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TMI Blog2025 (3) TMI 209X X X X Extracts X X X X X X X X Extracts X X X X ..... een returned by the assessee. The Ld. PCIT therefore has erred in law as in cash flow the result is NIL. In the premises after examining the record, papers and proceedings of the impugned order as well as the original assessment order dt. 03/06/2019 passed under section 143(3) r.w.s 147/148 we are of the considered view that there is no legal infirmities in the order of Ld. AO dt. 03/06/2019. We hold that due process of law with all rigorous were duly followed by the Ld. AO; appropriate notice(s) u/s 147/148, 143(2) and 142(1) were duly given and were received by the assessee. The return of income was filed as an agriculturist on 25/04/2019 declaring net income as agriculture income. Detailed questionnaire were issued on 01/05/2019 for 15.05.2019 which were properly replied to by the assessee. Assessee attended the assessment proceedings and it is recorded that AR furnished all requisite information / documents called for during the course of assessment proceedings the Ld. AR furnished detailed reply alongwith documentary evidences of cash deposited in bank during the period under consideration which were duly examined and were placed on record. Further upon many queries raised ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... itals and so also at the residences of his three daughters on various multiple occasions. That the assessee had received certain notices for A.Y 2012-13 and that for the purposes of the assessment proceedings, had engaged Shri Rohit Vashishat Advocate from Ludhiana, Punjab for representing his case before Ld. AO, ward II (4) Ropar. That later on he came to know in first week of September 2023 that certain notices have been sent by Ld. PCIT, Chandigarh -1 in March 2022 and certain order under section 263 was passed by the Ld. PCIT, Chandigarh -1 and that all such notices were found to be sent on the email of earlier counsel Shri Rohit Vashishat, Advocate and that it could not be brought to assessee's notice as the concerned counsel had no contact number of his and neither there was any occasion to visit the concerned counsel and as such, the said notices and order under section 263 dt. 22/03/2022 did not come to his knowledge. 2.1 It is further contended that the proceedings in respect of "consequential order" pursuant to order under section 263 which were taken up in January 2023 and the order was passed in March 2023 came to his notice later on as the same were sent to email of p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... after meeting agricultural expenses, balance amount of cash is deposited in the bank account of the assessee. 6. A notice u/s 148 of the Act was issued to the assessee on 07.03.2019 on the basis of an information that the assessee had deposited cash amounting to Rs. 32,41,000/- in his bank account during the year under consideration. In response to the said notice, the assessee filed a return u/s 148 of the Act declaring an income of Rs. 6,710/- and an agricultural income of Rs. 7,80,000/- on 25.04.019. The copy of return filed by the assessee in response to notice issued u/s 148 of the Act is forming part of paper book at Pg 1-2. 7. Thereafter, during the course of assessment proceedings, it was explained before the AO that the reasons recorded for reopening of the case were incorrect as the assessee had deposited cash of only Rs. 16,91,000/- in the Punjab National Bank and such cash deposit was also explained via filing of various replies along with necessary evidences that such cash deposit is out of agricultural activities only. The copies of these replies are forming part of paper book at Pg 5-26 and 27-42. 8. Thereafter, the assessment order dated 03.06.2019 was passed u/s ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e Income Tax Officer, Ward-II(4), Ropar vide order, dated 3.6.2019 was with due to application of mind on the basis of various documents/submissions filed by the assessee and, thus, the assumption of jurisdiction by the Ld. PCIT, Chadigarh -1 is bad in law. 3. That the Order has been passed against the facts and circumstances of the case. 4. That the appellant craves lead to add or amend the grounds of appeal before the appeal is finally heard or disposed off. Record of Hearing 12. The hearing in the matter took place on 27/08/2024 when both the parties appeared before us and were heard on their respective submissions. The Ld. AR contended that Ld. PCIT has erred in law in passing the impugned order u/s 263 of the Income Tax Act, 1961 as the original assessment order dt. 03/06/2019 of Ld. AO i.e ITO Ward-2(4), Ropar passed in terms of section 143(3) r.w.s 147 of the Income Tax Act, is not erroneous and that same is also not prejudicial to the interest of Revenue. It is contended that the original assessment order dt. 03/06/2019 of Ld. AO which is a subject matter of proceedings under section 263 of Act, was with due application of mind on basis of various documents / submissi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Naib Tehsildaar, Morinda (Pg 16) H. Copy of Girdawri of the landholding of the assessee depicting agricultural operations conducted on the said land (Pg 17-22) I. Copy of agreement to sell dated 01.06.2011 for an amount of Rs. 4,50,000 along with its cancellation on the back side and copy of Jamabandi of the said land (Pg 23-26) Note: (We have noted the letter of the Ld. AO which is on page 4 of paper and first reply of assessee on pages 5 to 7 of paper book. 12.2 The Ld. AR after placing reliance on first reply during the course of the original assessment proceedings in response to notice of Ld. AO wherein all material details like bank account statement of assessee for period 01/04/2011 to 31/03/2012; information on income of Rs. 6705/- under