DR. PRATAP PANDHIRANATH PATIL,PUNE V. PCIT - 2, PUNE

ITA 1026/PUN/2025

AI Insights

The case involves Dr. Pratap Pandharinath Patil, who appealed against the order of the PCIT, Pune-2, which was passed under Section 263 of the Income Tax Act, 1961, revising the assessment order for the Assessment Year 2020-21. The original assessment order had treated certain agricultural receipts and expenditures as 'Income from Other Sources' due to insufficient evidence provided by the assessee. The PCIT later directed a re-examination of these additions under Sections 68 and 69C, citing that the original order was erroneous and prejudicial to the interests of the revenue. The Tribunal, however, found that the AO had conducted a detailed examination and taken a permissible view, thus quashing the PCIT's order.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 793218 (ITAT-PUNE)
• Duration Of Justice: 5 month(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 23-09-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: B
• Assessment Year: 2020-2021
• Appeal Filed On: 23-04-2025
• Other Referred Cases: Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors., Inder Singh Vs. State of Madhya Pradesh, Malabar Industrial Company Ltd. vs. CIT, CIT Vs. Max India Ltd., CIT Vs. Gabriel India Ltd.
• Laws Referred To: Income-tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: AMIT BOBDE
• Assessee Lawyers: A.V.IYER
• Keywords: Condonation of delay; Set aside; Difference of opinion; Change of opinion; Opportunity of being heard; Additional evidence; Reasonable cause; Unexplained cash credit; Unexplained expenditure; Period of limitation; Principle of natural justice; Assessment record; Revision of order
• Section: 142(1); 263; 68; 69C

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCHES “B”, PUNE BEFORE DR.MANISH BORAD, ACCOUNTANT MEMBER AND SHRI VINAY BHAMORE, JUDICIAL MEMBER आयकर अपील सं. / ITA No.1026/PUN/2025 Assessment Year: 2020-21 Dr. Pratap Pandharinath Patil 1130, Dnyaneshwar Paduka Chowk, Shivajinagar, Pune city, Congress House Road S.O, Pune - 411005, Maharashtra PAN: AFHPP4512N Vs. PCIT-2, Pune Appellant Respondent आदेश / ORDER PER DR. MANISH BORAD, ACCOUNTANT MEMBER : The captioned appeal at the instance of assessee pertaining to A.Y. 2020-21 is directed against the order dated 05.02.2025 of PCIT, Pune-2 passed u/s.263 of the Income-tax Act, 1961 (hereinafter also called ‘the Act’) arising out of Assessment Order dated 12.09.2022 passed u/s.143(3) r.w.s144B of the Act. 2. Registry has informed that there is delay of 23 days in preferring the instant appeal before this Tribunal. Assessee has filed an application for condonation of delay explaining the reasons which led to delay in filing of the appeal. The contents of the said application reads as under : Appellant by : Shri A.V.Iyer and Shri Siddhant G. Biswas Respondent by : Shri Amit Bobde Date of hearing : 19.08.2025 Date of pronouncement : 23.09.2025 Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 2 “The appeal could not be filed within the prescribed time due to the following reasons: 1. My legal counsel was on bed rest for a period of time as he was suffering through major medical issues, making it difficult to prepare and submit the appeal within the deadline. 2. Additionally, I was out of town during the critical period, which further delayed the filing. I kindly request the Hon'ble Tribunal to condone this delay and allow my appeal to be heard on its merits. The delay was unintentional, and I assure you that I have made every effort to file the appeal at the earliest possible opportunity. Thanking you for your understanding and Co-operation,” 3. After hearing both the sides and perusing the averments made in the condonation application, we are satisfied that there was ‘reasonable cause’ which prevented the assessee to file the appeal within the stipulated time. We note that the assessee would not have gained from filing the appeal with a delay. We therefore in light of judgments of Hon’ble Apex Court in the case of Collector, Land Acquisition, Anantnag & Anr. Vs. Mst. Katiji & Ors. reported in (1987) 2 SCC 107 and in the case of Inder Singh Vs. State of Madhya Pradesh judgment dated 21.03.2025 (2025 INSC 382) condone the delay of 23 days in filing the appeal before this Tribunal. 4. Assessee has raised following grounds of appeal : “1. The Ld. PCIT has failed to appreciate that for invoking Section 263, both conditions must be satisfied simultaneously: (i) The assessment order must be erroneous, and (ii) Such error must be prejudicial to the interest of the revenue. In the absence of both conditions being met, the invocation of Section 263 is unjustified and bad in law. Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 3 2. The Learned PCIT has erred in law and on facts in assuming jurisdiction U/s 263 of the act on the erroneous ground that the impugned assessment order is erroneous in so far as it is prejudicial to the interest of the revenue. 3. The Learned AO has passed the reasoned assessment order only after analyzing/Scrutinising all details and therefore there was no error in the impugned assessment order so as to justify action U/s. 263 of the Act. Under the circumstances, the very assumption of power U/s. 263 of the Act is unjustified and bad in law and therefore, order u/s.263 of the Act deserves to be quashed. 4. The impugned order U/s 263 is bad in law as the Ld. PCIT has failed to bring any new material, findings or additional evidence to substantiate how the Assessing Officer's (AO) alleged error resulted in a loss to revenue. Mere disagreement with the AO's view does not render the assessment order erroneous and prejudicial to revenue. Without demonstrating an actual revenue loss or a lack of inquiry leading to such a loss, the invocation of Section 263 is unjustified and unsustainable in law. 5. The Ld. PCIT has erred in using his powers U/s 263 of the Income Tax Act That does not empower him to impose his view over a judicious view adopted by the Learned AO unless the latter's view is proven to be legally unsustainable. 6. The Ld. PCIT failed to appreciate that when one possible view has been taken by AO the same cannot be treated as erroneous and prejudicial to the interest of the revenue merely because the PCIT holds a different opinion. Accordingly, revisionary order U/s 263 of the Income Tax Act based on mere change of opinion is unsustainable in law. 7. The Ld. PCIT overlooked the fact that the assessee had already filed an appeal before the Ld. CIT(A) against the additions made by the Ld. AO in the assessment order. As per the proviso to Section 263(1) of the Income Tax Act, 1961, once an appeal is pending before the Ld. CIT(A), the PCIT has no jurisdiction to revise the same matter. Furthermore, the Ld. PCIT erred in law by invoking Section 263 based on a mere change of opinion on the additions made by the Ld. AO, without demonstrating any error that is prejudicial to the interest of revenue, as required by law. Such an action is legally unsustainable & bad in law, 8. Your appellant prays leave to produce such other evidence as may be necessary to substantiate its case. The appellant craves leave to add, amend, modify, or delete any of the grounds of appeal at or before the hearing.” Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 4 5. From the above grounds of appeal, we find that though the assessee has raised as many as Eight grounds of appeal but all are against the order assuming jurisdiction by ld. PCIT u/s.263 of the Act setting aside the assessment order for A.Y. 2020-21 dated 12.09.2022 on the sole issue about the addition towards unexplained Agricultural Receipts at Rs.38,46,424/- and unexplained Agricultural Expenditure at Rs.4,36,820/- has been wrongly added by the ld. Assessing Officer by treating as ‘Income from Other Sources’ rather than making addition for the sum invoking u/s.68 and 69C r.w.s.115BBE of the Act. 6. Brief facts of the case are that the assessee is an individual and has filed the return of income for A.Y. 2020-21 on 26.03.2021 declaring income of Rs.4,83,290/- and also claiming exempt Agricultural Income at Rs.53,02,491/-. Case selected for Limited Scrutiny on the issue of Agricultural Income followed by validly issue of statutory notices u/s.143(2) and 142(1) of the Act. During the course of assessment proceedings, assessee furnished various details demonstrating the ownership of the Agricultural land admeasuring 19 Acres located at Tasgaon of District Sangli on which cultivation is carried out for the crops like Sugarcane, Jawar, Soyabean, Barley, Groundnut and Vegetables etc. During the course of assessment proceedings, ld. Assessing Officer further observed that the assessee was unable to provide the proof of Agricultural Receipts to the extent of Rs.39,72,837/- out of the total receipts of Rs.53,02,491/-. However, the assessee in reply dated 16.02.2022 furnished certain more details like sale bills and bank statements. After considering these details, ld. AO finally concluded the assessment by making addition for unexplained Agricultural Income at Rs.38,46,424/- and also Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 5 disallowed Agricultural Expenses at Rs.4,36,820/- as ‘Income from Other Sources’ and assessed income at Rs.47,66,534/-. 