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TMI Blog2018 (3) TMI 1586X X X X Extracts X X X X X X X X Extracts X X X X ..... in its entirety. - Decided in favour of assessee. - Tax Case (Appeal) No.745 of 2017 - - - Dated:- 30-1-2018 - MS. INDIRA BANERJEE, CJ And MR.JUSTICE ABDUL QUDDHOSE For the Appellant : Mrs.R.Hemalatha Standing Counsel For the Respondent : Mr.M.P.Senthilkumar JUDGMENT ( Delivered by the Hon'ble Chief Justice ) This appeal filed by the Commissioner of Income Tax, Chennai is against an order dated 23rd April 2017 passed by the Income Tax Appellate Tribunal A Bench, Chennai allowing the appeal being I.T.A.No.2231 of 2016 and dismissing I.T.A.Nos.2230 2232 of 2016 pertaining to the assessment year 2011-12. 2. The respondent Assessee, M/s.Chennai Metro Rail Limited, is a Government company within the meaning of Section 617 of the Companies Act, 1956. The company filed its income tax return for the assessment year 2011-12 on 11th January 2012 claiming refund of ₹ 19,44,490/-. Later, on 26th February 2013, the respondent Assessee filed a revised return claiming refund of ₹ 2,10,91,390/-. 3. The case of the respondent Assessee was selected for scrutiny and notice was issued under Section 143(2) of the Income Tax Act, 1961 (hereinafter referre ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o initiate penalty during the course of Assessment renders the assessment order erroneous and prejudicial to the interest of the revenue. 6.If in any proceeding of the assessment, the Assessing Officer fails to take notice of the facts attracting the provisions contained u/s 271(1)(c) of the Act, it could not be said that his failure to take notice of the facts which were before him attracting the provisions of section 271(1)(c) of the Act does not amount to an error prejudicial to the interest of the revenue. Therefore, if an Assessing Officer during the pendency of the proceeding has omitted to take notice of the facts attracting section 271(1)(c) of the Act which ultimately ended in an order of assessment, the order would be erroneous and prejudicial in the interest of revenue. 6.In view of the above, it is held that, the assessment order u/s 143(3) passed by the assessing officer for A.Y. 2011-12 is erroneous and prejudicial to the interest of the public revenue. Hence the Assessing Officer is directed to reframe the assessment afresh in accordance with the provisions of law. 7. The respondent Assessee filed an appeal being I.T.A.No.2231 of 2016 against the order ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... by the Commissioner on the ground that dropping of the penalty proceeding would amount to prejudicial to the interest of the Revenue. However the Commissioner cannot direct the Assessing Officer to initiate the penalty proceedings itself. Therefore, this Tribunal is of the considered opinion that the Commissioner is not justified in directing the Assessing Officer to initiate the penalty proceeding under Section 271(1)(c) of the Act. Accordingly, the order of the Principal Commissioner is set aside and the appeal of the assessee is allowed. 9. Being aggrieved, the Revenue has filed the instant appeal. The question of law raised in this appeal is whether the Commissioner could have directed the Assessing Officer to initiate penalty proceedings when the Assessing Officer had not arrived at any finding in this regard? 10. Learned Standing Counsel appearing on behalf of the Revenue has referred to Section 263 of the Act, which provides as follows: Revision of orders prejudicial to revenue. 263.(1) The Principal Commissioner or Commissioner may call for and examine the record of any proceeding under this Act, and if he considers that any order passed therein by the Ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in accordance with any order, direction or instruction issued by the Board under section 119; or (d) the order has not been passed in accordance with any decision which is prejudicial to the assessee, rendered by the jurisdictional High Court or Supreme Court in the case of the assessee or any other person.] (2) No order shall be made under sub-section (1) after the expiry of two years from the end of the financial year in which the order sought to be revised was passed. (3) Notwithstanding anything contained in sub-section (2), an order in revision under this section may be passed at any time in the case of an order which has been passed in consequence of, or to give effect to, any finding or direction contained in an order of the Appellate Tribunal, National Tax Tribunal, the High Court or the Supreme Court. Explanation. In computing the period of limitation for the purposes of sub-section (2), the time taken in giving an opportunity to the assessee to be reheard under the proviso to section 129 and any period during which any proceeding under this section is stayed by an order or injunction of any court shall be excluded. 11. Section 263 of the Act empow ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... to the computation of his total income have been disclosed by him, then, the amount added or disallowed in computing the total income of such person as a result thereof shall, for the purposes of clause (c) of this sub-section, be deemed to represent the income in respect of which particulars have been concealed. Explanation 2. Where the source of any receipt, deposit, outgoing or investment in any assessment year is claimed by any person to be an amount which had been added in computing the income or deducted in computing the loss in the assessment of such person for any earlier assessment year or years but in respect of which no penalty under clause (iii) of this sub-section had been levied, that part of the amount so added or deducted in such earlier assessment year immediately preceding the year in which the receipt, deposit, outgoing or investment appears (such earlier assessment year hereafter in this Explanation referred to as the first preceding year) which is sufficient to cover the amount represented by such receipt, deposit or outgoing or value of such investment (such amount or value hereafter in this Explanation referred to as the utilised amount) shall be t ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... otal income assessed as per the provisions contained in section 115JB or section 115JC; D = amount of tax that would have been chargeable had the total income assessed as per the provisions contained in section 115JB or section 115JC been reduced by the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished: Provided that where the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished on any issue is considered both under the provisions contained in section 115JB or section 115JC and under general provisions, such amount shall not be reduced from total income assessed while determining the amount under item D : Provided further that in a case where the provisions contained in section 115JB or section 115JC are not applicable, the item (C - D) in the formula shall be ignored; (b) where in any case the amount of income in respect of which particulars have been concealed or inaccurate particulars have been furnished has the effect of reducing the loss declared in the return or converting that loss into income, the amount of tax sought to be evade ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... her valuable article or thing found in his possession or under his control, has been acquired out of his income which has not been disclosed so far in his return of income to be furnished before the expiry of time specified in sub-section (1) of section 139, and also specifies in the statement the manner in which such income has been derived and pays the tax, together with interest, if any, in respect of such income. Explanation 5A. Where, in the course of a search initiated under section 132 on or after the 1st day of June, 2007, the assessee is found to be the owner of (i) any money, bullion, jewellery or other valuable article or thing (hereafter in this Explanation referred to as assets) and the assessee claims that such assets have been acquired by him by utilising (wholly or in part) his income for any previous year; or (ii) any income based on any entry in any books of account or other documents or transactions and he claims that such entry in the books of account or other documents or transactions represents his income (wholly or in part) for any previous year, which has ended before the date of search and, (a) where the return of income for such ..... X X X X Extracts X X X X X X X X Extracts X X X X
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