head income from other sources, sources of agricultural income of Rs. 7,80,000/-; source of cash deposit of Rs. 32,41,000/- with PNB & the Sale/ purchase of immovable property including sale deed of the agriculture land; then certificate from respective authority that whether the relevant land fall under any MC limit or how much away from MC limit (supra pages 4 to 26 of paper book) next took us through second reply of the assessee w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d. AO and that Ld. AO upon being satisfied has accepted the return in the original assessment proceedings by passing order dt. 03/06/2019 which cannot be called erroneous and prejudicial to the interest of the Revenue under section 263 of the Act. It was further submitted that following documents were filed with second reply before Ld. AO. A. Copy of Bank Account Statement of account number 86020100002809 as maintained with Punjab Gramin Bank for the FY 2010-11 (AY 2011-12) to justify opening cash in hand as on 01.04.2011 (Pg 29) B. Copy of Cash Flow Statement for the period 01.04.2010 to 31.03.2011 for the availability of the opening cash in hand as on 01.04.2011. (Pg 30-31) C. Copy of Sale deed dated 28.06.2010 for an agricultural land sold by the assessee for Rs. 7,00,000 (Pg 32-39) D. Copy of duly sworn notarized affidavits of Assessee Sh. Bhupinder Singh along with his Aadhar card in connection with cash received of Rs. 4,50,000/- for agreement to sell dated 01.06.2011. (Pg 40-42) Note (We have noted and perused above) 12.6 The Ld. AR has placed reliance on order of this Tribunal in case of Exotic Realtors & Developers Vs. PCIT reported in CTR (2024) 38 NYPTT 993(Ch ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n specifically looked into by Assessing Officer and source of deposit was fully enquired into and explanation offered by assessee was considered and accepted, impugned order was to be quashed as revisionary powers could not be permitted to be exercised on suspicions and inferences 12.9 Reliance was further placed on Narain Singh Vs. PCIT reported in (2015) 62 taxmann.com 255 (Chandigarh Tribunal) wherein it has been held that if there was an enquiry, even inadequate that would not by itself, give occasion to Commissioner to pass order u/s 263, merely because he has a different opinion in the matter. 12.10 Reliance was place on following judgement too: "Happy Forgings Ltd. Vs. JCIT as reported in (2015) 58 taxmann.com 65(Chandigarh-Trib) Where Assessing Officer allowed depreciation on forging press after being satisfied with explanation of assessee which was supported by documents, Commissioner was not justified in invoking jurisdiction under section 263. Ved Parkash Contractors Vs. PCIt as reported in (2017) 88 taxmann.com 393 (Chandigarh - Trib) The order of the Assessing Officer may be brief and cryptic but that by itself is not a sufficient reason to brand the assessme ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n'ble Supreme Court in the case of CIT Vs. Amitabhachan, 384 ITR 200. It is pertinent to note that Explanation-2 of section 263(1) would help the Id. Commissioner to take cognizance under section 263 of the Act, if no inquiry was conducted by the AO before finalizing the assessment order. No doubt the assessment orders are very brief, and did not have elaborate discussion on these issues, but it is pertinent to bear in mind that assessees have no control over the AO and cannot persuade him to draft the assessment order in a particular manner. It is the discretion of the AO, how to pass an assessment order. Had an elaborate discussion available, then that would be an ideal situation for the higher appellate authorities to appreciate, what has operated in the mind of the AO while passing the assessment. But in the absence of such discussion, it has to be ascertained from the questionnaire and the replies submitted by the assessee. Explanation-2 can be invoked when no inquiry was conducted by the AO. In the present case, he has issued a questionnaire calling for details on 37 counts. Those details were submitted. Some of the issues raked up by the Id. Commissioner in the impugned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tural land and evidence of agricultural activities carried on by him on such land and it is also evident on record that the agricultural income declared by the assessee commensurate with the land holding of the assessee, it is sufficient enough to prove the genuineness of agricultural income disclosed by the assessee. ❖ Regarding J Form, it is submitted that there is a lag of approximately 10 years between the year of income and year of 263 proceedings and mere non-availability of J Form cannot be a ground for making addition in the hands of the assessee. ❖ Reliance in this regard is placed on the judgment of Sh. Satbir Singh Bhullar Vs. ITO in ITA No. 258/Asr/2022 wherein it has been held that the assessee possess sufficient landholding which is evident from the Jamabandi submitted by him and the agricultural operations were also evident from the Khasra/Girdawri filed by him. Therefore, the agricultural income of the assessee is proved beyond doubts. The copy of the said judgment is forming part of Judgment set at page 1-4. 3. Para 7.1, Page 4 The source of opening cash in hand of Rs. 8,59,800/- claimed by the assessee in cash flow statement remains totally unve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... strong cannot take place of evidence. 