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TMI Blog2023 (9) TMI 424X X X X Extracts X X X X X X X X Extracts X X X X ..... (A)-4, Jaipur is wrong, unjust and has erred in law in directing initiation of penalty proceedings u/s 270A of the IT Act, 1961 against the appellant for alleged mis-reporting of income. 3. That the appellant craves permission to add to or amend to any of the above grounds of appeal or to withdraw any of them. 2. The brief facts of the case are that the assessee company is engaged in business of manufacturing and sale of ornaments and jewellery. It filed return of income for the year under appeal on 11.08.2017 declaring an income of Rs. 2,23,690/-. The case of the assessee was selected for scrutiny and accordingly notice under section 143(2) was issued on 21.09.2018 and served on the assessee. The assessee was also issued notice under section 142(1) of the I.T. Act, 1961 along with questionnaire asking for the information. In compliance to the said notices, the assessee submitted details/information through e-proceedings. The information/details furnished by the assessee were examined by the AO but could not find it acceptable. Finally, the AO completed the assessment under section 143(3) of the IT Act, 1961 at a total income of Rs. 1,06,49,890/- after making addition of Rs. 3 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sed order ex-parte under section 154 of the IT Act directing the AO for initiation of penalty proceedings under section 270 of the IT Act, 1961. Now, aggrieved by the order of ld. CIT (A) dated 27.03.2023, the assessee has preferred this appeal before the Tribunal. 3. Before us, the ld. A/R submitted his written submissions as under :- "Ground Nos. 1 & 2: Both grounds relate to same issue hence clubbed and are dealt together. Ld. CIT(A)-4, Jaipur is wrong, unjust and has erred in law in passing the impugned order u/s 154/ corrigendum in as much as no proceedings were pending before her. In this connection it is submitted that the Ld. Commissioner of Income Tax (Appeals) has no power to issue directions or pass orders in a case where no proceedings are pending before them. The CIT(A) is a quasi-judicial authority and exercises appellate jurisdiction over the orders passed by the Assessing Officer (AO). Their role is to hear appeals filed against the orders of the AO and determine whether the assessment order is correct or not. If there are no pending proceedings or appeals before the CIT(A), they do not have the jurisdiction or authority to issue any directions or pass orders ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Ld. CIT(A) for initiation of penalty proceedings u/s 270A of the IT Act, 1961 and order passed u/s 154 is grossly wrong, invalid, bad in law and without jurisdiction. It is further submitted that there is no mistake apparent from the appeal order passed by the than Ld. CIT(A) and accordingly the rectification order passed by present CIT(A) is without jurisdiction and out of the preview of provisions of section 154 of the IT Act, 1961. For ready reference the provisions of section 154 of the IT Act, 1961 are reproduced herein below:- "(1) With a view to rectifying any mistake apparent from the record an income-tax authority referred to in section 116 may. (a) amend any order passed by it under the provisions of this Act: (b) amend any intimation or deemed intimation under sub-section (1) of section 143; (c) amend any intimation under sub-section (1) of section 2004: (d) amend any intimation under sub-section (1) of section 206CB (1A) Where any matter has been considered and decided in any proceeding by way of appeal or revision relating to an order referred to in sub-section (1), the authority passing such order may notwithstanding anything contained in any law for th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the declared turnover as against the GP rate of 25.38% declared by the assessee. 5.2 On 22.02.2023, the AO issued notice under section 271AAC(1) of the Act, which was replied by the assessee on 25.02.2023 wherein specific plea was raised by stating that penalty under section 271AAC is leviable only if addition is sustained under section 68 of the Act and income is chargeable under section 115BBE of the Act. Since as per the facts of the present case, after appeal effect of the order of the ld. CIT (A), no addition remained sustained, which is chargeable under section 115BBE of the Act, therefore, no penalty under section 271AAC is leviable. 5.3 After the said reply from the assessee, the AO vide his letter dated 15.03.2023 requested the ld. CIT (A) to pass a corrigendum/rectification order for initiating penalty proceedings under section 270A of the Act on the trading addition of Rs. 4,18,406/- sustained by ld. CIT (A) in the appeal order by applying GP rate of 26.63%. 5.4 On considering the entire factual and legal position, we find that the ld. CIT (A) has no power to issue the directions or pass order in a case where "no proceedings are pending" before him. As the ld. CIT ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thstanding that such matter was not raised before the [Commissioner (Appeals)] by the appellant." From the above provisions, it is clear that the ld. CIT (A) has no power to issue direction in case where "no proceedings are pending" before him and thus in this way pendency of proceedings of proceedings is a sine quo non for passing any order by ld. CIT (A). Therefore, in view of the above legal provision, the action of the ld. CIT (A) for initiation of penalty proceedings under section 270A of the Act is not a rectification of order but a revision of appeal order earlier passed by his predecessor CIT (A) which is not permissible under the provisions of the IT Act. Therefore, the directions given by ld. CIT (A) for initiation of penalty proceedings under section 270A of the Act and in this regard order passed under section 154 of the Act is palpably wrong, invalid and bad in law and without jurisdiction. There is a difference between rectification of an order and revision of an order. The rectification of any mistake can only be passed in order to put something right. However, revision means, the changing of something in order to correct or improve it. Thus, in our view, any chang ..... X X X X Extracts X X X X X X X X Extracts X X X X
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