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TMI Blog2023 (5) TMI 629X X X X Extracts X X X X X X X X Extracts X X X X ..... ate. Moreover, in our considered opinion, the Ld PCIT by invoking his revision jurisdiction u/s 263 of the Act cannot direct the ld AO to initiate any penalty proceedings. This aspect is no longer res integra in view of the order of the Rakesh Nain [ 2015 (12) TMI 979 - PUNJAB AND HARYANA HIGH COURT] . When the power of the Ld PCIT in the revision order u/s 263 of the Act is curtailed to even direct the ld AO to initiate penalty proceedings, obviously the Ld PCIT could not have any power, as authorized by law, in directing the ld. AO to initiate penalty proceedings under the correct section. The assessee s case stand in a much better footing than the facts of the case that prevailed before the Hon ble Jurisdictional High Court referred supra. Appeal of the assessee is allowed. - ITA No. 1030/Del/2022 - - - Dated:- 24-4-2023 - SHRI C.M.GARG, JUDICIAL MEMBER AND SHRI M. BALAGANESH, ACCOUNTANT MEMBER For the Assessee : Sh. Sandeep Kumar, CA For the Revenue : Sh. T. James Singson, CIT DR ORDER PER M. BALAGANESH, A. M. 1. This appeal in ITA No.1030/Del/2022 for A.Y. 2017-18 arises out of the order by the Ld. Pr. Commissioner of Income Tax, Faridabad in a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ct penalty provision to be initiated would be u/s 271AAC of the Act and not u/s 270A of the Act. The ld PCIT observed that since the AO had initiated penalty proceedings under a wrong section, the order passed by him u/s 143(3) of the Act dated 15.12.2019 becomes an erroneous order and also prejudicial the interest of the revenue. 4. Aggrieved by this revision order passed u/s 263 of the Act, the assessee is in appeal before us. 5. At the outset, we find the only order passed by the ld AO is quantum assessment order u/s 143(3) of the Act dated 15.12.2019. Though the penalty proceedings were initiated u/s 270A of the Act in the said quantum assessment order itself, no penalty order per se was passed by the ld AO. Since, no appeal has been filed by the assessee against the quantum assessment order, the penalty order ought to have been passed by the ld AO on or before 30.06.2020 in terms of section 275 of the Act. Admittedly, no penalty order was passed by the ld AO on or before 30.06.2020 in the case of the assessee for the assessment order under consideration. We find that the Ld PCIT does not have any grievance in determination of the total income of the assessee in the quant ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 139(4) of I.T. Act? 2. Briefly stated, the facts necessary for adjudication of the instant appeal as narrated therein may be noticed. The assessee derives income from real estate business. On 11.12.2008, search and seizure operation under Section 132 of the Act was conducted at the premises of the assessee. Notice under Section 153A of the Act was issued to the assessee who filed his return of income on 31.3.2009 for the assessment year 2008-09 at Rs. 78,16,530/-. The Assessing Officer framed the assessment vide order dated 8.12.2010 (Annexure A-I) under Section 153A of the Act accepting the returned income. The Commissioner of Income Tax (Central) (for brevity the CIT ) vide order dated 12.3.2013 (Annexure A-II) in exercise of powers under Section 263 of the Act set aside the assessment order holding that the same was erroneous and prejudicial to the interest of the revenue. The assessment order was cancelled by the CIT on the ground that i) the commission of Rs. 47,925/- had been paid without deduction of TDS and was not allowable; ii) Penalty under Section 271(1)(c) of the Act had not been initiated; and iii) Penalty under Section 271A and 271B of the Act had not been ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of Income Tax v. Nihal Chand Rekyan (2000) 242 ITR 45 (Del), Rajasthan in Commissioner of Income Tax v. Keshrimal Parasmal (1986) 157 ITR 484 (Raj), Calcutta in Commissioner of Income Tax v. Linotype Machinery Ltd. (1991) 192 ITR 337 (Cal) and Gauhati in Surendra Prasad Singh and others v. Commissioner of Income Tax (1988) 173 ITR 510 (Gau.) whereas dissenting with the diametrically opposite approach of Madhya Pradesh High Court in Additional Commissioner of Income Tax v. Indian Pharmaceuticals (1980) 123 ITR 874 (MP), Additional Commissioner of Income Tax v. Kantilal Jain (1980) 125 ITR 373 (MP) and Addl. CWT v. Nathoolal Balaram (1980) 125 ITR 596 (MP) had concluded that where the CIT finds that the Assessing Officer had not initiated penalty proceedings under Section 271(1)(c) of the Act in the assessment order, he cannot direct the Assessing Officer to initiate penalty proceedings under Section 271(1)(c) of the Act in exercise of revisional power under Section 263 of the Act. The relevant observations recorded therein read thus:- 9. Now adverting to the second limb, it may be noticed that the Delhi High Court in judgment reported in Addl. CIT vs. J.K.D.'Costa (198 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... al to the interest of the revenue because of the failure of the ITO to record his opinion about the leviability of penalty in the case. 10. Special leave petition against the said decision was dismissed by the Apex Court ((1984) 147 ITR (St) 1. The same view was reiterated by the Delhi High Court in CIT vs. Sudershan Talkies (1993) 112 CTR (Del) 165 : (1993) 201 ITR 289 (Del) and followed in CIT vs. Nihal Chand Rekyan (1999) 156 CTR (Del) 59 : (2000) 242 ITR 45 (Del). The Rajasthan High Court in CIT vs. Keshrimal Parasmal (1985) 48 CTR (Raj) 61 : (1986) 157 ITR 1984 (Raj), Gauhati High Court in Surendra Prasad Singh Ors. vs. CIT (1988) 71 CTR (Gau) 125 : (1988) 173 ITR 510 (Gau) and Calcutta High Court in CIT vs. Linotype Machinery Ltd. (1991) 192 ITR 337 (Cal) have followed the judgment of Delhi High Court in J.K.D's Costa's case (supra). 11. However, Madhya Pradesh High Court in Addl. CIT vs. Indian Pharmaceuticals (1980) 123 ITR 874 (MP) which has been followed by the same High Court in Addl. CIT vs. Kantilal Jain (1980) 125 ITR 373 (MP) and Addl. CWT vs. Nathoolal Balaram (1980) 125 ITR 596 (MP) has adopted diametrically opposite approach. 12. We ..... X X X X Extracts X X X X X X X X Extracts X X X X
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