Case Number: ITA 788/DEL/2021
Appellant: Malook Singh, Hapur
Respondent: Pr. CIT, Ghaziabad
Assessment Year: 2016-17
Case Filed on: 2021-06-24
Order Type: Final Tribunal Order
Date of Order: 2023-01-25
Pronounced on: 2023-01-25
This case involves Malook Singh, an individual engaged in farming, and the Principal Commissioner of Income Tax (Pr. CIT) of Ghaziabad. The appellant filed an appeal against the revision order passed under Section 263 of the Income Tax Act by the Pr. CIT for the assessment year 2016-17.
The appellant challenged the order of the Pr. CIT, Ghaziabad, dated 02.03.2021, which directed the reopening of a concluded assessment and ordered a fresh assessment for the assessment year 2016-17. The appeal was filed on the grounds that the order passed under Section 263 was without jurisdiction and bad in law.
The case was heard by the Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘E’ on 06.12.2022, with Dr. B. R. R. Kumar, Accountant Member, and Sh. Yogesh Kumar US, Judicial Member, presiding over the matter. The appellant was represented by Sh. Mayank Patwari, CA, and Sh. Shrey Sinha, Adv., while the respondent was represented by Sh. Kanav Bali, Sr. DR.
The appellant, Malook Singh, filed his return of income declaring agricultural income from high-quality breeder, foundation, and certified seeds of various crops. His case was selected for scrutiny to examine cash deposits, and the assessment was completed with a determination of income and agricultural income.
The Pr. CIT initiated proceedings under Section 263, contending that the net agricultural income of the appellant was higher than declared, and treated the agricultural income as business income based on the cultivation of high-quality seeds, which was considered different from normal agricultural activities.
The appellant argued that the Pr. CIT erred in treating the agricultural income as business income and in considering the cultivation of high-quality seeds as non-agricultural produce. The appellant provided all necessary documentation, including bills, vouchers, lease rent receipts, power bills, fertilizer and seed expenses, labor wages, sales details, mandi receipts, and official reports from Tehsildar and Lekhpal to substantiate his claim of agricultural operations.
The appellant emphasized that similar income from the same agricultural operations had been accepted as agricultural income in earlier and subsequent assessment years.
The tribunal, after considering the submissions and material on record, found that the Pr. CIT’s assumption of jurisdiction under Section 263 was not justified. The tribunal noted that the appellant provided sufficient evidence to support his claim of agricultural income, and the AO had examined these documents during the assessment proceedings.
The tribunal observed that the Pr. CIT’s decision was based on a misinterpretation of agricultural activities, and the income from the sale of high-quality seeds should be considered as agricultural income. The tribunal allowed the appeal on procedural technicalities as well as on merits.
In conclusion, the appeal filed by Malook Singh against the order of the Pr. CIT, Ghaziabad, under Section 263 of the Income Tax Act was allowed. The tribunal found that the Pr. CIT’s decision to treat the agricultural income as business income was not justified, thereby vacating the Pr. CIT’s order.
Order pronounced in the open Court on 25/01/2023
Signed:
Yogesh Kumar US, Judicial Member
Dr. B. R. R. Kumar, Accountant Member
Assistant Registrar, ITAT, New Delhi
Malook Singh vs. Pr. CIT: Appeal on Section 263 Revision Order – ITA 788/DEL/2021
Manage the increasing number of hearings effortlessly by leveraging the legal AI revolution We are India's Leading revolutionary AI-powered legal platform where you can get enough insights into top cases and judgements.
Research Platform