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TMI Blog2015 (8) TMI 693X X X X Extracts X X X X X X X X Extracts X X X X ..... essee is against the revision order passed by CIT u/s. 263 of the act for revising the assessment framed by AO. For this, assessee has raised following effective ground no.2: "2. That the proposed initiation of penalty is beyond the purview and scope of section 263." 3. We have heard both the sides and gone through facts and circumstances of the case. At the outset, Ld. Counsel for the assessee stated that he is challenging only the issue of initiation of penalty proceedings u/s. 271D of the Act for violation of section 269SS of the Act in the revision order passed by CIT u/s. 263 of the Act. He drew our attention to para 10 and 10.1 of section 263 order, which read as under: "10. It IS also found from the records that the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... IT v. J. K. D'Costa [1982] 133 ITR 7. 7. There also a similar question arose and the Commissioner of Income-tax invoked the provisions of Section 263 of the Act. The Division Bench of the Delhi High Court held as follows (at p. 11) : "The only question before us is whether the Tribunal was right in revoking the order of the Additional Commissioner in so far as it pertains to the question of penalties under Sections 271(1)(a) and 273(b). Here, we find ourselves in complete agreement with the view taken by the Tribunal. It is well-established that, proceedings for the levy of penalty whether under Section 271(1)(a) or under Section 273(b) are proceedings independent of and separate from the assessment proceedings. Though the expressio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he actual penalty order cannot be passed until the assessment is finalised. We, therefore, agree with the view taken by the Tribunal that the penalty proceedings do not form part of the assessment proceedings and that the failure of the Income-tax Officer to record in the assessment order his satisfaction or the lack of it in regard to the leviability 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 interests of the Revenue because of the failure of the Income-tax Officer to record his opinion about the leviability of penalty in the case." Finally, Hon'ble Calcutta High Court has decided the issue in para 9, 10 and 11 as under: "9. Pe ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r the lack of it, the assessment order cannot be said to be erroneous or prejudicial to the interests of the Revenue. The Income-tax Officer must record his opinion about the leviability of the penalty on the facts of the case. The Income-tax Officer has to be satisfied that the assessee had furnished a statement of advance tax payable by him which he knew or had reason to believe to be untrue. 11. The Commissioner of Income-tax held that the Income-tax Officer should have taken action under Section 273(a) because the assessee failed to file a revised estimate, under Section 212(2) and pay tax accordingly. The Commissioner of Income-tax also held that the assessee did not file any explanation for failure to file a proper revised estimate ..... X X X X Extracts X X X X X X X X Extracts X X X X
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