7. Thereafter, ld. Principal Commissioner of Income-tax (PCIT) called for the assessment records and issued show cause notice u/s.263 of the Act on 25.10.2024 referring to the sole issue that ld. AO erred in making the addition for income of Rs.42,83,244/- as ‘Income from Other Sources’ rather than invoking section 68 of the Act for unexplained Agricultural Receipts at Rs.38,46,424/- and also erred in invoking section 69C of the Act for unexplained Agricultural Expenses at Rs.4,36,820/-. 8. In the revisionary proceedings, assessee again furnished the details stating that ld. AO has called for all the relevant details. After examining the same, ld. AO was partly satisfied with the details as certain details relating sale bills were not available on record. He therefore made the addition and further for the expenditure for carrying out agricultural operations, an adhoc disallowance was made. He submitted that the assessee has already challenged the addition made by ld. AO before ld.CIT(A) and the same is still pending for adjudication. However, ld. PCIT was not satisfied with these submissions and he directed the ld. AO to carry out the assessment proceedings on the issues dealt in the impugned order and relevant finding of ld.PCIT reads as under : “06. I have carefully gone through the facts of the case, the Assessment record and the submissions made by the assessee during the revision proceedings u/s 263 Act. Section 68 of the Act mandates that if any credit appears in the books of an assessee, and the assessee fails to satisfactorily explain the nature and source of such credit, the amount is treated as income of the assessee. Similarly, section 69C of the Act mandates that if any expenditure is incurred in the books of an assessee, and the assessee fails to Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 6 satisfactorily explain the nature and source of such expenditure, the amount is treated as income of the assessee. With the introduction of Section 115BBE, such unexplained credits are taxed at a higher rate from AY 2013-14. 07. From the above, it is clear that the addition made by the AO was in relation to the agriculture income of Rs.38,46,424/- and agriculture expenditure of Rs.4,36,820/which were treated as unexplained and brought to tax. The additions were made by AO as \"Income From other Sources\". However, section 68 and 69C of the Act are the ones which are applicable to the facts of this case. The higher tax rate prescribed under the provisions of section 115BBE, remained to be applied by the AO while computing the tax liability. 08. In the light of the above facts, I am satisfied that the assessment order dated 12.09.2022 passed for the Assessment Year 2020-21 is erroneous in so far as it is prejudicial to the interest of the Revenue. Consequently, the said assessment order dated 12.09.2022 for the A.Y.2020-21 is hereby partly set aside to the file of the AO for the limited purpose of examining the following issues and passing fresh assessment order in the light of enquiries made: I. To examine the feasibility of addition on account of agriculture receipts of Rs.38,46,424/- under Section 68 of the Income Tax Act, 1961. II. To examine the feasibility of addition on account of agriculture expenditure of Rs.4,36,820/- under Section 69C of the Income Tax Act, 1961.” 9. Aggrieved assessee is now in appeal before this Tribunal. 10. Ld. Counsel for the assessee made multifold arguments. Firstly, he stated that ld. PCIT erred to assume jurisdiction u/s.263 of the Act on the issue which is already subject matter of appeal before ld.CIT(A). Secondly, he stated that when the issue has already been examined by ld. AO in detail, ld. PCIT erred in assuming jurisdiction. Further, he referred and relied on various decisions mentioned in the case law paper book including that of Hon’ble Apex Court in the case of M/s. The Malabar Industrial Company Ltd. (2000) 243 ITR 83 (SC), CIT Vs. Max India Ltd. (2007) 295 ITR 282 (SC) and Judgment of Hon’ble Bombay High Court in the case of CIT Vs. Gabriel India Ltd. (1993) 203 ITR 108 (Bom.). Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 7 11. On the other hand, ld. Departmental Representative vehemently argued supporting the order of ld. PCIT. 12. We have heard the rival contentions and perused the record placed before us. We will first take up the issue raised by the assessee that ld. PCIT erred in assuming jurisdiction u/s.263 of the Act on the ground that the issue referred in the show cause notice already stands examined by ld. AO and has taken a plausible view and made addition on the said issue. 