2020 (7) TMI 782 - AT - Income Tax

Order under section 143(3) - selection of assessee s return for the relevant year for scrutiny u/s. 143(3) - HELD THAT - The selection of assessee s return for the relevant year for scrutiny u/s. 143(3) of the Act was in compliance of the procedure laid down by CBDT for selection of cases for scrutiny for non-corporate assessees for f.y. 2006-07, and, thus, the assessment u/s. 143(3) dated 31.12.2007, which is the subject matter of the instant appeal, could not be impugned on that score. In this, he agreed with the ld. AM. The assessment returned by the assessee as agricultural income, was assessable as such, and its assessment as income from other sources, in whole or in part, could not be sustained in law, i.e., in the facts and circumstances of the case, including the explanations furnished, and on the basis of material on record. In this, he agreed with the ld. JM. The matter was accordingly listed for today instant, to dispose the appeal in accordance with the majority view after hearing the parties, who did not express any objection thereto. No other issue survives for adjudication in the instant appeal. The appeal is accordingly decided on the aforesaid terms. In the result, the assesse s appeal is partly allowed.

Summary

Issues involved:
1. Selection of assessee's return for scrutiny under section 143(3) of the Income Tax Act, 1961.
2. Assessment of agricultural income as income from other sources.

Issue No.1: Selection of assessee's return for scrutiny under section 143(3) of the Income Tax Act, 1961:
The appeal arose from an order by the Commissioner of Income Tax (Appeals) dismissing the assessee's appeal contesting the order under section 143(3) of the Income Tax Act, 1961 for assessment year 2005-06. Due to a difference of opinion between the two members of the Division Bench, the matter was referred to a third Member by the Hon'ble President, Tribunal, under section 255(4) of the Act. The Third Member delineated that the selection of the assessee's return for scrutiny was in compliance with the procedure laid down by CBDT for non-corporate assessees for the relevant year. The assessment under section 143(3) dated 31.12.2007 was upheld on this ground, concurring with the ld. AM's view.

Issue No.2: Assessment of agricultural income as income from other sources:
The assessment of ?65,10,591/-, declared by the assessee as agricultural income, was the subject of contention. The Third Member concluded that the said amount should be assessed as agricultural income and not as income from other sources, wholly or partially. This decision was based on the facts and circumstances of the case, including explanations provided and the material on record, aligning with the view of the ld. JM. Consequently, the appeal was partly allowed, and no other issues remained for adjudication in the instant appeal.

In conclusion, the Appellate Tribunal ITAT Jabalpur, in its judgment dated July 20, 2020, addressed the issues of selection of the assessee's return for scrutiny under section 143(3) of the Income Tax Act, 1961 and the assessment of agricultural income as income from other sources. The Tribunal upheld the assessment under section 143(3) while directing the assessment of the declared agricultural income as such. The appeal was partly allowed based on the majority view, and no further issues were left for consideration in the case.