The main legal point established in the judgment is that the first respondent failed to adequately consider key issues and objections raised by the petitioner, leading to the setting aside of the impugned order and remittance of the matter for reconsideration.

1. The petitioner is aggrieved against the order of the first respondent dated 20.03.2017, passed under Section 264 of the Income Tax Act, 1961, in respect of the assessment year 2008-09.

2. Through the impugned proceedings, the first respondent rejected the petition filed by the assessee under Section 264 with further direction to the Assessing Officer to treat the lands in question as non-agricultural in nature and therefore, as capital assets, in the hands of the assessee, exigible to capital gain tax.

3. The following are the facts and circumstances, as projected by the petitioner, which have lead to filing of the present writ petition :

The petitioner is an individual engaged in the business of real estate. He owned various agricultural lands and was gaining agricultural income during the financial year preceding the relevant assessment year 2008-09. The petitioner and one Anoop Bora jointly purchased 13.91 acres of agricultural land from the Official Liquidator, Madras High Court on 11.05.2005 by public auction. They also purchased another extent of agricultural land measuring 13.14 acres during the same year. In 2006-07, they purchased further extent of 3.88 acres in the same village. Thus, the total extent of land held by them was 30.93 acres. Out of the said extent, they transferred 19.14 acres of land to two individuals on 21.08.2006. During the financial year relevant to assessment year 2008-09, they sold the remaining 11.29 acres to another individual on 30.05.2007. The lands in question are located in Sirunganallur, Unnamali Village and Kuzhipanthandalam village. The Encumbrance Certificate for all these lands evidences clearly that they are agricultural lands. The chitta, patta and the A-Register records for the relevant period would also show that there were crops during the year of sale and thus, they are only agricultural lands. Section 2(14) of the Income Tax Act, 1961, which defines capital asset, specifically excludes agricultural land. Therefore, the petitioner did not offer this income to tax in his return. His return was accepted and intimation under Section 143(1) was also sent. On 21.03.2014, a notice under Section 147 of the said Act was received by the petitioner for reopening the assessment on the ground that the lands in question were not agricultural lands. The petitioner participated in the assessment proceedings and submitted necessary documents. However, the second respondent passed an order of assessment dated 30.03.2015 that the lands in question are not agricultural lands and that the capital gains received by the said land is taxable as business income. Consequently, demand notice dated 30.03.2015 was issued demanding a sum of Rs.4,09,51,350/-. Thereafter, the petitioner preferred an appeal under Section 250(6) of the said Act before the Commissioner of Income Tax (Appeals). However, the said appeal was dismissed as withdrawn on 16.09.2016 at the instance of the petitioner for pursuing the revision before the Commissioner of Income Tax under Section 264 of the said Act. The petitioner filed the revision under Section 264 before the first respondent by contending that the lands are used for agricultural purposes; that the assessment had been reopened under Section 147 beyond four years without there being any averment that the petitioner had not fully and truly disclosed material facts and that the order and the demand notice was served on the petitioner after 9 months, from the date on which it was passed. The petitioner also contended before the first respondent that the claim of the joint owner viz., Anoop Bora before his Assessing Officer that the subject matter lands are agricultural lands, was accepted and the Department had dropped proceedings. Therefore, the very same lands cannot be treated as non-agricultural lands, in the hands of the petitioner. However, the first respondent rejected the petition on 20.03.2017. A rectification petition filed under Section 154 also came to