DINESH VERMA,MANALI, HIMACHAL PRADESH vs. ITO, ITO WARD KULLU

ITA 897/CHANDI/2025Status: DisposedITAT Chandigarh24 February 2026AY 2018-19Bench: SHRI. LALIET KUMAR (Judicial Member), SHRI. KRINWANT SAHAY (Accountant Member)6 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal upheld the PCIT's order under Section 263, stating that the AO's failure to examine statutory consequences arising from the assessment, specifically the applicability of Section 270A penalty for under-reporting of income, rendered the order erroneous and prejudicial to the revenue. It clarified that penalty proceedings under Section 270A are intrinsically linked to assessment proceedings, and not independent, thereby distinguishing earlier precedents under old penalty provisions. Thus, the PCIT was justified in exercising revisionary jurisdiction.

What were the facts?

The Principal Commissioner of Income Tax (PCIT) invoked Section 263 to revise an assessment order for AY 2018-19, observing that the Assessing Officer (AO) had passed the order without proper verification of material issues and failed to initiate penalty proceedings under Section 270A. This was particularly relevant as the assessee had filed the return only after a notice under Section 148, indicating under-reported income. The PCIT deemed the AO's order erroneous and prejudicial to the interests of the revenue and directed a fresh assessment to initiate penalty proceedings.

What were the issues?

Whether the Principal Commissioner was justified in exercising revisionary powers under Section 263 to direct the Assessing Officer to initiate penalty proceedings under Section 270A, on the grounds that the AO's failure to do so rendered the original assessment order erroneous and prejudicial to the revenue, especially when the assessee had under-reported income.

Which sections of the Income-tax Act were involved?

Section 263,Section 270A,Section 148,Section 147,Section 144B,Section 151A,Section 271(1)(a),Section 273

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Cause title — parties, addresses and appearances
आयकर अपीलीय अिधकरण,च"ीगढ़ "ायपीठ “ए” , च"ीगढ़ IN THE INCOME TAX APPELLATE TRIBUNAL, CHANDIGARH BENCH “A”, CHANDIGARH HEARING THROUGH: HYBRID MODE "ी लिलत कुमार, "ाियक सद" एवं "ी कृणव" सहाय, लेखा सद" BEFORE: SHRI. LALIET KUMAR, JM & SHRI. KRINWANT SAHAY, AM आयकर अपील सं./ ITA No. 897/Chd/ 2025 िनधा"रण वष" / Assessment Year : 2018-19 Dinesh Verma बनाम The ITO Shop No. 58, Bhaga Sidh Trader, ITO Ward Siyali Mahadev Market Manali, Kullu, Himachal Pradesh-175131 Kullu, Himachal Pradesh-175131 "ायी लेखा सं./PAN NO: AJAPV2790D अपीलाथ"/Appellant ""थ"/Respondent िनधा"रती की ओर से/Assessee by : Shri Vinamar Gupta, C.A (Virtually) राज" की ओर से/ Revenue by : Shri Manav Bansal, CIT, DR सुनवाई की तारीख/Date of Hearing : 12/02/2026 उदघोषणा की तारीख/Date of Pronouncement : 24/02/2026

आदेश/Order PER LALIET KUMAR, J.M: This is an appeal filed by the Assessee against the order passed by the Ld. Pr. CIT, Chandigarh-1, dt. 04/03/2025 for the Assessment Year 2018-19. 2. At the outset, it is noticed that the appeal is barred by limitation by 40 days. The assessee has filed an application supported by an affidavit explaining that the delay occurred due to procedural circumstances beyond his control, and

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