TaxTMI 
TaxTMI 
2026 (8) TMI 823
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....eturn of income for the impugned assessment year. Since the assessee has not filed his return of income and information was available with the department that the assessee has made cash deposit of Rs. 1,26,38,000/- (including through bearer's cheque) as well as withdrawal of cash of Rs. 15,000/- from his bank account maintained with Allahabad Bank, the case of the assessee was reopened as per the provisions of section 147 of the Act. Accordingly, a notice u/s 148 of the Act was issued and served on the assessee in response to which the assessee filed his return of income declaring total income of Rs. 1,44,440/-. The Assessing Officer completed the assessment u/s 147 r.w.s. 144B of the Act vide order dated 08.03.2023 determining the total in....
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.... prejudicial to the interest of Revenue on the ground that AO has not initiated penalty proceeding U/s 270A of the Income Tax Act. 3. On the facts and in the circumstances of the case of the assessee Ld. Pr. CIT was not justified in setting aside the order passed under section 147 by the assessing officer by invoking the provisions of section 263. 4. That appellant craves for reserving the right to amend modify, alter, add or forego any ground of appeal at time before or during the hearing of appeal. 4. The Ld. Counsel for the assessee at the outset referring to the decision of the Hon'ble Punjab & Haryana High Court in the case of CIT (Central), Ludhiana vs. Shri Rakesh Nain Trivedi vide ITA No.290 of 2014 order dated ....
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....initiation of penalty proceedings imposable u/s 271D. Therefore, the order of the Ld. PCIT invoking jurisdiction u/s 263 of the Act is fully justified. 7. We have heard the rival arguments made by both the sides, perused the orders of the Assessing Officer and Ld. PCIT and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us. The only issue to be decided in the present appeal is regarding the validity of the order passed u/s 263 of the Act by the Ld. PCIT on account of non-initiation of penalty proceedings u/s 270A by the Assessing Officer in the assessment order framed u/s 147 r.w.s. 144B of the Act. We find an identical issue had come up before the Hon'ble Punjab & Haryana High C....
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....r of Income Tax v Linotype & Machinery Ltd. (1991) 192 ITR 337 (Cal) and Gauhati in Surendra Prasad Singh and others Commissioner of Income Tax (1988) 173 ITR 510 (Gau) whereas dissenting with the diametrically opposite approach of Madhya Pradesh High Court in Additional Commissioner of Income Tax v Indian Pharmaceuticals (1980) 123 ITR 874 (MP), Additional Commissioner of Income Tax v. Kantilal Jain (1980) 125 ITR 373 (MP) and Addl. CWT v. Nathoolal Balaram (1980) 125 ITR 596 (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 t....
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....ssessment order that penalty proceedings are being initiated, this is more a matter of convenience than of legal requirement. All that the law requires, so far as the penalty proceedings are concerned, is that they should be initiated in the court 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 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 fin....
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....dl. CWT vs Nathoolal Balaram (1980) 125 ITR 596 (MP) has adopted diametrically opposite approach. 12. We are in agreement with the view taken by the High Courts of Delhi, Rajasthan, Calcutta and Gauhati, 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 Tribunal was 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....