Bhanvarlal Champalal Kanuga Vs PCIT (ITAT Ahmedabad)
ITAT Ahmedabad held that invocation of revisionary power under section 263 of the Income Tax Act sustained as AO failed to conduct proper enquiries and verifications during original assessment proceedings.
Facts- The assessee is an individual. The return was processed u/s.143(1) of the Act and, later, taken up for scrutiny under CASS. Notices u/s. 143(2) and 142(1) of the Act. Thereafter, AO passed the order u/s.143(3) accepting the returned income.
Later, the PCIT issued show-cause notice u/s.263 of the Act on 23-02-2022 stating that the assessee has claimed exempt agricultural income of Rs.1,18,77,893/-, however, has not shown any agricultural expenses for earning this agricultural income.
PCIT concluded that the assessment order was passed without making enquiries which should have been made. The PCIT set aside the order of the AO passed u/s.143(3) of the Act and directed the AO to pass a fresh assessment order after making thorough enquiries and verification of the facts. Being aggrieved, the present appeal is filed.
Conclusion- Held that the revision proceedings do not merely constitute a change of opinion. The AO failed to conduct proper enquiries and verifications during the original assessment proceedings. We concur with the PCIT’s finding that the AO’s order was erroneous due to the lack of enquiry into the exempt agricultural income, the source of payments towards the purchase of land, and the cash deposits in the bank account. Based on the facts and circumstances, and in light of Explanation-2 to Section 263 of the Act, we dismiss the assessee’s appeal and uphold the order passed by the PCIT.
