 of the Income-tax Act, 1961 and hence, the said order is hereby set aside.
6. Accordingly, the A.O. is directed to make a fresh assessment after allowing adequate opportunity of being heard to the assessee, in accordance with the law following prescribed procedure and duly examining the aforementioned issues in the light of the above discussion.”
Being aggrieved by the order of the learned PCIT, the assessee is in appeal before us. The learned DR before us vehemently supported the order of the ld. PCIT.
We have heard the learned DR and perused the materials available on record. At the outset we note that the matter was listed for hearing on several occasions but there was no response from the side of the assessee. Accordingly, in the absence of any co-operation from the side of the assessee and taking note of the fact that learned PCIT has passed detailed and speaking order with the reasons for holding the assessment order as erroneous insofar prejudicial to the interest of revenue, we do not find any reason to interfere in the finding of the learned PCIT. Accordingly, the ground of appeal filed by the assessee is hereby dismissed.
In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the Court on 10/04/2024 at Ahmedabad.