Loading judgment…
No AI summary yet for this case.
Income Tax Appellate Tribunal, AHMEDABAD “A” BENCH
Before: DR. BRR Kumar & Shri T. R. Senthil Kumar
ORDER \nPER: T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-\nThis appeal is filed by the Assessee as against the Revision\norder dated 09.02.2024 passed by the Principal Commissioner of\nIncome Tax, Ahmedabad-1, arising out of the reassessment order\npassed under section 147 r.w.s.144B of the Income Tax Act, 1961\n(hereinafter referred to as ‘the Act') relating to the Assessment Year\n2017-18.\n2. Brief facts of the case is that the assessee is an individual filed\nhis original Return of Income for the Asst. Year 2017-18 on 31-03-\n2017 declaring total income of Rs.72,29,030/-. The assessment\nwas reopened for understatement of sale consideration of Rs.\n66,63,250/- on purchase of residential villa at ‘Kalhaar Blues and\nGreens' project which has escaped assessment and brought to tax.\nThus A.O. initiated penalty proceedings u/s.271AAC(1) of the Act\nin respect of addition made u/s.69A of the Act. However in the\nconcluding part of the reassessment order the AO recorded ‘Notice\nissued for 271(1)(c) of the Act for concealment of income' and also\nissued notice dated 29-03-2022 for penalty u/s.274 r.w.s.271(1)(c)\nof the Act.\n2.
1. In response the assessee by its letter dated 28-04-2022\nreplied that as against the reassessment order assessee has filed\nstatutory appeal which is pending disposal before the Ld.CIT(A).\nThe AO initiated penalty proceedings u/s.271AAC(1) of the Act as\nmentioned in the reassessment order, whereas issued statutory\nnotice u/s.271(1)(c) of the Act. Thus the A.O. is not clear in\ncharging penalty under which section of the Act. Therefore the\nassessee requested that the entire penalty proceedings is liable to\nbe dropped.\n2.
Without considering the above reply and non-application of\nmind, the AO issued second notice u/s.271(1)(c) of the Act dated\n07-09-2023. Again, the assessee vide its reply dated 22-09-2023\nrequested to drop the penalty proceedings wrongly initiated or\nalternatively keep the penalty proceedings in abeyance till the\ndisposal of the appeal.\n3. It is thereafter Ld. PCIT issued a Show Cause Notice dated 20-\n01-2024 which rates as follows:\n“...
2. It is observed during the scrutiny of the records that in the order u/s\n147 r.w.s.144B dtd. 29.03.2022 while making addition of Rs.66,63,250/-\nu/s 69A of the I.T. Act, penalty proceedings u/s 271AAC were initiated.\nHowever, in the concluding para of the assessment order it is incorrectly\nmentioned that \"Notice issued for 271(1)(c) of the Act.\n3. In view of the above, since in assessee's the assessment u/s 147 r.w.s.\n1448 of the Income-tax Act, 1961 (\"Act\") for AY 2017-18 had been\ncompleted on 29.03.2022 without properly examining records that revel\nthat an addition made u/s 69A of the Act at Rs.66,63,250/-. The\nundersigned is of the belief that the assessment order passed by the\nAssessing officer u/s 147 r.w.s.1448 of the Income-tax Act, 1961 (\"Act\") for\nAY 2017-18 has become erroneous insofar as prejudicial to the interest of\nrevenue within the meaning of section 263 of the I.T. Act and hence, it is a\nfit case for revision u/s.263 of the Act.”\n3.
