TMI Blog2023 (1) TMI 1014X X X X Extracts X X X X X X X X Extracts X X X X ..... rent that the Assessing Officer accepted the claim, on the wrong premises. Therefore, the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. To this extent, we confirm the power of revision exercised by the ld. PCIT u/s 263 of the Act. As regards to the direction of the PCIT to the AO to initiate the penalty proceedings u/s 271F of the Act, it is settled position of law that the penalty proceedings should be initiated based on the satisfaction reached by the Assessing Officer and the penalty proceedings cannot be initiated at the instance of the higher authorities. Moreover, we find that the penalty proceedings u/s 271F is independent of the assessment proceedings. Therefore, th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... s.1,50,00,000/- from one Mr. Babban Singh (one of the Directors of the assessee company) and issued 24,000 shares on 31.07.2013 i.e. fully paid up at Rs.725/- each including securities premium of Rs.625/- per share as against face value of Rs.100/- each. The ld. PCIT was of the opinion that the share premium received by the appellant company of Rs.1,28,07,936/- was required to be treated as Income from other sources u/s 56(2)(viib), as the Assessing Officer had failed to enquire into the applicability of the provisions of section 56(2)(viib) of the Act, the ld. PCIT formed an opinion that the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. Further, the ld. PCIT was of the opin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... are premium of Rs.725/- towards consideration of takeover of the business from one Mr. Babban Singh. He submits that the assessment order cannot be termed as erroneous and prejudicial to the interests of the Revenue . As regards to the initiation of penalty proceedings u/s 271F, it is submitted that it is beyond the jurisdiction of the ld. PCIT in exercise of powers of revision u/s 263 to direct the Assessing Officer to initiate penalty proceedings placing reliance on the following decisions : (a) Ahmedabad Electricity Co. Ltd. vs. CIT, 66 Taxman 27 (Bombay). (b) VMT Spinning Co. Ltd. vs. CIT, 74 taxmann.com 33 (P H). (c) CIT vs. Indian Bank, 55 taxmann.com 372 (Madras). 6. On the other hand, ld. CIT-DR placing reliance on t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 1 to 4 of the Paper Book. In response to above query, the appellant filed an explanation stating that the provisions of section 56(2)(viib) have no application to the facts of the present case, not being the company in which the public are substantially interested. Whereas the fact is that the appellant is a company in which the public are not substantially interested. Thus, it is apparent that the Assessing Officer accepted the claim, on the wrong premises. Therefore, the assessment order passed by the Assessing Officer is erroneous and prejudicial to the interests of the Revenue. To this extent, we confirm the power of revision exercised by the ld. PCIT u/s 263 of the Act. As regards to the direction of the ld. PCIT to the Assessing ..... X X X X Extracts X X X X X X X X Extracts X X X X
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