TMI Blog2022 (4) TMI 100X X X X Extracts X X X X X X X X Extracts X X X X ..... discretion with the Assessing Officer as to whether or not the assessee is to be visited with penalty under the said statutory provision. Backed by the aforesaid position of law, we are of the considered view that the Pr. CIT could not have in exercise of his revisionary jurisdiction u/s 263 of the Act stepped in to control or, in fact steer such discretion of the Assessing Officer. Our aforesaid view that where the CIT finds that the Assessing Officer had not initiated penalty proceedings in the assessment order, then, he cannot in exercise of his revisionary jurisdiction u/s 263. Not only the Pr. CIT had on the basis of a misconceived reading of the position of law directed the Assessing Officer to initiate penalty proceedings in the case of the assessee u/s 271AAB of the Act, but he had also exceeded his jurisdiction while issuing such directions. We, thus,not being able to persuade ourselves to subscribe to the aforesaid view taken by the Pr. CIT set-aside the order passed by him u/s 263 of the Act, dated 10.12.2020 and restore the order passed by the Assessing Officer u/s 153A r.w.s.143(3) - Decided in favour of assessee. - ITA No. 02/NAG/2021 - - - Dated:- 30-3-2022 - ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... order of assessing officer merged with the order of CIT(A) therefore order passed u/s.263 is unjustified, unwarranted and excessive. 7. The Pr. Commissioner of Income Tax, Nagpur-2 erred in not accepted that the penalty cannot be imposed after expiry of period of 6 months from the date of assessment order u/s.275. In case of assessee assessment order was passed on 27.12.2018 penalty has to be initiated at end of the financial year in which assessment proceedings are completed i.e. on or before 31.03.2019, therefore, order passed is illegal, invalid and bad in law. 8. The Pr. Commissioner of Income Tax, Nagpur-2 erred in not accepted that the penalty cannot be initiated u/s.172AAB when penalty u/s.271(1)(c) has been already initiated against the assessee in the order passed u/s.153 r.w.s. 143(3) then against imposing of penalty u/s.172AAB has penalized twice. It amounts to double jeopardy, therefore, order passed is illegal, invalid and bad in law. 9. The Pr. Commissioner of Income Tax, Nagpur-2 has not considered the entire written submission of the assessee and passed the order u/s.263 without going into merits of the case therefore, the order passed is unjustified, unwar ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e culminating the assessment initiated penalty proceedings u/s 271(1)(c) of the Act i.e, as regards the entire amount of cash of ₹ 1.70 crore that was requisitioned u/s 132A of the Act. 4. After culmination of the assessment proceedings the Pr. CIT called for the assessment records of the assessee. Observing, that in a case where search proceedings were initiated under Sec. 132 of the Act i.e, on or after 01.07.2012 but before 15.12.2016, the penalty proceedings would stand governed by Sec. 271AAB of the Act, while for the Assessing Officer had while framing the assessment initiated penalty proceedings u/s 271(1)(c) of the Act, the Pr. CIT was of the view that the Assessing Officer should have initiated penalty proceedings u/s. 271AAB of the Act. Also, it was observed by the Pr. CIT that though the assessee had not substantiated the manner in which the undisclosed income was derived by him, however, the Assessing Officer had not initiated penalty proceedings u/s. 271AAB(1)(b) of the Act as regards the undisclosed income of the assessee amounting to ₹ 1.50 crore. Backed by his aforesaid observations the Pr.CIT was of the view that penalty u/s 271AAB(1)(b) of the Act w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 7. Controversy involved in the present appeal lies in a narrow compass i.e, as to whether or not the Pr. CIT remaining well within the realm of his jurisdiction u/s 263 of the Act has directed the Assessing Officer to initiate penalty proceedings under the correct section and, re-assess the income of the assessee on the basis of a speaking order.? Although the Pr. CIT had culminated his order with a direction to the Assessing Officer to initiate penalty proceedings in the hands of the assessee i.e, under the correct section, but a perusal of his order clearly reveals that he had directed the Assessing Officer to initiate penalty proceedings u/s 271AAB of the Act. In sum and substance, the Pr. CIT was of the view that the Assessing Officer had wrongly initiated penalty proceedings u/s 271(1)(c) of the Act, as the same in the case of a search initiated u/s.132 of the