TMI Blog2019 (8) TMI 51X X X X Extracts X X X X X X X X Extracts X X X X ..... Commissioner of Income Tax -2, Bhopal (in short CIT(A) ), dated 28.02.2018, which is arising out of order u/s 143(3) r.w.s 147 of the Income Tax Act (In short the Act ) dated 30.03.2016 framed by ITO-4(4), Bhopal. 2. Brief facts of the case as culled out from the records are that the assessee is an individual and retired from defence services. He also derives income from house property and income from business and profession. Original return of income was filed on 29.07.2010 showing income of ₹ 3,19,179/- The case was reopened u/s 147 by issuing notice u/s 148 on 24.03.2015 and in pursuance to same, the assessee has filed the return showing income of ₹ 7,43,010/- and attached the tax audit report along with the return. Assessment u/s 143(3)/ 147 was completed vide order dated 30.03.2016. Addition of ₹ 1,00,000/- was made in this assessment. Notice u/s 263 of the Income Tax Act, 1961 was issued by the Principle Commissioner of Income Tax-2, Bhopal on 02.02.2018 for the reasons that the assessee in the return filed in compliance to notice u/s 148 of the Act has increased his income by ₹ 4,05,697/- but the Assessing Officer has not initiated p ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... alternatively ended in an order of assessment being erroneous . 5. Ld. Departmental Representative vehemently argued and supporting the order of Ld. PCIT and also contention made by the Ld. Counsel for the assessee. 6. We have heard rival contentions and perused the records placed before us. Through this appeal the assessee has challenged the order u/s 263 of the Act framed by Ld. PCIT. The facts in brief are that the assessment u/s 143(3) r.w.s. 147 of the Act were4 completed on 30.03.2016 assessing income at ₹ 11,22,890/-. The case was reopened u/s 148 of the Act for mismatch between TDS claimed by the assessee and data available at 26AS. In compliance u/s 148 of the Act the assessee filed revised return of income at ₹ 10,22,892/-. Additions were made by Ld. A.O but he failed to initiate penalty proceedings u/s 271(1)(c) of the Act. Subsequently Ld. PCIT exercising power u/s 263 of the Act observed that the Ld. A.O failed to initiate penalty proceedings u/s 271(1)(c) of the Act and also the assessee has not offered the interest income of income tax refund for taxation. On the basis of these two observations Ld. PCIT held the order of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... and collection of tax. The High Court proceeded upon the view that by saving the Hyderabad Income-tax Act for the purposes of levy, assessment and collection of income-tax, the entire procedure for imposing liability to pay tax and for collection of tax was saved, but penalty not being tax, provisions relating to imposition of and collection of penalty did not survive the repeal of the Hyderabad Income-tax Act. and thereafter following the decision in C. A. Abraham v. ITO [1961] 41 ITR 425 (SC) quoted with approval (at p. 127): The expression 'assessment' used in these sections (provisions of Chapter IV of the Indian Income-tax Act) is not used merely in the sense of computation of income and there is in our judgment no ground for holding that when by Section 44, it is declared that the partners or members of the association shall be jointly and severally liable to assessment, it is only intended to declare the liability to computation of income under Section 23 and not to the application of the procedure for declaration and imposition of tax liability and the machinery for enforcement thereof...By Section 28, the liabili ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... their Lordships of the Supreme Court is not restricted to the mere computation of income and tax but a number of other things and, therefore, in the proceedings for assessment if the ITO fails to take notice of the facts attracting the provisions contained in Section 271(1)(a), it could not be said that his failure to take notice of the facts which were before him attracting the provisions of Section 271(1)(a) does not amount to an error prejudicial to the interests of the revenue. 10. It was contended by learned counsel that even if the ITO omitted to take note of the facts attracting the provisions under Section 271(1)(a) during the proceedings of assessment it may be that some error in the proceedings has been committed. But so far as the order of assessment is concerned, according to learned counsel, failure to take action under Section 271(1)(a) could not be said to be an error if the order of assessment otherwise is found to be in order. This contention of learned counsel for the assessee cannot be accepted in view of the wide meaning given to the term assessment as laid down by their Lordships of the Supreme Court in the cases referred to above. It is als ..... X X X X Extracts X X X X X X X X Extracts X X X X
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