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2023 (8) TMI 673 - AT - Income TaxRevision u/s 263 - non-initiation of penalty u/s 271B - HELD THAT - We find that submissions of assessee in this regard are cogent. The case laws cited duly establish that no issue of satisfaction by the AO is required for initiating this penalty. Hence, this plank of revision is not sustainable and we set aside the order of Pr.CIT in this regard. Non-disallowance of loss on sale of tower - It is duly emanating that this aspect was raised on the basis of audit objection. The case laws cited by assessee duly establish that revisionary power u/s 263 cannot be initiated on the basis of audit objection. Hence, we set aside the order passed by the ld. Pr.CIT on this issue. Disallowance of statutory dues not paid before the due date of return - We find that ld. Counsel has fairly conceded that he will not be contesting this aspect. Hence, revision order is sustained on this issue. Appeal filed by the assessee is partly allowed.
Issues involved:
The judgment involves the following issues: 1. Setting aside of the assessment order under section 263 of the Income Tax Act, 1961. 2. Non-initiation of penalty u/s 271B in the assessment order. 3. Disallowance of capital expenditure on the loss of sale of towers. 4. Disallowance of statutory liabilities of service tax and WCT. Issue 1: Setting aside of the assessment order under section 263 of the Income Tax Act, 1961: The Principal Commissioner of Income Tax (Pr.CIT) set aside the assessment order passed by the Assessing Officer (AO) as being erroneous and prejudicial to the interest of revenue. The issues left unverified by the AO included failure to initiate penalty u/s 271B, non-disallowance of capital expenditure on the loss of sale of towers, and disallowance of statutory liabilities of service tax and WCT. The Pr.CIT directed the AO to pass a speaking order as per law, leading to the appeal by the assessee. Issue 2: Non-initiation of penalty u/s 271B in the assessment order: The assessee contested the Pr.CIT's order on the grounds that the initiation of penalty u/s 271B need not be done during the assessment proceedings, as supported by various judicial pronouncements. The Counsel argued that the penalty is de hors the assessment order and does not require the satisfaction of the AO. The Tribunal found the submissions of the Counsel cogent and set aside the Pr.CIT's order in this regard. Issue 3: Disallowance of capital expenditure on the loss of sale of towers: The issue of non-disallowance of capital loss on the sale of towers was raised based on an audit objection. The Counsel for the assessee cited case laws to support that revision under section 263 cannot be initiated solely on the basis of an audit objection. The Tribunal agreed with the Counsel's arguments and set aside the Pr.CIT's order on this issue. Issue 4: Disallowance of statutory liabilities of service tax and WCT: The Counsel for the assessee agreed not to contest the disallowance of statutory liabilities on account of service tax and WCT. The Tribunal acknowledged this concession and upheld the revision order on this issue. Conclusion: The Tribunal partly allowed the appeal filed by the assessee, setting aside the Pr.CIT's order regarding the initiation of penalty u/s 271B and the disallowance of capital expenditure on the loss of sale of towers. However, the revision order was sustained on the issue of disallowance of statutory dues not paid before the due date of return.
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