Act i.e, on or after 1st day of July, 2012 but before 15.12.2016 was governed by Section 271AAB of the Act. Our indulgence in the present appeal has been sought by the assessee for adjudicating the sustainability of the order passed by the Pr. CIT u/s. 263 of the Act, wherein, he has in letter and spirit directed the As ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... payable by him,- (a) a sum computed at the rate of thirty per cent of the undisclosed income of the specified previous year, if the assessee- (i) in the course of the search, in a statement under sub-section (4) of section 132, admits the undisclosed income and specifies the manner in which such income has been derived; (ii) substantiates the manner in which the undisclosed income was derived; and (iii) on or before the specified date- (A) pays the tax, together with interest, if any, in respect of the undisclosed income; and (B) furnishes the return of income for the specified previous year declaring such undisclosed income therein; (b) a sum computed at the rate of sixty per cent of the undisclosed income of the specified previous year, if it is not covered under the provisions of clause (a). (2) No penalty under the provisions of section 270A or clause (c) of subsection (1) of section 271 shall be imposed upon the assessee in respect of the undisclosed income referred to in sub-section (1) or sub-section (1A). (3) The provisions of sections 274 and 275 shall, as far as may be, apply in relation to the penalty referred to in this section. Explanation ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ove, now when the provisions of Section 271AAB gets triggered in a case where search is initiated u/s 132 of the Act, therefore, it is difficult for us to comprehend that as to on what basis the Pr. CIT had sought invocation of the same in the case of the assessee before us where cash was requisitioned u/s 132A of the Act. 10. Although the Pr. CIT in the present case before us had duly observed that penalty proceedings u/s 271AAB of the Act are triggered in a case where search proceedings were initiated u/s 132 of the Act, however, he had thereafter wrongly stretched the applicability of the said penal provision to the case before him i.e, a case where cash was requisitioned by the department from the police authorities u/s.132A of the Act and thereafter seized vide Panchanama dated 06.04.2016. As the Pr. CIT has clearly misconceived the scope and gamut of section 271AAB of the Act, therefore, his directions to the Assessing Officer for initiating penalty proceedings under the said statutory provision in the case of the assessee before us cannot be subscribed on our part. 11. On the basis of our aforesaid deliberations, though we are unable to concur with the direction of the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... T v. J.K.D.Costa (1982) 133 ITR 7 (Del) , Commissioner of Income Tax v. Sudershan Talkies (1993) 201 ITR 289 (Del) and Commissioner of Income Tax v. Nihal Chand Rekyan (2000) 242 ITR 45 (Del), Rajasthan in Commissioner of Income Tax v. Keshrimal Parasmal (1986) 157 ITR 484 (Raj), Calcutta in Commissioner of Income Tax v. Linotype Machinery Ltd. (1991) 192 ITR 337 (Cal) and Gauhati in Surendra Prasad Singh 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 Section 271(1)(c) of the Act in the assessment order, he cannot direct the Assessing Officer to initiate penalty proceedings under Section 271(1)(c) of the Act in exercise of revisional power under Section 263 of the Act. The relevant observations recorded therein read thus:- 9. Now adve ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... lity 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 decision was dismissed by the Apex Court ((1984) 147 ITR (St) 1. The same view was reiterated by the Delhi High Court in CIT v. Sudershan Talkies (1993) 112 CTR (Del) 165 : (1993) 201 ITR 289 (Del) and followed in CIT v. Nihal Chand Rekyan (1999) 156 CTR (Del) 59 : (2000) 242 ITR 45 (Del). The Rajasthan High Court in CIT v. Keshrimal Parasmal (1985) 48 CTR (Raj) 61 : (1986) 157 ITR 1984 (Raj), Gauhati High Court in Surendra Prasad Singh Ors. v. CIT (1988) 71 CTR (Gau) 125 : (1988) 173 ITR 510 (Gau) and Calcutta High Court in CIT v. Linotype Machinery Ltd. (1991) 192 ITR 337 (Cal) have followed the judgment of Delhi High Court in J.K.Ds Costas case (supra). 11. However, Madhya Pradesh High Court in Addl. CIT v. Indian Pharmaceuticals (1980) 123 ITR 874 (MP) which has been followed by the same High Court in Addl. CIT v. Kantilal Jain (1980) 125 ITR ..... X X X X Extracts X X X X X X X X Extracts X X X X
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