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2023 (12) TMI 581 - AT - Income TaxRevision u/s 263 - as per CIT AO did not initiate penalty proceedings u/s 271(1)(c) as the same is prejudicial to the interest of the Revenue, if any, has to be proved with reference to the assessment order only - HELD THAT:- Having regard to the contentions on either side, we find the issue that arises for consideration in these appeals is, whether the PCIT, in exercise of power u/s 263 of the Act, while holding the order of the AO to be erroneous and prejudicial to the interest of the Revenue for AO not initiating penalty proceedings while completing assessment u/s 143(3) of the Act. This issue is no longer res integra. In the case of Sri Adithya Homes Private Limited [2023 (7) TMI 1330 - ITAT HYDERABAD] a Co-ordinate Bench of the Tribunal having noticed the decision in the case of Rakesh Nain Trivedi [2015 (12) TMI 979 - PUNJAB AND HARYANA HIGH COURT] and also the line of decisions following the view of Indian Pharmaceuticals [1978 (10) TMI 12 - MADHYA PRADESH HIGH COURT] and ACIT vs. Kantilal Jain [1979 (10) TMI 37 - MADHYA PRADESH HIGH COURT] etc., relied on the decision of Vegetable Products Ltd [1973 (1) TMI 1 - SUPREME COURT] held the issue in favour of the assessee, stating that in case of more than one interpretation of taxing statute is possible, then the interpretation which favours the assessee, more particularly when it pertains to penalty, has to be adopted. Since the facts are identical, respectfully following the view taken by the Co-ordinate Bench of the Tribunal in the case of Sri Adithya Homes Private Limited [2023 (7) TMI 1330 - ITAT HYDERABAD] and the decision of Rakesh Nain Trivedi [2015 (12) TMI 979 - PUNJAB AND HARYANA HIGH COURT] we hold the issue in favour of the assessee.
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