13. We find that the provision of Section 263 of the Act has direct bearing on the issue raised before us, therefore, it is pertinent to take note of this section which reads as under: \"263(1) The Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Assessing Officer is erroneous in so far as it is prejudicial to the interests of the revenue, he may, after giving the assessee an opportunity of being heard and after making or causing to be made such inquiry as he deems necessary, pass such order thereon as the circumstances of the case justify, including an order enhancing or modifying the assessment, or cancelling the assessment and directing a fresh assessment. Explanation- For the removal of doubts, it is hereby declared that, for the purposes of this sub-section,- (a) an order passed on or before or after the 1st day of June, 1988 by the Assessing Officer shall include- (i) an order of assessment made by the Assistant Commissioner or Deputy Commissioner or the Income-tax Officer on the basis of the directions issued by the Joint Commissioner under section 144A; (ii) an order made by the Joint Commissioner in exercise of the powers or in the performance of the functions of an Assessing Officer conferred on, or assigned to, him under the orders or directions issued by the Board or by the Chief Commissioner or Director General or Commissioner authorized by the Board in this behalf under section 120; (b) record shall include and shall be deemed always to have included all records relating to any proceeding under this Act available at the time of examination by the Commissioner; Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 8 (c) where any order referred to in this sub-section and passed by the Assessing Officer had been the subject matter of any appeal filed on or before or after the 1st day of June, 1988, the powers of the Commissioner under this sub-section shall extend and shall be deemed always to have extended to such matters as had not been considered and decided in such appeal. (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation- In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded.\" 14. On a bare perusal of the sub section-1 would reveal that powers of revision granted by section 263 to the learned Commissioner have four compartments. In the first place, the learned Commissioner may call for and examine the records of any proceedings under this Act. For calling of the record and examination, the learned Commissioner was not required to show any reason. It is a part of his administrative control to call for the records and examine them. The second feature would come when he will judge an order passed by an Assessing Officer on culmination of any proceedings or during the pendency of those proceedings. On an analysis of the record and of the order passed by the Assessing Officer, he formed an opinion that such an order is erroneous in so far as it is prejudicial to the interests of the Revenue. By this stage the learned Commissioner was not required the assistance of the assessee. Thereafter the third stage would come. The learned Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 9 Commissioner would issue a show cause notice pointing out the reasons for the formation of his belief that action u/s 263 is required on a particular order of the Assessing Officer. At this stage the opportunity to the assessee would be given. The learned Commissioner has to conduct an inquiry as he may deem fit. After hearing the assessee, he will pass the order. This is the 4th compartment of this section. The learned Commissioner may annul the order of the Assessing Officer. He may enhance the assessed income by modifying the order. He may set aside the order and direct the Assessing Officer to pass a fresh order. At this stage, before considering the multi-fold contentions of the ld. Representatives, we deem it pertinent to take note of the fundamental tests propounded in various judgments relevant for judging the action of the CIT taken u/s 263. 15. Hon'ble Supreme Court in the case of Malabar Industrial Co. Ltd. vs. CIT (2000) 243 ITR 83 (SC)has laid down following ratio with regard to provisions of section 263 of the Act: “There can be no doubt that the provision cannot be invoked to correct each and every type of mistake or error committed by the Assessing Officer; it is only when an order is erroneous that the section will be attracted. An incorrect assumption of facts or an incorrect application of law will satisfy the requirement of the order being erroneous. In the same category fall orders passed without applying the principles of natural justice or without application of mind. The phrase 'prejudicial to the interests of the revenue’ has to be read in conjunction with an erroneous order passed by the Assessing Officer. Every loss of revenue as a consequence of an order of the Assessing Officer cannot be