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2023 (10) TMI 1054 - AT - Income Tax


Issues involved:
The issues involved in this case are u/s 263 order legality, nature and distance of agricultural land, validity of Tehsildar's certificate, proper opportunity for hearing, and assessment of agricultural income.

Issue 1: u/s 263 order legality
The appeal challenged the order u/s 263 as illegal, bad in law, and time-barred, contending that the AO had conducted a thorough enquiry into the nature and distance of the agricultural land during the assessment.

Issue 2: Nature and distance of agricultural land
The assessee claimed that the land sold was agricultural and situated beyond 8 km from the municipal limit, supported by a certificate from the Tehsildar. The AO accepted the land as agricultural, exempting the capital gain and sale of mud as agricultural income.

Issue 3: Validity of Tehsildar's certificate
The ld. PCIT raised concerns about the validity of the Tehsildar's certificate, noting that a note to the Tehsildar cannot be equated to a certificate. An internet search suggested the village was closer to the municipal limit than claimed. However, the Tribunal found the AO's view plausible and set aside the PCIT's order.

Issue 4: Proper opportunity for hearing
The appeal contended that the order u/s 263 was passed without giving the assessee a proper opportunity for a hearing, emphasizing the importance of due process in such matters.

Issue 5: Assessment of agricultural income
The Tribunal ultimately decided in favor of the assessee, ruling that the AO had conducted necessary enquiries and taken a plausible view that the land in question was agricultural. Consequently, the order of the PCIT was set aside, and the appeal of the assessee was allowed.

This judgment highlights the importance of proper assessment procedures, the validity of supporting documents like certificates from authorities, and the need for thorough enquiries into the nature of assets in tax assessments.

 

 

 

 

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