1. The assessee made detailed reply about the wrong notice\nissued by the AO and pendency of appeal before CIT[A] and\nrequested to drop the Revision proceedings.\n4. Ld PCIT considered the submissions of the assessee and held\nthat though the AO in the body of the reassessment order\nconcluded the unexplained amount of Rs.66,63,250/= is required\nto be taxed u/s.69A in line with section 115BBE of the Act and also\ninitiated penalty proceeding u/s.271AAC[1] of the Act but\nerroneously issued penalty notice u/s.271[1][c] of the Act, which is\nerroneous and prejudicial to the interest of the Revenue and\nthereby setaside the notice issued u/s.274 rws 271[1][c] of the Act\ndated 29-03-2022 for the Asst. Year 2017-18 and directed the A.O.\nto issue fresh notice u/s.271AAC[1] of the Act by observing as\nfollows:\n“8. Hence, in exercise of power conferred in me u/s.263 of the Act, the\nA.O. is directed to drop the penal proceedings u/s 271(1)(c) of the Act and\nissue a fresh penalty notice u/s 271AAC(1) of the Act. Needless to\nmention, the A.O. may levy penalty or keep the proceedings in abeyance\ntill the outcome of Ld. CIT(A)'s order on the issue of addition u/s 69A of\nthe Act. with this, I set aside the notice issued u/s 274 read with section\n271(1)(c) of the Income tax Act dated 29.03.2022 for the A.Y. 2017-18 with\nthe direction to the AO to issue a fresh penalty notice in accordance with\nlaw and after duly examining the facts of the case to the extent discussed\nsupra after giving the assessee a reasonable opportunity of being heard.\"\n5. Aggrieved against the Revision order the assessee in appeal\nbefore us raising the following Grounds of Appeal:\n1. The Principal Commissioner of Income Tax -1, Ahmedabad, has erred in\nlaw and on facts while passing the order u/s 263 of the Income Tax Act,\n1961dated 09/02/2024, Which requires to be quashed.\n2. That the Ld. Principal Commissioner -1, Ahmedabad has erred in law\nand on facts while initiating the proceedings u/s 263 of the I.T. Act, 1961\nand therefore the proceedings itself is bad in law illegal and void.\n3. That the re-assessment order passed dated 29/03/2022 by National\nFaceless Assessment Unit is neither erroneous nor prejudicial to the\nInterest of revenue, however the proceedings initiated u/s 263 of the I.T.\nAct, 1961 by PCIT-1, Ahmedabad is bad in law which requires to be\nquashed.\n4. While passing the Order U/s 263 by PCIT-1, Ahmedabad has not\ndisputed the re-assessment order, however he has disputed the notice\nissued u/s 271(1)(c) dated 29/03/2022, which is out of the preview of\nsection 263 of the Income Tax Act, and therefore the order passed u/s 263\nrequires to be quashed.\n5. The Commissioner has failed to appreciate that the order of assessment\ndated 29-03-2022, and penalty initiated u/s 271AAC(1) of the IT Act, 1961\nare subject-matter of appeal before the Commissioner (Appeals) and\ntherefore considering the Explanation-1 to section 263 of the IT Act, the\nproceedings initiated are bad in law and requires to be quashed.\n6. Heard rival submissions at length and perused the materials\navailable on record including the Paper Book filed by the assessee\nand the Penalty notices issued by the Ld AO u/s.271(1)(c) of the\nAct.\n6.
1. The sole basis for invoking section 263 by the Ld. PCIT in the\ninstant case is that the penalty notice was issued under section\n271(1)(c) instead of the penalty provision rightly applicable section\n271AAC(1) of the Act, as discussed in the body of the reassessment\norder. The Ld. PCIT considered this as a serious error and also\nprejudicial to the interest of Revenue. No doubt that it is an\nerroneous order with reference to issuance of penalty notice\nu/s.271[1][c] instead of the correct penalty notice ought to have\nbeen issued u/s.271AAC[1] of the Act.\n6.
2. In the present case, it is not in dispute that the LdAO\nconsciously and correctly invoked section 271AAC(1) in the\nreassessment order, but wrongly issued penalty notice\nu/s.271(1)(c) of the Act, which is at best, a procedural defect that\ncould have been rectified by the AO himself invoking section 292B\nof the Act and thereafter Ld. PCIT invoked revision proceeding and\nissued Show Cause Notice dated 20-01-2024.\n6.
