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Facts
The PCIT initiated revisionary proceedings under Section 263 against the assessee's assessment order (passed under Section 147) for AY 2018-19. The PCIT found the assessment order erroneous because the Assessing Officer (AO) had disallowed bogus purchases but failed to initiate penalty proceedings under Section 270A(9) for mis-reporting of income, despite the assessee having taken bogus accommodation entries.
Held
The ITAT held that revisionary powers under Section 263 cannot be exercised solely for directing the initiation of penalty proceedings, as assessment and penalty proceedings are separate. An assessment order is not rendered erroneous merely for not initiating penalty proceedings. The PCIT's order directing initiation of penalty under Section 270A was held to be beyond the powers prescribed by law and unsustainable.
Key Issues
Whether the PCIT can exercise revisionary powers under Section 263 to direct the AO to initiate penalty proceedings under Section 270A(9) when the original assessment order did not initiate such proceedings.
Sections Cited
263, 147, 144, 144B, 270A(9), 37(1), 69C, 270A, 271(1)(c)
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Income Tax Appellate Tribunal, “D” BENCH, AHMEDABAD
Before: SMT. ANNAPURNA GUPTA & SHRI T.R. SENTHIL KUMAR
आदेश की �ितिलिप अ�ेिषत/Copy of the Order forwarded to : 1. अपीलाथ� / The Appellant ��थ� / The Respondent. 2. 3. संबंिधत आयकर आयु� / Concerned CIT 4. आयकर आयु�(अपील) / The CIT(A)- िवभागीय �ितिनिध, आयकर अपीलीय अिधकरण, अहमदाबाद / DR, ITAT, Ahmedabad 5. 6. गाड� फाईल / Guard file. आदेशानुसार/ BY ORDER,
उप/सहायक पंजीकार (Dy./Asstt. Registrar) आयकर अपीलीय अिधकरण, अहमदाबाद / ITAT, Ahmedabad 1.Date of dictation on 04.09.2025 2.Date on which the typed draft is placed before the Dictating Member 04.09.2025 3.Date on which the approved draft comes to the Sr.P.S./P.S. 4.Date on which the fair order is placed before the Dictating Member for Pronouncement 5.Date on which the fair order comes back to the Sr.P.S./P.S 08.09.2025 6.Date on which the file goes to the Bench Clerk 08.09.2025 7.Date on which the file goes to the Head Clerk…………. 8.The date on which the file goes to the Asstt. Registrar for signature on the order…………………… 9.Date of Dispatch of the Order………Date on which the typed draft is placed before the Dictating Member 19.12.2019Other Member…………………Date on which the approved draft comes to