treated as prejudicial to the interests of the revenue, for example, when an ITO adopted one of the courses permissible in law and it has resulted in loss of revenue; or where two views are possible and the ITO has taken one view with which the Commissioner does not agree, it cannot be treated as an erroneous order prejudicial to the interests of the revenue unless the view taken by the ITO is unsustainable in law. It has been held by this Court that where a sum not earned by a person is assessed as income in his hands on his so offering, the order passed by the Assessing Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 10 Officer accepting the same as such will be erroneous and prejudicial to the interests of the revenue - RampyariDevi Saraogi v. CIT [1968] 67 ITR 84 (SC) and in Smt. Tara Devi Aggarwal v. CIT [1973] 88 ITR 323 (SC). [Emphasis Supplied]” 16. Now examining the contentions of ld. Counsel for the assessee in light of the settled judicial precedents and the provisions of section 263 of the Act, we note that ld. AO has not disputed the fact that the assessee owns Agricultural land admeasuring 19 Acres at Village Tasgaon of District Sangli and carry out the Agricultural activities by growing crops like Sugarcane, Jawar, Soyabean, Barley, Groundnut and Vegetables etc. Case of the assessee selected for Limited Scrutiny for examining the issue of Agricultural income. Ld. AO has raised various queries with regard to the Agricultural income wherein Agricultural Receipts were shown at Rs.53,02,491/- and the same included the receipt from sale of sugarcane to Udgir Sugar and Power Ltd. at Rs.14,56,067/- and ld. AO has accepted the said sale. For the remaining sales, necessary Agricultural Receipts were provided but not to the satisfaction of ld. AO. Further, ld. AO also asked about the detail of expenses incurred for carrying out the Agricultural activities. Vide reply dated 22.03.2022, assessee answered to all these queries which ld. AO had captured in the assessment order and is available in para 9 which reads as under : “9 In response to the above show cause notice, the assessee has filed reply on 22/03/2022 which is reproduced as under: “.......This has reference to Limited Scrutiny Notice U/s 143 (2) dated 29/06/2021 bearing No. ITBA/AST/S/143 (2)/2021-22/10337 59438 (1), and subsequent Notice u/s 142(1), bearing No. ITBA/AST/F/142(1)/2021-22/L037 tso 531 (1) dated 23.11.2021 issued by Your Honour in case of above named assessee, for assessment year 2020-21. Copy of both the Notices are enclosed herewith for Your ready reference' sir, as per the Notice u/s 143(2), the Limited scrutiny has been initiated with regard to Agricultural Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 11 income of Rs. 53,02,491/-, shown by the assessee in his return of Income for assessment Year 2020-21. In this connection, We wish to submit as under: 1) The assessee is a Homeopath Doctor by qualification, but does not practice as a HomeoPathic Doctor. 2) The assessee runs a Medical shop supplying Homeopathic Medicines, in Pune, which is looked after and managed by his wife Dr. Bharati Patil, who is also a qualified Homeopathic Doctor. 3) The assessee spends his entire time in looking after and managing the –Agricultural Land belonging to him and his family members., located at village Shirgaon (Visapur), Taluka Tasgaon, District Sangli, in the state of Maharashtra. 4) Thus the Assessee has two source of income; a) Income from Homeopathic Medical Shop at Pune; and b) Agricultural Income. 5) The Agricultural produce, which are mainly cultivated in the Agricultural Land Holdings of Assessee and his Family members consists of: a) Sugarcane: b) Soya bean; c) Groundnut d) Barley and e) Different type of Vegetables 6) As far as Sugarcane is concerned, it is sold to nearby Sugar factories and Payment thereof is received through Account payee Cheques. As far as other Produce are concerned, they are sold in the market and payments at maximum times are received in cash. 7) In case of assessee, as has been mentioned above, he manages and looks after the land of all the Family members. Accordingly, as per the Oral family agreement and understanding, the sugarcane sale proceeds are received by the family members, in their respective bank accounts and shown as Agricultural Income in their respective Income Tax returns. As far as Sugarcane is concerned, it is sold to nearby Sugar factories and Payment thereof is received through Account payee Cheques. As far as other Produce are concerned, they are sold in the market and payments at maximum times are received in cash. As far as Sale proceeds of other Products are concerned, it is collected and kept by the assessee