3. As per section 263 of the Act, the PCIT when found the\nassessment order is erroneous and prejudicial to the interest of\nRevenue, after offerding opportunity of hearing to the assessee,\npass revision order to enhance or modify the assessment, or\ncancel and direct to pass fresh assessment. In the present case\nLd PCIT in exercise of power conferred u/s.263 of the Act, directed\nthe A.O. to drop the penal proceedings u/s 271(1)(c) of the Act and\nissue a fresh penalty notice u/s 271AAC(1) of the Act, thus\nmodified the reassessment order.\n7. Ld. Counsel Shri Jaimin Shah appearing for the assessee\nsubmitted that the penalty proceedings are independent and\ndistinct from the assessment proceedings and relied upon Delhi\nHigh Court in the case of Addl. CIT v. J.K. D'Costa reported in\n[1982] 133 ITR 7 wherein it was held that failure to initiate or\nwrongful initiation of penalty proceedings does not affect the\nvalidity of the assessment order, which was later confirmed by\nHon'ble Supreme Court by dismissing Revenue's SLP which is\nreported in [1984] 147 ITR (St.) 1.\n7.
1. Further Ld. Counsel relied upon Chennai Tribunal decision in\nITA No.1451/Chny/2024 dated 14-08-2024 in the case of M/s.\nAnotra Realtors Pvt Ltd -Vs- PCIT, on identical wrong issuance of\npenalty notice, held that PCIT cannot direct AO to initiate penalty\nthrough revision proceedings, when the AO already applied his\nmind and initiated penalty, even if under the wrong section and\nthereby quashed the Revision proceeding by observing as follows:\n“...
13. In the present case before us, admittedly assessment was framed\nu/s.153C of the Act and the AO initiated penalty proceedings u/s.271AAC of the\nAct, which is non-existent provision and the same was also approved by the\nAddl.CIT u/s.153D of the Act. But there is no recording of any satisfaction that\nthe assessee has concealed the particulars of income or furnished inaccurate\nparticulars of income. Once there is no satisfaction recorded in the order, the\norder cannot be subject matter of revision u/s.263 of the Act by the PCIT in view\nof another decision of Hon'ble High Court of Madras in the case of CIT vs.\nChennai Metro Rail Ltd., in Tax Case (Appeal) No.745 of 2017, wherein the\nHon'ble Madras High Court considering the decision of Hon'ble Allahabad High\nCourt in the case of Surendra Prasad Agarwal, supra, concurred with the decision\nof Hon'ble Allahabad High Court but given a finding that the AO has to record his\nsatisfaction or establish that the assessee has concealed his income by filing\ninaccurate particulars of income. In the absence of the same, the Hon'ble High\nCourt held that the Tribunal has rightly set aside the directions of CIT directing\nthe AO to initiate penalty proceedings although they have not agreed with the\nreasoning's in its entirety. The Hon'ble High Court observed as under:-\n“14. In view of Section 271(1) read with Section 263 of the Act, the\nPrincipal Commissioner might pass such order as the\ncircumstances of the case might justify, which could include an\norder enhancing or modifying the assessment or cancelling the\nassessment or directing a fresh assessment. Directing fresh\nassessment would, in our view, include assessment of penalty. It\ncannot, therefore, be said that the Principal Commissioner had no\njurisdiction to pass such order. The issue has been decided by a\nDivision Bench of the High Court of Allahabad in Commissioner of\nIncome-tax v. Surendra Prasad Agrawal, reported in (2005) 142\nTaxman 653 (Allahabad). However, the Principal Commissioner,\nwe find, has recorded a finding that “on examination of the\nrecords, it is found that the Assessing Officer had in the assessment\norder established that the Assessee had concealed his income by\nfiling inaccurate particulars”. There is no such finding in the order\nof assessment. The Principal Commissioner seems to have distorted\nthe order of assessment. The finding of the Principal Commissioner\nis to that extent perverse.