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TMI Blog2019 (1) TMI 1403X X X X Extracts X X X X X X X X Extracts X X X X ..... enalty order passed by the Ld. CIT-II, Jalandhar is illegal, arbitrary and void abinitio. 2. That the assessee company had correctly shown lease income as "Income from House Property" which was wrongly assessed as "Income from Other sources" without disallowing deduction u/s 24(a) @ 30% and therefore it can not be a case of furnishing inaccurate particulars of income. That in the present case there is only change of head of income which does not tantamount to furnishing inaccurate particulars of income. 3. That under the factual circumstances of the case no penalty u/s 271(1)(c) can be levied when the issue is debatable and explanation to given by the assessee was bonafide. 4. That the impugned order passed u/s 263 wherein lease Income had been assessed as income from "Other Sources" is based on interpretation of expression "Buildings and Lands Appurtenant thereto" and is highly contentious debatable and involves substantial question of law and in such circumstances penalty u/s 271(1)(c) is not leviable. 5. That the claim of the assessee to assess lease income as Income from "House Property" has not been disapproved by the Revenue and same can not qualify as a false claim a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... at Rs. 14,14,028/. Aggrieved, the assessee unsuccessfully assailed the assessment in appeal before the CIT(A). 4. The assessee being aggrieved with the order of the CIT(A) carried the matter in appeal before the Income Tax Appellate Tribunal (for short 'Tribunal'). The Tribunal, vide its order passed while disposing off the appeal of the assessee in ITA No. 368/Asr/2015, dated 04.02.2016 for A.Y. 2006-07, remitted the matter to the file of the A.O for deciding the same afresh, in accordance with law, after taking into consideration the material that was placed on record by the assessee before it. 5. The A.O in the course of the 'set aside' proceedings did find favour with the claim of the assessee that a building existed on the piece of land that was leased by the assessee and the same was being used by the lessee, though there was no mention of the same in the 'Agreement of lease'. In the backdrop of his aforesaid facts, the A.O being of the view that it stood established that the property let out by the assessee comprised of building and land appurtenant thereto, thus concluded that the lease rent had rightly been shown by the assessee under the head "Income from House propert ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of satisfaction in his order passed under Sec. 263 of the I.T. Act, dated 17.05.2017. It was the contention of the Ld. A.R that though the Pr. CIT in his order passed under Sec. 263, dated 17.05.2017 had initiated the penalty proceedings under Sec. 271(1)(c) for furnishing inaccurate particulars of income, however no satisfaction on his part that the assessee had furnished inaccurate particulars of its income was discernible from the said order. The Ld. A.R submitted that though as per Sec. 271(1B) the direction for initiation of penalty proceedings under clause (c) of Sub-section (1) of Sec. 271 in the assessment or reassessment order shall be deemed to constitute satisfaction of the A.O for initiation of the penalty proceedings under the aforesaid statutory provision, however, the same cannot be extended to a case where such penalty proceedings are initiated by a Principal Commissioner of Income Tax or Commissioner of Income Tax. The Ld. A.R in order to drive home his contention took us through Sec. 271(1B) and drew our attention to the fact that the same was applicable only in a case where the penalty proceedings were initiated by an assessing officer. Further, the Ld. A.R took ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of the I.T. Act. We are persuaded to subscribe to the contention advanced by the Ld. A.R that the cushion provided by Sec. 271(1B) is only in respect of the penalty proceedings initiated by an "Assessing officer", and the same would not be applicable to those initiated by a Principal Commissioner of Income Tax. The aforesaid claim of the Ld. A.R is fortified from the fact that a Principal Commissioner of Income Tax does not fall within the realm of the definition of "Assessing officer" as envisaged in Sec. 2(7A) of the I.T. Act. In sum and substance, the failure on the part of a Principal Commissioner of Income Tax to record his satisfaction as to furnishing of inaccurate particulars of income or concealment of income would continue to have a material bearing on the validity of the jurisdiction assumed by him under Sec. 271(1)(c), which as observed by us hereinabove, would not be curable by taking recourse to Sec. 271(1B) of the I.T. Act. Our aforesaid view is fortified by the order of the Tribunal in Pradeep Publications Vs The Asstt. CIT (ITA No. 483(Asr)/2005, dated 04.05.2007 and ACIT Vs. Pradeep Publications (2010) 130 TTJ 92 (UO)(Asr). 12. In the case before us, as the Pr. ..... X X X X Extracts X X X X X X X X Extracts X X X X
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