M/S SAI KRISHNA DEVELOPERS,SURAT vs. PCIT-1, SURAT

ITA 528/SRT/2024Status: DisposedITAT Surat08 January 2025AY 2018-193 pages

AI SummaryN/A

Facts

The Ld. PCIT revised an assessment order for AY 2018-19 under section 263, deeming it erroneous and prejudicial to the revenue because the Assessing Officer initiated penalties under section 270A instead of 271AAC. The assessee contended that the underlying additions made in the original assessment were already deleted by the Tribunal and subsequently upheld by the High Court, thereby rendering the basis for penalty initiation non-existent.

Held

The Tribunal held that since the quantum additions, which formed the basis for initiating penalties, had been set aside and deleted, the issue of penalty under either section 270A or 271AAC did not survive. Consequently, the impugned revision order passed by the Ld. PCIT under section 263 was set aside, and the assessee's appeal was allowed.

Key Issues

Whether a revision order passed by the PCIT under Section 263 for initiating penalties is sustainable when the quantum additions, which were the basis for such penalties, have been deleted by appellate authorities.

Sections Cited

Section 263 of the Income Tax Act, 1961, Section 143(3) of the Income Tax Act, 1961, Section 144B of the Income Tax Act, 1961, Section 270A of the Income Tax Act, 1961, Section 271AAC of the Income Tax Act, 1961, Section 254(1) of the Income Tax Act, 1961

AI-generated summary — verify with the full judgment below

िनधा�रती की ओर से /Assessee by Shri Tushar P. Hemani, Senior Advocate with Shri Parimalsinh Parmar, Advocate राज� की ओर से /Revenue by Shri Ravi Kant Gupta– CIT-DR सुनवाई की तारीख/Date of hearing 08.01.2025 उद्घोषणा की तारीख/Date of 08.01.2025 pronouncement Order under section 254(1) of Income Tax Act PER PAWAN SINGH, JUDICIAL MEMBER: 1. This appeal by assessee is directed against the order of Ld. Principal Commissioner of Income-tax-1, Surat [for short to as “Ld. PCIT”] passed under section 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 22.03.2024 for assessment year (AY) 2018-19, in revising of assessment order passed by Assessing Officer under section 143(3) r.w.s. 144B of the Act dated 21.04.2021 for assessment year 2018-19. The ld PCIT while revising assessment order it was held that while passing assessment order, the Assessing Officer initiated penalties under section 270A instead of 271AAC of the Act, thus, assessment order is erroneous and in so far as prejudicial to the interest of justice.

(A.Y.18-19) M/s Sai Krishna Developers 2. Rival submissions of both parties heard and record perused. The Learned Senior Counsel, Shri Tushar P Hemani (hereinafter referred as “Ld. Senior Counsel”) submits that Ld. PCIT revised assessment order on the issue that Assessing Officer while passing the assessment order initiated penalties under section 270A instead of 271AAC of the Act and that assessment order is erroneous and in so far as prejudicial to the interest of Revenue. The Ld. Sr- Counsel submits that entire addition made in the assessment order has already been deleted by the Tribunal in appeal against the quantum assessment vide order dated 14.03.2024 in ITA No.761/Srt/2023. Against the order of Tribunal, the Revenue filed appeal before Hon’ble jurisdictional High Court, wherein said appeal is dismissed due to low tax effect in Tax Appeal No.814 of 2024 dated 17.10.2024. Thus, order passed by Tribunal has attained finality. The Ld. Sr. Counsel submits that once, the additions in the assessment is deleted, the issue identified by Ld. PCIT in impugned order for initiating penalty either under section 270A instead of 271AAC of the Act 22.03.2024 will not survive. Thus, the issue raised in the present appeal is covered in favour of the assessee. The Ld. Sr-Counsel for the assessee furnished copy order of Tribunal in quantum appeal in (supra) and of Hon’ble jurisdictional High Court in Tax Appeal No.814 of 2024 dated 17.10.2024.

On the other hand, Ld. CIT-DR for the Revenue after going through the order of Tribunal in quantum assessment as well as order of Hon’ble jurisdictional High Court in Tax Appeal No.814 of 2024 dated 17.10.2024, accepted the fact that issue is covered in favour of assessee.