\n15. In our view, in the absence of any finding of the Assessing\nOfficer with regard to concealment of income or with regard to\nfurnishing of inaccurate particulars of income, the Commissioner\nclearly erred in holding that omission to record satisfaction to\ninitiate penalty proceedings was erroneous or prejudicial to the\ninterest of Revenue. The learned Tribunal rightly set aside the\ndirection of the Principal Commissioner directing the Assessing\nOfficer to initiate penalty proceedings although we may not agree\nwith the reasoning in its entirety.\"\n8. On the contrary, the Ld. Departmental Representative (DR)\nsubmitted that omission by the Assessing Officer to initiate penalty\nproceedings has squarely rendered the assessment order erroneous\nand prejudicial to the interest of Revenue. In support, he relied on\nthe Hon'ble Allahabad High Court in the case of CIT v. Surendra\nPrasad Agrawal [2005] 142 Taxman 653 (Allahabad).\n9. We have heard rival submissions at length and perused the\nrelevant material on record including the Paper Book and Case\nLaws filed by the parties. The case law relied by the assessee\nnamely J.K. D’Costa was considered by Delhi High Court in the\ncase of Achal Kumar Jain [1982] 11 Taxman 228 and Allahabad\nHigh Court in the case of CIT v. Surendra Prasad Agrawal [2005]\n142 Taxman 653. The above case laws were considered by the\nMumbai Bench of this Tribunal in the case of Anjis Developers Pvt.\nLtd. v. PCIT-5 in dated 20/02/2023 and\nheld as follows:\n“6. We have heard rival submission of the parties on the issue-in-dispute and\nperused the relevant material on record. According to the Ld. PCIT, the\nAssessing Officer failed to make inquiries on the issue of initiating penalty\nproceedings u/s 270A of the Act and said action of the Assessing Officer is\nwithout application of the mind. Before the Ld. PCIT, it was submitted on\nbehalf of the assessee that all material facts were disclosed before the\nAssessing Officer.It was further submitted that case of the assessee falls\nwithin the exclusion mentioned u/s 270A(6) of the Act and therefore addition\nmade cannot be considered as under reporting of the income for the purpose\nof section 270A of the Act and it was possible that Assessing Officer had after\nconsidering the fact of the case and exclusion mentioned 270A(6) of the Act,\narrived at the decision that the assessee was not liable for initiating the\npenalty proceedings. But we find that there is no such whisper in the\nassessment order or in the assessment record that case falls under exclusion\nmentioned in section 270A(6) of the Act. Further, we find that in the case of\nAddl. CIT v. J.K. D's Costa (supra), the Hon'ble High Court has held penalty\nproceedings do not from part of assessment proceedings and failure of the\nAssessing Officer or ITO to record in the assessment order, his satisfaction or\nlack of it in regard to the leviability of the penalty, cannot be said to be a\nfactor vitiating the assessment order in any respect. The Hon'ble Delhi High\nCourt in the case of Achal Kumar Jain (supra) following the finding in the\ncase of J.K. D's Costa (supra). However, we find that the Hon'ble Allahabad\nHigh Court in the case of Surendra Prasad Agrawal (supra) after considering\nthe decision of the Hon'ble Delhi High court in the case of J.K. D's Costa\n(supra) and Achal Kumar Jain (supra) held that non-initiation of penalty\nproceedings u/s 271(1)(c) of the Act has rendered, the assessment order\nerroneous in so far as prejudicial to the interest of the Revenue. The relevant\nfinding of the Hon'ble Allahabad High Court is reproduced as under:\n"5. We have heard Shri A.N. Mahajan, the learned Standing Counsel\nfor the Revenue and Shri Rishi Raj Kapoor, leamed counsel for the\nrespondent.
