TaxTMI 
TaxTMI 
2024 (9) TMI 1962
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....ent Centre (NFAC) (in short, ld. AO) passed u/s 147 r.w.s. 144B of the IT Act, dated 30.03.2022. 2. The grounds of appeal raised by the assessee in the present appeal are culled out as under: "1. In the facts and circumstances of the case and in law, learned Pr. Commissioner of Income-tax has erred in passing order u/s 263 of the Income-tax Act, 1961 and in setting aside assessment order dated 30.03.2022 passed u/s 147 of the Act and issuing directions to reframe the assessment denovo. 2. In the facts and circumstances of the case and in law, learned Pr. Commissioner of Income-tax has erred in passing order u/s 263 of the Income-tax Act, 1961 for initiating penalty proceedings u/s 241(1)(c)of the Income-tax Act, 1961. ....
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....to the interests of revenue. 4. During the revisionary proceedings on being show-caused, reply to the aforesaid observations by the ld. PCIT was furnished by the assessee on 18.03.2024, however, the same was not found convincing by the ld. PCIT, therefore, the order of Ld AO was held erroneous as well as prejudicial to the interest of revenue, thus, have set aside the proceedings to the files of the Ld AO with the direction to pass fresh assessment order in speaking manner after making all necessary enquiries required, after providing due and adequate opportunity of being heard to the assessee, after considering all the submissions etc. made in counter-reply submitted by the assessee in a fair and judicious manner. 5. Aggrieved with t....
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.... Linotype & Machinery Ltd. [1991] 192 ITR 337 (Cal.) and Gauhati in Surendra PrasadSingh v. CIT [1988] 173 ITR 510/40 Taxman 346 (Gau.) whereas dissenting with the diametrically opposite approach of Madhya Pradesh High Court in Addl. CIT v. Indian Pharmaceuticals [1980] 123 ITR 874 (MP.),Addl. CIT v. Kantilal Jain [1980] 125 ITR 373/[1981] 5 Taxman 92 (MP.) and Addl. CWT v. NathoolalBalaram [1980] 125 ITR 596/3 Taxman 170 (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 26....
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....ted, this is more a matter ofconvenience than of legal requirement. All that the law requires, so far as the penalty proceedingsare concerned, is that they should be initiated in the court of the proceedings for assessment. It issufficient if there is some record somewhere, even apart from the assessment order itself, that the ITO has recorded his satisfaction that the assessed 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 cannot be passed until the assessment finalised. We, therefore, agree with the view taken by the Tri....
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....opteddiametrically opposite approach. 12. We are in agreement with the view taken by the High Courts of Delhi, Rajasthan, Calcutta andGauhati, and express our inability to subscribe to the view of Madhya Pradesh High Court. 13. Accordingly, it is held that the initiation of proceedings under s. 263 was not justified. The Tribunalwas right in holding that after examining the record of the assessment in exercise of powers under s.263, where the CIT finds that the AO had not initiated penalty proceedings, he cannot direct the AO to initiate penalty proceedings under s. 271(1)(c) of the Act." 7. In view of the above, equally we are unable to subscribe to the view adopted by Allahabad High Court in Surendra Prasad Agga....