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2015 (12) TMI 979 - PUNJAB AND HARYANA HIGH COURT

2015 (12) TMI 979 - PUNJAB AND HARYANA HIGH COURT - TMI - Revision u/s 263 - ITAT cancelling the order u/s 263 by holding that the order passed by the Assessing Officer is not erroneous and prejudicial to the interest of revenue where the Assessing Officer had failed to initiate penalty proceedings while completing assessment under Section 153A - Held that:- Initiation of proceedings under Section 263 of the Act was not justified and we uphold the order of the Tribunal cancelling the revisional .....

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Dated:- 29-10-2015 - MR. AJAY KUMAR MITTAL AND MR. SHEKHER DHAWAN, JJ. For The Appellant : Mr. Rajesh Katoch, Advocate For The Respondent : Mr. Ravish Sood, Advocate AJAY KUMAR MITTAL, J. 1. This appeal has been filed by the revenue under Section 260A of the Income Tax Act, 1961 (in short the Act ) against the order dated 26.3.2014 (Annexure A-III) passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as the Tribunal ) in ITA No. 300(ASR)/2013 for the ass .....

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Officer during the course of the assessment proceedings on the ground that due date for filing return includes return filed u/s 139(4) of I.T. Act? 2. Briefly stated, the facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee derives income from real estate business. On 11.12.2008, search and seizure operation under Section 132 of the Act was conducted at the premises of the assessee. Notice under Section 153A of the Act was issued to the assesse .....

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erest of the revenue. The assessment order was cancelled by the CIT on the ground that i) the commission of ₹ 47,925/- had been paid without deduction of TDS and was not allowable; ii) Penalty under Section 271(1)(c) of the Act had not been initiated; and iii) Penalty under Section 271A and 271B of the Act had not been initiated. Accordingly, the CIT directed the Assessing Officer to re-frame the order in accordance with the provisions of the Act. Feeling aggrieved, the assessee filed an a .....

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sment and can be initiated at any time and, therefore, the assessment framed is not effected and there is no scope to apply provisions of Section 263 of the Act. Hence the present appeal by the revenue. 3. Learned counsel for the revenue in support of its case has relied upon the judgment of Allahabad High Court in Commissioner of Income Tax v. Surendra Prasad Agrawal (2005) 275 ITR 113 (All). On the other hand, learned counsel for the assessee has placed reliance upon the judgments in Commissio .....

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d the issue that arises for consideration of this Court in this appeal is could the CIT in exercise of power under Section 263 of the Act hold the order of the Assessing Officer to be erroneous and prejudicial to the interest of the revenue where the Assessing Officer had failed to initiate penalty proceedings while completing assessment under Section 153A of the Act. 6. It may be noticed that the said issue is no longer res integra. This Court in Commissioner of Income Tax v. Subhash Kumar Jain .....

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h and others v. Commissioner of Income Tax (1988) 173 ITR 510 (Gau.) whereas dissenting with the diametrically opposite approach of Madhya Pradesh High Court in Additional Commissioner of Income Tax v. Indian Pharmaceuticals (1980) 123 ITR 874 (MP), Additional Commissioner of Income Tax v. Kantilal Jain (1980) 125 ITR 373 (MP) and Addl. CWT v. Nathoolal Balaram (1980) 125 ITR 596 (MP) had concluded that where the CIT finds that the Assessing Officer had not initiated penalty proceedings under Se .....

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er under s. 263 of the Act pertaining to imposition of penalty where the assessment order under s. 143(3) is silent in that respect. The relevant observations recorded are: It is well established that proceedings for the levy of a penalty whether under s. 271(1)(a) or under s. 273(b) are proceedings independent of and separate from the assessment proceedings. Though the expression "assessment" is used in the Act with different meanings in different contexts, so far as s. 263 is concern .....

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some cases, follow as a consequence of the assessment proceedings. As the Tribunal has pointed out, though it is usual for the ITO to record in the assessment order that penalty proceedings are being initiated, this is more a matter of convenience than of legal requirement. All that the law requires, so far as the penalty proceedings are concerned, is that they should be initiated in the court of the proceedings for assessment. It is sufficient if there is some record somewhere, even apart from .....

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t form part of the assessment proceedings and that the failure of the ITO to record in the assessment order his satisfaction or the lack of it in regard to the leviability of penalty cannot be said to be a factor vitiating the assessment order in any respect. An assessment cannot be said to be erroneous or prejudicial to the interest of the revenue because of the failure of the ITO to record his opinion about the leviability of penalty in the case. 10. Special leave petition against the said dec .....

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