TMI Blog2016 (10) TMI 216X X X X Extracts X X X X X X X X Extracts X X X X ..... ORDER PER PRADIP KUMAR KEDIA, AM : The captioned appeal filed by the assessee is directed against the order of the Commissioner of Income Tax-V, Pune (in short the Commissioner ), dated 28.03.2014 whereby the assessment order passed by the Assessing Officer in relation to assessment year 2009-10 passed under section 143(3) of the Income Tax Act, 1961 (in short the Act ) dated 26.12.2011 was held to be erroneous in so far as it was prejudicial to the interests of the Revenue within the meaning of section 263 of the Act. 2. The short facts are that the assessee is engaged in the business as promoters, builders and civil contractors. The assessment order under section 143(3) of the Act in respect of assessment year 2009-10 was passed on 26.12.2011 determining the total income at ₹ 3,16,27,430/-. The Commissioner under its supervisionary jurisdiction noticed that the assessee has filed return of income on 29.10.2009 showing income of ₹ 28,72,910/- and thereafter a revised return was filed on 14.10.2010 declaring total income of ₹ 95,55,430/-. The Assessing Officer, while framing the assessment under section 143(3) based on revised return, made cer ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... unt with . He has discussed the set of Creditors submitted before him in a different grouping in the assessment order at Para 4.1.1. The total of these groupings comes at ₹ 10,08,23,000/-. It is not understood how this new grouping has been arrived at. Which of the items of the original Balance Sheet is included under which grouping. The AO has thereafter proceeded to discuss these new grouping to arrive at different additions described above. In view of the aforesaid appearing in the records, it is clear that the AO has not completed the assessment after proper verification and reconciliation. He has not carried out the necessary verifications and scrutiny as was demanded by the materials available in record before him in this case. 3. In addition to the above, the Asset side of the Balance Sheet also reveal that there are figures like Advance for land of ₹ 11,66,78,524/-. Closing WIP etc., which have not been examined by the AO properly. 4. In addition to the above it is further noted that the break-up of advances against land received appearing on the Liability side of ₹ 6,21,22,000/- has been given comprising of 45 persons. Confirmations of approx ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... .Y. 2009-2010 was erroneous in so far as it is prejudicial to the interest of revenue. 4. After considering the reply of the assessee, The Commissioner was of the view that the impugned assessment order under section 143(3) dated 26.12.2011 is erroneous in so far as it is prejudicial to the interests of the Revenue mainly on two grounds (i) assessment was completed in haste and (ii) no penalty proceedings under section 271(1)(c) were initiated on additions made. He accordingly set-aside the whole assessment and directed the Assessing Officer to re-do the same in terms of his order under section 263 of the Act. 5. Aggrieved by the order of the Commissioner, the assessee is in appeal before the Tribunal by raising the following Grounds of Appeal :- 1. The learned CIT -V, Pune has erred in law and on facts in assuming jurisdiction u/s 263 of the ITA, 1961 on the analogy that the 143(3) order dated 26/12/2011 was erroneous and prejudicial to the interest of revenue. 2. The learned CIT-V, Pune erred in law in setting aside the assessment order u/s 143(3) assuming the same as incomplete and erroneous as it was completed in haste and without examining and dealing with ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... which are in favour of the assessee. He submitted that while the Hon ble Allahabad High Court has taken a adverse view, the decision in favour of the assessee is rendered in Rakesh Nain Trivedi s case (supra) where large number of cases of different High Courts for and against, has been taken into account. The Ld. AR, drawing analogy from the decision of the Hon ble Bombay High Court in the case of CIT vs. Gabriel India Ltd., 203 ITR 108 (Bom.), sought to contend that the conclusion of the Assessing Officer in not initiating the penalty proceedings in the facts of the case cannot be termed as erroneous simply because the Commissioner does not agree with his conclusion. The additions were made with reference to offer made by the assessee in this regard only. In the light of various judicial precedents on the issue, the Ld. AR contended that direction of the Commissioner for consideration of initiation of the penalty proceedings is beyond the scope of section 263(1) of the Act and therefore deserves to be set-aside. 7. The Ld. Departmental Representative (DR) for the Revenue Shri A. S. Singh, on the other hand, relied upon the decision of the Hon ble Allahabad High Court in th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hat while exercising powers under Section 263, CIT is not competent to direct initiation of penalty proceedings under s.271(1)(a) or s.273(2)(c) of the Act. In the case of CIT v. Parmanad M.Patel (supra), Hon'ble jurisdictional High Court has held that the CIT is not empowered to record satisfaction by invoking s.271(1)(c) of the Act and if he is not entitled to do so, on his own, he cannot do it by directing the assessing authority. The Court observed that in other words, what the CIT himself cannot do, he cannot get it done though the assessing authority by exercising revisional powers. 9. In view of large number of cases decided in favour of the assessee as noted above, we are inclined to respectfully follow the ratio of these decisions in preference to the observations made by the Hon ble Allahabad High Court in the case of Associated Contractors Corporation (supra). In view of the above, the direction of the Commissioner to initiate penalty proceedings under section 271(1)(c) of the Act while setting-aside the assessment requires to be cancelled. We do so accordingly. However, we decline to interfere with the observations of the Commissioner holding the assessment order ..... X X X X Extracts X X X X X X X X Extracts X X X X
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