TaxTMI 
TaxTMI 
2021 (7) TMI 299
X X X X Extracts X X X X
X X X X Extracts X X X X
....the order passed by the ld. Pr. Commissioner of Income Tax, under Section 263 of the Act. 03. Brief facts of the case shows that assessee is an Advocate by profession and derives professional income. She filed her return of income on 29.09.2015 declaring total income of Rs. 1,52,77,870/-. This return was revised on 31st December 2016 declaring total income of Rs. 1,97,54,000/-. The case of the assessee was selected for limited scrutiny through computer added selection system and the reasons were: (i) Contract receipt / fees mis-match; (ii) Sales turnover mis-match; and (iii) Tax credit mis-match. 04. So the notice under Section 143(2) of the Act was issued on 20.09.2016. The ld. Assessing Officer accepted the revised return and assessed the total income at Rs. 1,97,54,000/- as per order under Section 143(3) of the Act passed on 31st August, 2017. In the assessment order, the ld. AO did not initiate penalty proceedings under Section 271(1) (c) of the Act. 05. On examination of the record of the assessee, the ld. Pr. CIT noted that the order passed by the AO is erroneous and prejudicial to the interest of Revenue. She found that the assessee has revised the return on 31st D....
X X X X Extracts X X X X
X X X X Extracts X X X X
....nalty proceedings under Section 271(1) (c) of the Act is erroneous in so far as it is prejudicial to the interest of Revenue. She further held that there exists a prima facie case of concealment of income in case of the assessee. Therefore, she directed the Ld Assessing Officer to initiate penalty proceedings under Section 271(1) (c) of the Act for concealment of income and the order of the Assessing Officer was modified to that extent. Such order under Section 263 of the Act was passed on 30.03.2021. 08. Assessee is aggrieved with that order and, therefore, has preferred this appeal. 09. The ld. AR submitted that assessee has revised her return of income within the time available as per law. He further reiterated the submissions made by her before ld AO and Ld PCIT. He repeated submission of assessee vide letter dated 09th January, 2017, which was also placed at page No. 14 of the Paper Book. He submitted that though notice under Section 143(2) of the Act was issued to the assessee on 20.09.2016, however, notice under Section 142(1) of the Act was issued on 23 June 2017 wherein the basic information including the computation of total income, audited accounts, and tax audit repo....
X X X X Extracts X X X X
X X X X Extracts X X X X
....has a different opinion in the matter. He further submitted that even otherwise bonafide omission with reasonable cause could not lead to imposition of penalty. He submitted that even otherwise acting on the professional advice of the expert is a reasonable cause. In the end, he referred to the Press release dated 14 December 2016 of the CBDT, which was with respect to filing of revised Income Tax return, by the taxpayer post-demonetization of currency, which was relied by the LD PIT. He submitted that reliance on the above Press release is de void of any merit as the case of the assessee does not have such facts. Therefore, he submitted that the order passed by the ld. Pr. CIT is un-sustainable and deserves to be set aside. 11. The ld. [CIT]-DR narrated the facts of the case once again and stated that the case of the assessee was selected for scrutiny as there was a mis-match found in the receipts of the profit and loss account with Form No. 26AS. Therefore, it was detected at the time of selection of the case itself. Therefore, on detection of the income shown lesser by the assessee the assessee revised her return of income. Therefore, it was not a case that assessee disclosed b....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ssessment proceedings and the assessment order to expand the scope of these proceedings and to view the penalty proceedings also as part of the proceedings which are being sought to be revised by the CIT. There is no identity between the assessment proceedings and the penalty proceedings; the latter are separate proceedings that may, in some cases, follow as a consequence of the assessment proceedings. As the Tribunal has pointed out, though it is usual for the ITO to record in the assessment order that penalty proceedings are being initiated, this is more a matter of convenience than of legal requirement. All that the law requires, as far as the penalty proceedings are concerned, is that they should be initiated in the course of the proceedings for assessment. It is sufficient if there is some record somewhere, even apart from the assessment order itself, that the ITO has recorded his satisfaction that the assessee is guilty of concealment or other default for which penalty action is called for. Indeed, in certain cases it is possible for the ITO to issue a penalty notice or initiate penalty proceedings even long before the assessment is completed though the actual penalty order c....
X X X X Extracts X X X X
X X X X Extracts X X X X
....ays the part of the order of the assessment. The non-initiation of penalty proceedings by the learned assessing officer makes the order of the learned assessing officer erroneous. He submitted that the various judicial precedents submitted by the learned authorised representative related to the penalty proceedings with respect to late filing of the return etc and subsequently followed for other penalty proceedings. He also referred to the several judicial precedent where it was held that the learned assessing officer is required to record the satisfaction with respect to the initiation of the penalty proceedings. Therefore, it cannot be said that non-initiation of the penalty proceedings is not part of the assessment order. He also stated that penalty proceedings by issue of show cause notice u/s 274 of the act is a separate proceedings thereafter but initiation of the penalty proceedings and recording the satisfaction of the assessing officer are part of the assessment proceedings. Therefore the decisions relied upon by the learned authorised representative should not have been applied. He otherwise stated that there is no alternative left with the revenue wherein the assessing of....
X X X X Extracts X X X X
X X X X Extracts X X X X
....1/del/2019 dated 22/11/2019 deleted the penalty levied by the learned assessing officer. The learned interval Commissioner of income tax issued show cause notice for assuming jurisdiction u/s 263 of the act on 23/3/2021. Therefore, at the time of examination of the record by the learned principal Commissioner of income tax, issue is squarely covered in favour of the assessee by the decision in her own case in previous year, therefore, she was not justified in passing an order on the identical facts by directing the learned assessing officer to initiate the penalty proceedings for concealment of income. Thus on this count also the order of the learned principal Commissioner of income tax is not sustainable. 19. Further more on going through the order passed by the learned principal Commissioner of income tax u/s 263 of the income tax act it is clear-cut that she relied on the president is dated 14 December 2016 issued by the government of India, central board of direct taxes with respect to the filing of income tax return by the taxpayers post de monetization of currency. Those she relied on the paragraph number two of that pretzel in stating that if there is no omission or wrong s....