DWARKA PRASAD JHAWAR,ADILABAD vs. INCOME TAX OFFICERS ,WARD -1, MANCHERIAL

We have heard learned CIT-DR and perused the case file with his able assistance.

Relevant facts are found to be in a very narrow compass. Learned PCIT’s revision direction under challenge before us term the corresponding section 153A r.w.s. 143(3) assessment dt.30.11.2018 framed in furtherance to the search / seizure operation dt.26.05.2016; as an erroneous one so far as prejudice to the interest of revenue on account of the latter is alleged failure in initiating 271AAB penalty. Mr. Sai vehemently contended in support of the PCIT’s revision directions that such an inaction on the Assessing Officer’s part is very much exigible to 263 revision jurisdiction in view of (2005) 275 ITR 113 (Allahabad) CIT Vs.Sunder Prasad Agrawal.

We find no merit either in the PCIT’s revision direction nor in Revenue’s vehement contention in support thereof. There could hardly be any dispute about the settled legal proposition that an assessment has to be both erroneous and prejudicial to the interest of revenue before the CIT or the PCIT; as the case may be, exercises his revision jurisdiction. And that it is not each and every instance of such an assessment to be made subject to revision proceedings but only those wherein the assessing authority does not adopt one of the two possible views that Malabar Industrial Co. Ltd. Vs. CIT 243 ITR 83 (SC).

We next notice from a perusal of the case file that the Assessing Officer had duly issued his notice dt.30.11.2018 initiating penalty u/s. 271(1(c) of the Act. Mr. Sai at this stage sought to buttress the point that the assessee's objections against non-initiation of section 271AAB are not acceptable in light of section 132A(3)’s stipulation regarding the specified material which is applicable in toto under the impugned penal provision. We see no substance in the Revenue’s instant argument as it is not the PCIT’s case that the relevant facts involved attract herein specific definition of “undisclosed income” in 271AAB Explanation (c) of the Act. He has nowhere held in specific terms that the assessee's alleged disclosed income; if any satisfies the foregoing definition clause so as to attract the impugned section 271AAB penalty proceedings and failure to this extent of the Assessing Officer’s part attracts revision mechanism in issue. We accordingly reverse the PCIT revision directions and accept the assessee's substantive ground(s) to this effect. Ordered accordingly.

This assessee's appeal is allowed in above terms.