https://www.taxtmi.com/caselaws?id=22322 HC upheld the ITAT's decision that the CIT could not invoke revisional jurisdiction under s.263 merely because the ITO did not initiate penalty proceedings under s.273(a). The Court held that initiation of penalty is discretionary and requires the ITO's satisfaction, which may be recorded outside the assessment order, e.g., in the order sheet. Absence of a recorded satisfaction or discussion on penalty in the assessment order does not render the assessment "erroneous and prejudicial to the interests of the Revenue." Since the CIT's assumption that the ITO ought to have initiated penalty was unjustified, the reference was answered in favour of the assessee and against the Revenue. en-us Mon, 03 Jul 1989 00:00:00 +0530 Wed, 03 Dec 2025 19:11:00 +0530 TaxTMI RSS Generator https://www.taxtmi.com/caselaws?id=22322 HC upheld the ITAT's decision that the CIT could not invoke revisional jurisdiction under s.263 merely because the ITO did not initiate penalty proceedings under s.273(a). The Court held that initiation of penalty is discretionary and requires the ITO's satisfaction, which may be recorded outside the assessment order, e.g., in the order sheet. Absence of a recorded satisfaction or discussion on penalty in the assessment order does not render the assessment "erroneous and prejudicial to the interests of the Revenue." Since the CIT's assumption that the ITO ought to have initiated penalty was unjustified, the reference was answered in favour of the assessee and against the Revenue. Case-Laws Income Tax Mon, 03 Jul 1989 00:00:00 +0530 https://www.taxtmi.com/caselaws?id=22322