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2021 (12) TMI 746 - AT - Income TaxPenalty u/s 271(1)(c) - initiating penalty proceeding u/s 271(1)(c) while assuming jurisdiction u/s 263 - HELD THAT:- The facts are not in disputed. No doubt, the AO has initiated the penalty proceedings in the original assessment order passed under section 143(3) of the Act dated 26.03.2013. AO while reframing the assessment in lieu of appeal effect to the order of the Tribunal passed order under section 143(3) read with section 254 of the Act dated 28.12.2018 has not initiate the penalty proceedings. The question arises whether the revision proceedings for initiation of penalty proceedings can be done in the set aside assessment. We noted that the entire jurisprudence on the above subject is against Revenue and in favour of assessee and more particularly Hon’ble Punjab and Haryana High Court has considered this issue and finally, after considering the authorities, held that the initiation of proceedings under section 263 of the Act is not permissible because initiation of penalty proceedings is highly debatable issue. We are of the view that the CIT cannot set aside the Assessment Order for the sole purpose of initiating penalty proceedings in exercise of revisional jurisdiction. Hence, we quash the revision order passed by the PCIT and allow the appeal of the assessee.
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