Home Case Index All Cases Income Tax Income Tax + AT Income Tax - 2017 (3) TMI AT This
Forgot password New User/ Regiser ⇒ Register to get Live Demo
2017 (3) TMI 475 - AT - Income TaxRevision u/s 263 - Penalty proceedings u/s 271(1)(c) - assessment/reassessment proceedings in respect of deduction under S.10B - revision u/s 263 - Held that:- In the instant case, there is no order in so far as penalty proceedings are concerned. The proceedings in respect of assessment and penalty are different and distinct notwithstanding the precondition that later has to be initiated in the course of former proceedings. Though expression ‘assessment’ is used in the Act with different meanings in different context, in so far as Section 263 is concerned, it refers to that particular proceeding which is being considered by the Commissioner. It is not possible to expand the scope of assessment proceeding and assessment, which is subject matter of revision, for the purposes of initiating a new and distinct penalty proceedings of onerous nature. Failure of AO to initiate or impose penalty cannot be a factor capable of vitiating the assessment order in any respect. An assessment, in our considered view, cannot be said to be erroneous or prejudicial to the interest of revenue owing to such failure with respect to initiate a distinct proceedings with a view to evaluate imposition of penalty therein. In view of the forgoing discussion, the Pr. CIT/ CIT is not competent to direct the AO to redo the assessment with a view to initiate and levy penalty in respect of erroneous claim of deduction under S. 10B. No perceptible enquiry was shown to have been made by AO in discharge of quasi judicial function which may reveal any application of mind on the sustainability of claims made arising out of addition to fixed assets, salary expenses, nature of consultancy expenses and proof of services rendered, allowability of donation etc. The quasi- judicial view of the AO on the subject claims are sorely missing. The course charted by the CIT is founded upon the premise that basic evidence to support the claims are not discernible in records and thus cannot be faulted. The assessment order has been demonstrated by the CIT to be marred by flippancy and non application of mind in relation to these claim under revisional scrutiny. Suffice to say, the CIT has assigned prima facie reasons to cause enquiry into claim of each of such expenses and deduction under dispute. Thus, exercise of power under S. 263 cannot be discredited. It will be expedient at this juncture to note that the action of the CIT is based on “record” present before it. The CIT has merely set aside the disputed claims for de novo assessment. The Assessee is at liberty to assist the Assessing officer in taking the matter to logical conclusion in accordance with law. Mere set aside of the assessment under S. 263 on demonstrable grounds does not cause prejudice to the assessee per se so long as the return of income filed is in accordance with law. The Assessee continues to enjoy fair opportunity to seek fresh assessment in accordance with law. We do not find any thing repugnant in the action of CIT in setting aside the assessment on the points of concerns in relation to various items of expenses and deductions etc. and consequently for causing appropriate enquiry to be made in this regard. The action of the CIT is amenable to S.263 of the Act and thus does not call for any interference. The plea on behalf of the assessee on this score thus requires to be discarded.
|