and shown as Agricultural income in his Income Tax Return 8) The bifurcation of Agricultural Income of Rs.53,02,491/-, shown in the Income tax Return of assessee is as under a) Sale of Sugarcane to Udgir Sugar and Power Limited - Rs.13,29,654/- received through banking channels in the Bank account maintained with Sangli Co-operative Bank b) Sale of other products through APIYC - Rs.9,37,791/- payments for which were received through Banking Channels in Shirgoan (Visapur) Credit Co-operative Society, from which the assessee has taken Agricultural Loan and Car Loan. c) Sale of other products through APMC - Rs. 3,90,711/- payments for which were received through Banking Channels, in the Bank account maintained with Sangli Co-operative Bank d) Sum of Rs.22,335/- subsidy received from Government and directly deposited in the Bank account maintained with Sangli Co-operative Bank e) Sum of Rs. 26,22,000/- has been received on account of sale in Market. As a policy matter the cash sale proceeds are immediately deposited in Bank. 9) As stated above, the assessee has only two source of income. Thus all the Amount deposited in sanagri co-operative Bank constitute only agricultural income. The assessee does not have any other source of income, which he has shown, in the grab of agricultural income, to avoid tax. Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 12 In support of our contention, we are enclosing herewith: 1) Copy of Financial Statements of assessee for the financial year 2019-20 pertaining to assessment year 2020-27, 2) Copy of Statement of Total Income and Acknowledgement of Income tax Return filed. 3) Detailed chart showing Land. Holding of family members of assessee along With the copies of Land Holding extract in form 8A, issued by, Talati of Village Shirgaon (Visapur). 4) Ledger extract of assessee in the books of Udgir Sugar and power Limited. 5) Extract of Agricultural Loan and Car Loan account with Shirgoan (Visapur) Credit Co- operative Society. 6) Detailed Ledger extract of Agriculture income of assessee. Hope this meets with Your requirements. We shall be glad to submit any more information, that your honour may require for an early assessment. 17. We further note that ld. AO has duly considered the reply filed by the assessee and thereafter made the addition for the Agricultural Receipts of Rs.39,72,837/- as ‘Income from Other Sources’ and further made adhoc disallowance of Agricultural Expenses @30% of Rs.14,56,067/- computed at Rs.4,36,820/-. Observation of ld. AO reads as under : “9.1 The reply of the assessee has been duly considered. The reply submitted by the assessee is nothing but copy of earlier reply filed on 16/02/2022 which has already been taken into consideration before issuing the show cause notice. Thus, nothing new has brought on record by the assesee in response to the show cause notice. The contention of the assessee is not supported by necessary evidence such as sales bills and bank statement. The assessee was also requested to submit bank statement as well as details of agricultural expenses vide notice u/s. 142(1) of the Act dated 11/11/2021 and 22/02/2022. However, the assessee has again failed to submit the same in response to show cause notice also. In this case, the assessee has not submitted sales bills in respect of remaining agricultural income of Rs.39,72,837/- (53,02,491-13,29,654). Thus, the assessee has failed to submit supporting details / evidences in respect of agricultural receipts of Rs.39,72,837/-. It is worthwhile to mention here that the assessee has reported agricultural expenses as NIL in the return of income. One has to incur agricultural expenses such as labour charges, electricity expenses, labour charges, expenses for seeds, pesticides to earn agricultural income. Despite of repeated requests, the assessee failed to produce evidence of agricultural expenses also. 10. In the meantime, the statutory time limitation for completion of assessment proceedings has been extended from the end of March, 2022 to the end of September, 2022. Therefore, another show cause was issued on 22/08/2022 to submit any other details in response to Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 13 the show cause notice. The assessee has not filed any reply till date. Therefore, the reply filed by the assessee on 16/02/2022 has been taken into consideration. 