2024 (2) TMI 1582

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.... above case is framed as follows:- Whether the Tribunal misdirected itself in finding, no satisfaction in initiation of penalty proceedings having been recorded in the assessment order; when the satisfaction was recorded and a penalty proceeding initiated, which was dropped on the modifications made in the first appeal against the assessment order, which order of dropping the penalty proceeding was revised under Section 263 of the Income Tax Act, 1961. 2. We heard learned counsel for the assessee Sr. D.V. Pathy and the learned Standing Counsel for the Department Smt. Archana Sinha. 3. The facts leading to the above appeal arise from the assessment order of 2004-05. The assessee, who is the appellant herein, was a firm engaged in the dea....

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....to challenge the order under Section 263 was that the Commissioner could not have interfered with the dropping of proceedings, since it is not an assessment order and hence it is not an order revisable under Section 263. The Division Bench after considering a host of decisions of this Court and various High Courts found that dropping of the penalty proceedings by an order, is definitely revisable under Section 263. It was found that Section 263 employs the word 'any order' and 'in any proceeding under the Act' which was held to have a wide connotation. The ambit and sweep of Section 263 includes the orders of either dropping the proceedings or initiating any proceedings, which could be revised. Revising the order and dropping the proceeding....

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....ng concealed particulars of income or furnished inaccurate particulars, before he initiates penalty proceedings. The cited decision also referred to the decision of the Hon'ble Supreme Court in MAK Data Private Ltd. v. Commissioner of Income Tax reported in (2013) 358 ITR 593, wherein it was held that the Assessing Officer in recording such prima facie satisfaction, is not obliged to do it in a particular manner or even reduce it into writing. Even from a mere reading of the assessment order, satisfaction if clearly discernible that would be sufficient. There can be no flaw found in the subsequent initiation of penalty proceedings. That satisfaction has to be arrived at when the assessment is pending, is undisputed, which admittedly was rec....