The learned counsel for the Revenue submitted that the\nTribunal was not justified in holding that the Commissioner of Income\nTax could not have assumed jurisdiction under section 263 of the Act\nin a case in which there was no order passed by the Income Tax\nOfficer under the Act in as much as omission to initiate penalty\nproceedings while passing the assessment order was erroneous as also\nprejudicial the interest of the Revenue. He further submitted that the\nCommissioner of Income Tax has remanded the matter and if the\norder was erroneous and prejudicial on two points, the Commissioner\nhad the power to remand the matter and direct for initiation of\npenalty proceedings also. He relied upon the following decisions\n1. Saraiya Distillery's case (supra)\n2. Malabar Industrial Co. Lid. v. CIT (2000).243 ITR 83-(SC).\n7. Shri R.R. Kapoor learned counsel for the respondent submitted that\nomission to initiate penalty proceedings under section 273(1) of the\nAct by the Income Tax Officer while passing the assessment order did\nnot amount to an order which could be revised by the Commissioner\nof Income Tax under section 263 of the Act. While supporting the\ndecision of the Tribunal he relied upon the following decisions:\n1. Adell. CIT v. J.K. D'Costa (19821 133 ITR 7& (Delhi)\n2. Addl. CIT v. Achal Kumar Jain [1983] 142 ITR 606 (Delhi)\n3. CIT v. Nihal Chand Rekyan (20001 242 ITTR 45 (Delhi).\n8. Having heard the leamed counsel for the parties we find that the\nDelhi High Court in the case of J.K. D'Costa (supra) has held that the\nassessment cannot be said to be erroneous or prejudicial to the interest\nof the revenue because of the failure of the Income Tax Officer to\nrecord his opinion about the leviability of penalty in the case. It has\nheld as follows:\n\"..The only question before us is whether the Tribunal was right in\nrevoking the order of the Addl. Commissioner in so far as it pertains\nto the question of penalties under sections 271(1)(a) and 273(b). Here,\nwe find ourselves in complete agreement with the view taken by the\nTribunal. It is well established that proceedings for the levy of a\npenalty whether under section 271(1)(a) or under section 273(6) are\nproceedings independent of and separate from the assessment\nproceedings. Though the expression assessment is used in the Act\nwith different meanings in different contexts, so far as section 263 is\nconcerned, it refers to a particular proceeding that is being considered\nby the Commissioner and it is not possible when the Commissioner is\ndealing with the assessment proceedings and the assessment order to\nexpand the scope of these proceedings and to view the penalty\nproceedings also as part of the proceedings which are being sought to\nbe revised by the Commissioner. There is no identity between the\nassessment proceedings and the penalty proceedings; the latter are\nseparate proceedings, that may, in some cases, follow as a\nconsequence of the assessment proceedings. As the Tribunal has\npointed out, though it is usual for the ITO to record in the assessment\norder that penalty proceedings are being initiated, this is more a\nmatter of convenience than of legal requirement. All that the law\nrequires, so far as the penalty proceedings are concerned, is that they\nshould be initiated in the course of the proceedings for assessment. It\nis sufficient if there is some record somewhere, even apart from the\nassessment order itself, that the ITO has recorded his satisfaction that\nthe assessee is guilty of concealment or other default for which penalty\naction is called for. Indeed, in certain cases it is possible for the ITO to\nissue a penalty notice or initiate penalty proceedings even long before\nthe assessment is completed though the actual penalty order cannot be\npassed until the assessment is finalized. We, therefore, agree with the\nview taken by the Tribunal that the penalty proceedings do not form\npart of the assessment proceedings and that the failure of the ITO to\nrecord in the assessment order his satisfaction or the lack of it in\nregard to the leviability of penalty cannot be said to be a factor\nvitiating the assessment order in any respect. An assessment cannot be\nsaid to be erroneous or prejudicial to the interest of the revenue\nbecause of the failure of the ITO to record his opinion about the\nleviability of penalty in the case...