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2023 (4) TMI 289 - AT - Income TaxRevision u/s 263 - initiation of penalty proceedings u/s.270A and source for FDs with bank, on which, interest income earned by the assessee - HELD THAT:- As per reasons given by the PCIT in the order we find that the AO has issued notice u/s.274 r.w.s.270A of the Act, on 13.12.2019 and called upon the assessee to explain ‘as to why’ penalty should not be levied for under reporting of income. From the notice itself it can be ascertained that the AO has satisfied that he has proceeded with initiation of penalty proceedings for under reporting of income - PCIT is completely erred in coming to the conclusion that the AO has not initiated penalty proceedings u/s.270A with a proper satisfaction. Thus, on this issue, the assumption of jurisdiction by the PCIT fails. Source for FDs with two banks - The issue of FDs with two banks was in the knowledge of the AO. Although, the AO specifically did not discuss the issue of source for FDs, but, after considering the explanation of the assessee that source for FDs is out of sale proceeds of a property in the capacity of power of attorney holder and said sale of property was assessable in the hands of the original owners of the property, the AO has accepted the claim of the assessee and completed the assessment, which is evident from the fact that the AO has made additions towards interest income from very same FD, but does not made any addition towards source for said deposit - Thus the assumption of jurisdictional by the PCIT fails. AO made necessary enquiries and has taken a view. The assessment order passed by the AO is neither erroneous nor prejudicial to the interest of the Revenue. PCIT without satisfying ‘as to how & why’ the assessment order passed by the AO is erroneous in so far as it is prejudicial to the interest of the Revenue, invoked jurisdiction u/s.263 of the Act, and set aside the assessment order - Appeal filed by the assessee is allowed.
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