11. On verification of ledger for sale of sugarcane sold to Udgir Sugar and Power Ltd. It is noticed that the assessee has received income of Rs.14,56,067/- on account of sale of sugarcare. The said income was mistakenly mentioned as Rs. 13,29,654/- in the show- cause notices instead of correct income of Rs. 14.56.067/-. Thus, the unexplained agricultural income will be Rs.38,46,424/- (Rs.53,02,491-14,56,067/-). The above mistake is now duly corrected. As mentioned in the foregoing paras, the assessee has reported agricultural expenses as NIL in the return of income. It is not possible to earn agricultural income without making any expenses. One has to incur agricultural expenses such as labour charges, electricity expenses, labour charges, expenses for seeds, pesticides to earn agricultural income. Despite of repeated requests, the assessee failed to produce evidence of agricultural expenses also. Looking to the facts and circumstances of the case I presume agricultural expenses to be Rs.4,36,820/- (30% of the Rs. 14,56,067/-). I therefore treat an amount of Rs.10,19,247/- (14,56,067-4,36,820) as income earned from the agricultural activities. Therefore, an amount of Rs.42,83,244/-(53,02,491-10,19,247) is required to be treated as income from other sources due to failure on the part of the assessee to submit supporting details/evidences. 12. From the above, it can be seen that sufficient opportunities have been given to the assessee to submit evidence of agricultural income. In the absence of supporting details i.e. sales bills as well as bank statement, the agricultural receipts of Rs.42,83,244/- remained unexplained. In the absence of supporting details / documents, the claim of agricultural income to the extent of Rs.42,83,244/- is not found admissible to the assessee. Therefore, I hereby treat the agricultural receipts of Rs.42,83,244/- as \"income from other sources\". Therefore, addition of Rs.42,83,244/- is hereby made to the total income of the assessee. Penalty proceedings u/s. 270A of the Act for underreporting of income is hereby initiated separately.” 18. From going through the above details, we notice that the only issue referred in the show cause notice by ld. PCIT is that ld. AO ought to have made the addition of Rs.42,83,244/- by invoking section 68 and 69C of the Act for the unexplained Agricultural Receipts and unexplained Expenditure. We fail to find any justification in this observation by ld. PCIT and the basis for assumption of jurisdiction because the issue has already been dealt by ld. AO in detail. He has also verified that Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 14 the assessee is having Agricultural land and Agricultural activities have been carried out. Ld. AO has also verified that part of the Receipts are duly supported by evidence of sale of Agricultural produce. The bank statements were also verified. Assessee is also showing such income from past many years. Agricultural expenses have been disallowed on adhoc basis. All these observations of the ld. AO clearly demonstrated that assessee is carrying out the Agricultural activities and earning income therefrom. However, just for want of certain details ld. AO has not allowed the exemption but has taxed it as ‘Income from Other Sources’. 19. We hold that Hon’ble Bombay High Court in the case of Max India Ltd. (supra) has held that when two views are possible and AO has adopted one, the PCIT cannot revise the order merely because he prefers another view. Secondly, we also note that Hon’ble Bombay High Court in the case of Gabriel India Ltd. (supra) has held that if AO has made enquiry and applies his mind revision u/s.263 is not valid even if PCIT believes further enquiry was needed. 20. In the instant case, we find that ld. AO has taken a permissible view for the year under consideration and therefore it is a case where adequate enquiry has already been conducted by ld. AO and therefore leaves no room for assuming jurisdiction by ld. PCIT because the order of the ld. AO is neither erroneous nor prejudicial to the interest of Revenue. Respective grounds on the assumption of jurisdiction by assessee are hereby allowed. Impugned order is hereby quashed and the assessment order dated 12.09.2022 is restored to its original place. Printed from counselvise.com ITA No.1026/PUN/2025 Dr. Pratap Pandharinath Patil 15 21. In the result, the appeal filed by the assessee is allowed as per terms indicated above. Order pronounced on this 23rd day of September, 2025. Sd/- Sd/- (VINAY BHAMORE) (MANISH BORAD) JUDICIAL MEMBER ACCOUNTANT MEMBER पुणे / Pune; \u0001दनांक / Dated : 23rd September, 2025. Satish आदेश क\u0002 \u0003ितिलिप अ ेिषत / Copy of the Order forwarded to : 1. अपीलाथ / The Appellant. 2. \u000eयथ / The Respondent. 3. The Pr. CIT concerned. 4. िवभागीय ितिनिध, आयकर अपीलीय अिधकरण, “B” ब\u0014च, पुणे / DR, ITAT, “B” Bench, Pune. 5. गाड\u0004 फ़ाइल / Guard File. आदेशानुसार / BY ORDER, // True Copy // Senior Private Secretary आयकर अपीलीय अिधकरण, पुणे / ITAT, Pune. Printed from counselvise.com "