KANHAIYA LAL AGRAWAL, KAWARDHA,KAWARDHA vs. PRINCIPAL COMMISSIONER OF INCOME TAX, (CENTRAL), BHOPAL, BHOPAL

ITA 323/RPR/2025Status: DisposedITAT Raipur21 September 2026AY 2021-2215 pages
AI SummaryPartly Allowed

What did the Tribunal hold?

The Tribunal held that the Pr. CIT's power under Section 263 to direct the AO to initiate penalty proceedings under Section 271AAD is valid, as penalty proceedings are discretionary. However, the Tribunal also found that the AO had failed to inquire into the taxability of the unexplained expenditure under Section 115BBE, which was a valid reason for the Pr. CIT's revision.

What were the facts?

The assessee incurred an unexplained expenditure of Rs. 60,00,000/- for land purchase without recording it in the books of accounts. The Assessing Officer (AO) added this amount to the total income but did not consider the applicability of Section 115BBE and initiated penalty proceedings under Section 271AAD.

What were the issues?

Whether the Pr. CIT has the power to direct the AO to initiate penalty proceedings under Section 271AAD, and whether the AO's failure to inquire into the applicability of Section 115BBE renders the assessment order erroneous and prejudicial to the revenue.

Which sections of the Income-tax Act were involved?

Section 263,Section 271AAD,Section 115BBE,Section 69C

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, RAIPUR BENCH, “DB” RAIPUR

Before: SHRI R.K PANDA & SHRI PARTHA SARATHI CHAUDHURY

For Appellant: Shri Devesh Poddar, CA
For Respondent: Shri Rituparna Namdeo, CIT-DR
Hearing: 11.08.2026Pronounced: 21.09.2026

PER PARTHA SARATHI CHAUDHURY, JM: The present appeal preferred by the assessee emanates from the order of the Ld. Pr. CIT (Central), Bhopal dated 29.03.2025 for the assessment year 2021-22 as per the grounds of appeal on record.

2.

The grievance of the assessee are two folds viz. (i) that it is beyond the power of the Ld. Pr. CIT to pass order u/s.263 of the Income Tax Act, 1961 (for short ‘the Act’) directing the A.O to initiate pen

The order continues below.

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