Tax Revision Upheld: AO's Failure to Verify Agricultural Land Rights Makes Assessment Erroneous Under Section 263 (1)

The ITAT upheld revision proceedings under section 263 against the assessee who claimed agricultural income exemption under section 10(1). Despite limited scrutiny focused on "larger agricultural income," the AO failed to verify the assessee's title or leasehold rights on the agricultural land. The Tribunal rejected the assessee's arguments that the PCIT should have conducted inquiries himself before terming the assessment erroneous, noting that the PCIT had clearly established a case of "no enquiry" by the AO. The ITAT found that both conditions-erroneous assessment and prejudice to Revenue's interests-were satisfied per Malabar Industries Ltd. The revision jurisdiction was properly exercised, and the appeal was decided against the assessee. .....

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