JAMES JOSEPH PALACKAN,PALACKAL V. ITO, WARD-2, KOTTAYAM

ITA 625/COCH/2025

AI Insights

The case involves James Joseph Palackan, an individual engaged in civil contracts, who appealed against the order of the National Faceless Appeal Centre, Delhi, which confirmed the AO's assessment disbelieving his declared agricultural income of Rs. 30,00,000 for the Assessment Year 2016-17. Initially, Palackan filed a return declaring an income of Rs. 2,97,440 and agricultural income of Rs. 30,00,000, which he later revised to Rs. 1,00,000. The AO disbelieved the agricultural income due to lack of substantiation and ignored the revised return, leading to an assessment of Rs. 32,90,310. The CIT(A) upheld the AO's decision, prompting Palackan to appeal to the Tribunal.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 784497 (ITAT-COCHIN)
• Duration Of Justice: 2 month(s) 13 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-11-2025
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: SMC
• Assessment Year: 2016-2017
• Appeal Filed On: 01-09-2025
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: LEENA LAL
• Assessee Lawyers: C.J. ROMID
• Keywords: Revised return
• Section: 143(3)

Judgement Text

" IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM ITA No. 625/Coch/2025 Assessment Years: 2015-16 James Joseph Palackan .......... Appellant Palco Constructions, Palackal, Vaikom Kottayam 686140 [PAN: AEUPP8573P] vs. The Income Tax Officer, Ward-2, Kottayam .......... Respondent Assessee by: Shri C.J. Romid, CA Revenue by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 28.10.2025 Date of Pronouncement: 14.11.2025 O R D E R This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)] dated 07.07.2025 for Assessment Year (AY) 2016-17. 2. Brief facts of the case are that the appellant is an individual engaged in the business of executing civil contracts. The return of income for AY 2016-17 was filed on 29.06.2016 declaring income of Rs. 2,97,440/- and also agricultural income of Rs. 30,00,000/-. The same was revised on 24.01.2018 showing agricultural income of Rs. 1,00,000/- only. Against the said return of income, the assessment was completed by the Income Tax Officer, Ward-2, Kottayam (hereinafter called \"the AO\") vide order dated 31.12.2018 Printed from counselvise.com 2 ITA No. 625/Coch/2025 James Joseph Palackan passed u/s. 143(3) of the Income Tax Act, 1961 (the Act) at a total income of Rs. 32,90,310/- disbelieving the agricultural income of Rs. 30,00,000/- by holding that the appellant had failed to substantiate deriving of agricultural income of Rs. 30,00.000/-. 3. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the action of the AO. 4. Being aggrieved, the appellant is in appeal before this Tribunal in the present appeal. 5. The learned counsel for the assessee submits that the AO had completed the assessment ignoring the revised return of income filed by the appellant. Similarly, the CIT(A) ought not have held that the appellant had not filed the revised return of income. 6. On the other hand, the learned Sr. DR, submits that the revised return of income filed by the appellant is not valid in law in the absence of any valid reasoning for revising the return of income. 7. I heard the rival contentions and perused the material available on record. The solitary issue that arises for my consideration is whether the CIT(A) was justified in confirming the addition of Rs. 30,00,000/- disbelieving the agricultural income. The made the addition of Rs 30,00,000/- by holding that the appellant had failed to substantiate deriving of agricultural income of Rs. 30,00,000/-. However, the appellant had revised the return of income showing agricultural income of Rs. 1,00,000/- only. The AO had totally Printed from counselvise.com 3 ITA No. 625/Coch/2025 James Joseph Palackan ignored the revised return of income. However, the CIT(A) held that the revised return of income is not valid in law in the absence of valid reasons for revising the return of income. Mere disbelieving agricultural income does not result in taxable income, inasmuch as, the agricultural income was not shown as application of income. The very fact that the appellant had revised the return of income showing agricultural income of only Rs. 1,00,000/- would demonstrate the fact that this agricultural income of Rs. 30,00,000/- was not shown as application of income. In any event, the assessing authority ought not have ignored the revised return of income filed by the appellant. Therefore, I am of the considered opinion that the matter requires remand for de novo assessment taking into consideration the revised return of income as filed by the appellant. Accordingly, I remand the matter back to the file of the AO for de novo adjudication in accordance with law after affording reasonable opportunity of hearing to the appellant.- 8. In the result, the appeal filed by the assessee stands partly allowed for statistical purposes. Order pronounced in the open court on 14th November, 2025. Sd/- (INTURI RAMA RAO) ACCOUNTANT MEMBER Cochin, Dated: 14th November, 2025 n.p. Printed from counselvise.com 4 ITA No. 625/Coch/2025 James Joseph Palackan Copy to: 1. The Appellant 2. The Respondent 3. The Pr. CIT concerned 4. The Sr. DR, ITAT, Cochin 5. Guard File By Order Assistant Registrar ITAT, Cochin Printed from counselvise.com "