\" (p. 11)\n9. The aforesaid decision has been consistently followed by the Delhi\nHigh Court in the cases of Achal Kumar Jain (supra), P.C. Puri v. CIT\n(1985) 151 ITR 584 (Delhi), Addl. CIT v. Precision Metal Works (1985)\n156 MIR 6934, CWT v. A.N. Sarvaria (1986) 161 ITR 694, Addl. CIT v.\nSudershan Talkies (1993).200 ITR 153, CIT v. Sudershan Talkies\n[19931.201 ITTR 289 and Nihal Chand Rekyan (supra).\n10. Similar view has been taken by the Rajasthan High Court in the\ncase of CIT v. Keshrimal Parasmal (1986)157 ITR 484%, Gauhati High\nCourt in the case of Surendra Prasad Singh v. CIT (19881_173 ITR 610°,\nCalcutta High Court in the case of CIT V. Linotype & Machinery Ltd.\n(19911_192 ITR 337 and Madras High Court in the case of CIT v.\nC.R.K. Swami (2002) 254 ITR 1584.\n11. On the other hand the Madhya Pradesh High Court has taken a\ncontrary view in the case of Addl. CIT v.Indian Pharmaceuticals\n(19801_123 ITR 874. Addl. CIT v. Kantilal Jain [19801 125 ITR 3735,\nAddl. CWT v. Nathoolal Bala Ram (1980). 125 ITR 596& and CIT v.\nNarpat Singh Malkhan Singh (19811 128 ITR 777\n12. This Court in the case of Saraiva Distillery (supra) has held that an\norder can be said to be erroneous either when it does not decide a\npoint or record a finding on an issue which ought to have been done\nor decides it wrongly. In the aforesaid case the Assessing Officer had\nnot charged interest while passing the assessment order. This Court\nfollowing the decision of Kerala High Court in the case of CIT v.\nCochin Malabar Estates Lid. (1974)27 ITR 466 and Calcutta High Court\nin the case of Singho Mica Mining Co. Lid. v. CIT (19781_LL ITR 231\nhas held that the order passed by the ITO being prejudicial to the\ninterest of the revenue, the Additional Commissioner had jurisdiction\nunder section 263 to pass the order. The Madhya Pradesh High Court\nin the case of Indian Pharmaceuticals after referring to the decision of\nthe Apex Court in the case of C.A. Abraham v. ITO[1961] 41 ITR 425\nand CIT v. Bheekha Bhai Dada Bhai [1961] 42 ITR 123 has held that the\nassessment does not mean only computation of income but\nconsideration of all facts including the liability for penalty that may\nattract the provisions contained in section 271(1)(a) of the Act. It has\nfurther held that if in any proceeding for assessment the Income Tax\nOfficer fails to take notice of the facts attracting the provisions\ncontained under section 271(1)(a) of the Act, it could not be said that\nhis failure to take notice of the facts which were before him attracting\nthe provisions of section 271(1)(a) of the Act does not amount to an\nerror prejudicial to the interest of the Revenue. It concluded that if\ntherefore the ITO during the pendency of the proceedings has omitted\nto take notice of facts attracting section 271(1)(a) of the Act during the\npendency of the proceedings which ultimately ended in an order of\nassessment, the order would be erroneous and in this view of the\nmatter, the Commissioner was right in exercising jurisdiction\nconferred on him under section 263 of the Act. The other decision of\nthe M.P.High Court has followed its earlier decision in the case of\nIndian Pharmaceutical (supra). The Delhi High Court in the case of\nAchal Kumar Jain (supra) had considered the decision of the Madhya\nPradesh High Court in the case of Indian Pharmaceuticals (supra),\nShri Kanti Lal Jain (supra), NathoolalBalaram (supra) and Narain\nSingh Malkhan Singh (supra) and while disagreeing has held as\nfollows:\n\"On a cursory examination, it appeared to us that the view of the\nMadhya Pradesh High Court as indicated in the abovementioned\ndecisions is correct, but on closer scrutiny we respectfully disagree\nwith the same. In any case, the matter is not res integra as far as this\ncourt is concerned. In Addl. CIT v. J.K.D. Costa, Income-tax Reference\nNo. 82 of 1974, disposed of by us on 27th April, 1981-reported in\n(1982) 133 ITR7. We held on similar facts that the Commissioner could\nnot pass an order pertaining to penalty under section263 of the Act.\nWe held that the penalty proceedings do not form part of the\nassessment proceedings. Further, the failure of the ITO to record his\nsatisfaction or the lack of it in the assessment order, with regard to the\nleviability of penalty cannot be a factor vitiating the assessment\norders.