12.13 The Ld. AR has also contended that Ld. PCIT in the impugned order has placed reliance on decisions which are not applicable to the facts of the present case. The Ld. AR contends that it is not a case of no inquiry as queries raised were all answered. It is case with application of mind by Ld. AO and not a case of non application of mind. 13. Per contra Ld. DR has relied upon the impugned order of Ld. PCIT in support of case of Revenue. Ld. DR contends that there is a lack of inquiry on part of Ld. AO. It is also a case of inadequate inquiry. The Ld. AO ought to have at least sent a letter to Naib Tehsildar on land issues and crops grown on it. There is no document in support of agriculture income like Mandi Fee, Kacha Adatiya, No Bill, No voucher for agri produce on record. Ld. DR has placed heavy reliance on para 5 of impugned order. Ld. AO ought to have written a letter to Mandi Board too. In which Mandi the Agri Produce was sold is not stated. No letter to rural broker / adatiya to seek evidence of agri produce is on record. No identity of such a person is disclosed by the assessee. The Ikrarnama produced is just a camouflage to cove ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ultivate his Agriculture land. The assessee has no other source of income except from agriculture land / produce. Other sources of Income are from FDR with bank and Saving Bank Account interest. Form 26AS is placed on record. Copy of agricultural income certificate for F.Y. 2011-12 issued by Naib Tehsildar, Morinda (Roopnagar) is too placed on record on page 16 of paper book. It bears all the essentials of a valid certificate issued by a public authority who is a responsible Revenue officials in our considered view. Veracity or otherwise of such an certificate cannot be doubted. A public servant in India issues certificate subject to certain condition precedent which is required to have been presumed to have been discharged by the assessee prior to issue of such a certificate by Naib Tehsildar. Naib Tehsildar do not issue Certificate casually. They issue certificate basis revenue records i.e; basis Girdawari, reports of Block Development Officers, Revenue Inspectors, Patwari's and other Revenue Officials. It is not the case of Revenue u/s 263 that said certificate is bogus or was obtained by playing fraud. What is now contended by Ld. DR is that Tehsildar certificate perse is not a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ib Tehsildar is also accompanied by the copy of Girdawari of land holding of the assessee depicting agriculture operations conducted on the said land page 17-22; copy of Punjab Gramin Bank, statement for F.Y. 10-11 A.Y 2011-12 besides other papers and document. The Ld. AO while carrying out assessment particularly so under the provisions of Section 143(3) r.w.s 147/148 do not carry out assessment of income blindly. The Ld. AO basis replies of assessee and documents accompanying it and during the course of hearing gages and swifts through the material on record. The Ld. AO exercises his discretion carefully and cautiously and upon a slightest suspicion carries out a deeper probe. In the instant case records of the assessment proceedings shows no suspicion basis the documents (supra). Under these circumstances it is far fetched to say that the Ld. AO ought to have made inquiries in respect of documents given by the assessee. Revenue must trust the assessee it is a crucial factor in administration of tax collection. Assessee credentials cannot be doubted at the tip of the nose. There must be a atmosphere of Mutual faith and trust between Revenue and Assessee. It is a very delicate rel ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ny. To say in impugned order and to do it practice by Ld. AO there is a difference. Assessment is a quasi judicial process and not a judicial determination of income. In quasi judicial process unlike judicial process one has to go by some degree of preponderance of probabilities whereas in judicial process degree of proof required is beyond any reasonable doubt. This is a scuttle difference in our considered view. Revenue is required to take a call whether in all such cases enquiries are to be done as a matter of rule or not or to leave it to the wisdom and good sense of AO. In our view later recourse is best option as what is required is fine tunning and balancing Act. Every loss of Revenue cannot be called prejudice to Revenue similarly in every case inquiries are not possible with regard to each and every document produced by the assessee. 15.4 We also hold that to conduct enquiries on agriculture expense of Rs. 2,70,000/- which assessee has claimed in computation of income is too far fetched. In agriculture sector and in rural areas of Punjab it is customary to pay such expenses in cash to all stakeholders particularly so in the agriculture sector. The Ld. PCIT in impugned ord ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... pugned order as well as the original assessment order dt. 03/06/2019 passed under section 143(3) r.w.s 147/148 we are of the considered view that there is no legal infirmities in the order of Ld. AO dt. 03/06/2019. We hold that due process of law with all rigorous were duly followed by the Ld. AO; appropriate notice(s) u/s 147/148, 143(2) and 142(1) were duly given and were received by the assessee. The return of income was filed as an agriculturist on 25/04/2019 declaring net income of Rs. 6710/- + Rs. 7,80,000/- as agriculture income. Detailed questionnaire were issued on 01/05/2019 for 15.05.2019 which were properly replied to by the assessee. The AR of the assessee attended the assessment proceedings and it is recorded that AR furnished all requisite information / documents called for during the course of assessment proceedings the Ld. AR furnished detailed reply alongwith documentary evidences of cash deposited in bank during the period under consideration which were duly examined and were placed on record (page 4 to 7 of paper book). Further upon many queries raised a yet another reply is on record dt. 22/05/2019 (page 27 to 28 of paper book) wherein it was highlighted that a ..... X X X X Extracts X X X X X X X X Extracts X X X X
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