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TMI Blog2022 (6) TMI 1150X X X X Extracts X X X X X X X X Extracts X X X X ..... he Act by the PCIT, Coimbatore-1 in DIN and order No. ITBA/REV/F/REVS/2021- 22/1035860470(1) dated 24.09.2021 for the above assessment year is contrary to law, facts, and in the circumstances of the case. 2. The PCIT erred in directing the assessing officer to initiate the proceedings for penalty under section 270A of the Act pertaining to re-computation of capital gains without assigning proper reasons and justification. 3. The PCIT failed to appreciate that the power of revision should be reckoned as narrow and ought to have appreciated that the twin conditions of error and prejudice causing to the revenue were not satisfied cumulatively thereby vitiating the revision order completely. 4. The PCIT failed to appreciate that the pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... g addition towards unexplained money u/s.69A of the Act, for Rs.29,09,000/- and additions towards re-computation of long term capital gains by disallowing cost of improvement of Rs.47,74,648/-. The case has been subsequently taken up for revision proceedings and consequently, show cause notice u/s.263 of the Act, dated 28.07.2021, has been issued to the assessee and called upon the assessee to explain, as to why, the assessment order shall not be revised under the provisions of Sec.263 of the Act. In the said show cause notice, the PCIT opined that the assessment order passed by the AO is erroneous and prejudicial to the interest of the Revenue, as the order has been passed with omission to initiate penalty proceedings u/s.270A of the Act, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... gs u/s.270A of the Act, because, he has not arrived at satisfaction to the effect that there is an underreporting or misreporting of income as contemplated u/s.270A of the Act. Therefore, on the issue of initiation of penalty proceedings, the PCIT cannot assume jurisdiction and revised assessment order. In this regard, he relied upon the decision of the Hon'ble Madras High Court in the case of CIT v. Chennai Metro Rail Ltd., reported in [2018] 92 taxmann.com 329. 5. The Ld.DR, on the other hand, supporting the order of the PCIT submitted that the order of the AO is erroneous in so far as prejudicial to the interest of the Revenue, because, the AO has completed assessment proceedings without initiating penalty proceedings u/s.270A of the Ac ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . From the above, what we understand is that although the AO has made additions towards disallowance of cost of improvement, but chosen not to initiate penalty proceedings u/s.270A of the Act, because, prima facie there is no materials with the AO to allege that there is an underreporting or misreporting of income. 7. In the above factual back ground, if you examine the reasons given by the PCIT to revise the assessment order u/s.263 of the Act, we find that the PCIT has set aside the assessment order only for the reasons that the AO has failed to initiate penalty proceedings u/s.270A of the Act, although, there is an observation of underreporting or misreporting of income. The PCIT had also relied upon the decision of the Hon'ble Allahaba ..... X X X X Extracts X X X X X X X X Extracts X X X X
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