\"\n6.1 Thereafter, Hon'ble High Court in para 18 held as under:\n\"18. It is well established that the Assessing Officer has to initiate\nproceedings for imposition of penalty during the course of the\nassessment itself. If he fails to initiate or record his satisfaction for the\ninitiation of the penalty proceedings during the course of the\nassessment proceedings it would be a case where the assessment order\ncan be said to be erroneous as he has not decided a point nor recorded\na finding on an issue which ought to have been done or decides it\nwrongly as held by this Court in the case of Saraiya Distillery (supra).\nThus the omission ofthe Income Tax Officer to initiate penalty\nproceedings during the course of the assessment renders the\nassessment order erroneous and prejudicial to the interest of the\nRevenue.\n19. In this view of the matter, we are in respectful agreement with the\nview taken by the Madhya Pradesh High Court in the case of Indian\nPharmaceuticals (supra).\n20. In view of the foregoing discussions we are of the considered\nopinion that the Tribunal was not justified in holding that the failure\nto initiate penalty proceedings in the course of the assessment did not\nrender the assessment order erroneous and prejudicial to the interest\nof the revenue. The Commissioner of Income Tax had the jurisdiction\nto revise such an order.\n6.2 The issue in dispute in the instant case is in relation to penalty u/s 270A\nof the Act which is more or less 'pari materia' with section u/s 271(1)(c) of the\nAct. For ready reference the section 271(1)(c) of the Act and section 270A are\nreproduced as under:\nSection 271(1)(c)\n[Failure to furnish returns, comply with notices, concealment of\nincome, etc.\n271. (1) If the (Assessing Officer or the Commissioner (Appeals) any\nproceedings under this Act, is satisfied that nay person-\n(b). or\n(c) has concealed the particulars of "his income or so*** \"furnished\ninaccurate particulars of 81/such income, or/7\"\n(d).\nhe may direct that such person shall pay by way of penalty.-\n(1)[****]\n84 (ii) in the cases referred to in clause (b), & in addition to tax, if any,\npayable) by him, la sum of ten thousand rupees) for each such failure\n;) ST\n(iii) in the cases referred to in clause (c) & or clause (d)], in addition to\ntax, if any, payable by him, a sum which shall not be less than, but\nwhich shall not exceed three times), the amount of tax sought to be\nevaded by reason of the concealment of particulars of his income 9 or\nfringe benefits) or the furnishing of inaccurate particulars of such\nincome or fringe benefits).\nSection 270A\n270A. (1) The Assessing Officer or the Commissioner (Appeals) or the\nPrincipal Commissioner or Commissioner may, during the course of\nany proceedings under this Act, direct that any person who has under-\nreported his income shall be liable to pay a penalty in addition to tax,\nif any, on the under-reportedincome.\n6.3 Since, both the penalty u/s 271(1) of the Act as well as penalty u/s 270A\nof the Act could be initiated if the Assessing Officer or other authority\nprescribed may consider so under the proceeding of the Act. Therefore, the\nissue decided by Hon'ble Allahabad High Court (supra) being pari materia,\nrespectfully following the finding, the grounds raised by the assessee are\ndismissed.\n9.
Further the case laws of Chennai Tribunal in the case of M/s.\nAnotra Realtors Pvt. Ltd. is not applicable to the present case, since\nin that case in the assessment order, the Ld. A.O. has not recorded\nthe satisfaction for initiation of penalty proceedings. In that\ncircumstances, the Chennai Tribunal held that Revision\nproceedings cannot be invoked, solely for the reasons that penalty\nproceedings initiated on a wrong penalty proceedings. Whereas in\nthis case, the Ld. A.O. has consciously and correctly invoked\nSection 271AAC(1) in the reassessment order, however wrongly\nissued penalty notice u/s.271(1)(c) of the Act. Therefore we are of\nthe considered opinion, the revisionary jurisdiction invoked u/s.\n263 by directing the Assessing Officer to issue correct penalty\nnotice by modifying the reassessment order is well within the\nprovisions of law, which does not require any interference.\n10. In the result, the appeal filed by the Assessee is hereby\ndismissed.\nOrder pronounced in the open court on 27-05-2025\nSd/-\n(DR. BRR KUMAR)\nVICE PRESIDENT\nAhmedabad : Dated 27/05/2025\nSd/-\n(T.R. SENTHIL KUMAR)\nJUDICIAL MEMBER\nआदेश की प्रतिलिपि अग्रेषित /