2025 (3) TMI 1860

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.... Mumbai erred in law as well as on the facts of the case in invoking the provisions of section 263 of the Act and therefore the impugned order dated 30.03.2024 passed under section 263 of Act be quashed. The ld. Pr. CIT Mumbai erred in law as well as on the facts of the case in assuming jurisdiction u/s 263 of the Act by wrongly and incorrectly holding that the A.O. failed to intitate penalty proceedings u/s 270A(9) of the Income Tax Act 1961 hence the assessment order passed by the A.O. on 18.11.2021 u/s 144 r.w.s.144C(3) of the Income Tax Act was erroneous and prejudicial to the interest of the Revenue. The very assumption of jurisdiction is contrary to the provision of law and facts of the record and same be set aside or quashed....

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....ination before us is that as to whether the commissioner had jurisdiction u/s 263 to direct the AO to initiate penalty proceedings against the assessee. To our mind, the answer is "NO" as has been held by Hon'ble Delhi High Court in the case of a CIT Vs Sudarshan talkies, [1993] 200 ITR 153 (Delhi), and as per the decision of the coordinate bench of ITAT in ITA No. 373/CHNY/2021, Coimbatore Vyapari Maathesh Vs ITO The operative portion is contained in para no 6 to 8 and the same is reproduced here in below: 6. We have heard both the parties, perused the materials available on record and gone through the orders of the authority below. The sole basis for the PCIT to assume jurisdiction u/s.263 of the Act, is to initiate penalty proce....

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....ng or misreporting of income. The PCIT had also relied upon the decision of the Hon'ble Allahabad High Court in the case of CIT v. Surendra Prasad Aggarwal reported in [2005] 275 ITR 113 (Allahabad) and held that the revisionary powers can be exercised for initiation of penalty proceedings. We find that although the Hon'ble Allahabad High Court in the case of CIT v. Surendra Prasad Aggarwal (supra), has uphold 263 order passed by the PCIT for initiation of penalty proceedings, but the jurisdictional the Hon'ble Madras High Court in the case of CIT v. Chennai Metro Rail Ltd. (supra), has taken a contrary view after considering the decision of the Hon'ble Allahabad High Court in the case of CIT v. Surendra Prasad Aggarwal (sup....