BULDHANA URBAN CO-OP CREDIT SOCIETY LTD., Buldhana V. CIT-CENTRAL, Nagpur

ITA 145/NAG/2013

• Counselvise Citation: [2015] 134 COUNSELVISE.COM (IT) 1553 (ITAT-NAGPUR)
• Duration Of Justice: 2 year(s) 8 month(s) 2 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 18-12-2015
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2008-2009
• Appeal Filed On: 15-04-2013
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: NARENDRA KANE
• Keywords: Question of law; Initiation of penalty proceedings; Assessment record
• Section: 143(3); 263; 2

Judgement Text

1 ITA NO. 145/NAG/.2013 IN THE INCOME TAX APPELLATE TRIBUNAL, NAGPUR BENCH, NAGPUR BEFORE SHRI MUKUL K. SHRAWAT, JUDICIAL MEMBER AND SHRI SHAMIM YAHYA, ACCOUNTANT MEMBER. I.T.A. NO.145/NAG/2013 ASSESSMENT YEAR : 2008 - 09. BULDHANA URBAN CO - OP. CREDIT COMMISSIONER OF INCOME - TAX SOCIETY LTD. VS. (CENTRAL), NAGPUR. PAN AAAAB2572M. APPELLANT. RESPONDENT. APPELLANT BY : SHRI MUKESH AGRAWAL. RESPONDENT BY : SHRI NARENDRA KANE. DATE OF HEARING : 03 - 11 - 2015 DATE OF PRONOUNCEMENT : 18 TH DEC., 2015 O R D E R PER MUKUL K. SHRAWAT, J.M. THIS IS AN APPEAL FILED BY THE ASSESSEE ARISING FROM THE ORDER OF LEARNED C.I.T. (CENTRAL), NAGPUR PASSED U/S 263 OF THE I.T. ACT DATED 28 - 03 - 2013. THE ASSESSEE HAS CHALLENGED THE IMPUGNED ORDER AS PER THE FOLLOWING GROUNDS: 1. THE NOTICE OF THE LEARNED CIT U/S 263 IS WITHOUT JURISDICTION AND THEREFORE ILLEGAL. 2. THE LEARNED CIT ERRED IN DIRECTING THE ASSESSING OFFICER TO INITIATE THE PENALTY U/S 271(1)(C). 3. THE LEARNED CIT HAS NO JURISDICTION TO DIRECT THE ASSESSING OFFICER TO INITIATE THE PENALTY WHEN ASSESSMENT PROCEEDINGS WER E NOT PENDING. 2. ON EXAMINATION OF THE RECORDS OF THE ASSESSEE , LEAR NED COMMISSIONER HAD MADE AN OBSERVATION THAT THE ORDER PASSED BY THE AO DATED 31 - 12 - 2010 WAS AN ERRONEOUS ORDER BECAUSE OF THE REASON THAT THE PENALTY PROCEEDINGS IN RESPECT OF THE ADDITION OF RS.58 LAKHS HAS BEEN WRONGLY INITIATED U/S 271AAA OF 2 ITA NO. 145/NAG/.2013 THE I.T. ACT VIDE NOTICE DATED 31 - 12 - 2010, WHEN IN FACT THE CORRECT SECTION OF THE ACT TO BE APPLIED FOR PENALTY PROCEEDINGS SHOULD BE UNDER SECTION 271(1)(C) OF I.T. ACT. 3. OUR ATTENTION HAS BEEN DRAWN ON AN ASSESSMENT ORDER PASSED U/S 143(3) READ WITH SECTION 1 53A DATED 31 - 12 - 2010. THE ASSESSEE AOP IS STATED TO BE A CREDIT COOPERATIVE SOCIETY IN THE BANKING BUSINESS. IT HAS ALSO BEEN NOTED IN THE ORDER OF THE AO THAT THE ASSESSEE COOPERATIVE SOCIETY WAS RUNNING A SUGAR FACTORY DURING THE RELEVANT YEAR. A SEAR CH U/S 132(1)/133A WAS CONDUCTED ON 28 TH MARCH 2009. THE ASSESSEE HAD FILED A RETURN OF INCOME AT RS. NIL ON 08 - 10 - 2008. CONSEQUENT UPON A SEARCH, A NOTICE U/S 153A(1)(A) WAS ISSUED ON 11 - 01 - 2009. IN COMPLIANCE OF THE SAID NOTICE, AGAIN A RETURN WAS FILED ON 04 - 08 - 2010 DECLARING A LOSS OF RS. - 41,80,140/ - . SEVERAL DISALLOWANCES AND ADDITIONS HAVE BEEN MADE. HOWEVER, THE SAME ARE NOT THE SUBJECT MATTER OF DISCUSSION AS FAR AS THIS APPEAL IS CONCERNED. TO RESOLVE THE ISSUE INVOLVED, OUR ATTENTION HAS BEEN DR AWN ON THE TWO ADDITIONS, NAMELY, THE ADDITION OF RS.58 LAKHS TAXED ON INCOME FROM DONATIONS AS PER FINDING GIVEN IN PARA NO. 1 OF THE ASSESSMENT ORDER (ASSESSMENT YEAR 2009 - 10 OF EVEN DATE) OF RS. 58 LAKHS. THE OTHER ADDITION OF RS.42,25,000/ - WAS MADE. AS PER THE O B SERVATION PROVISION FOR INVESTMENT FLUCTUATION RESERVE PARA 10 RS.42,25,000/ - . AFTER FINALIZING THE COMPUTATION OF THE INCOME WHICH WAS ARRIVED AT THE FIGURE OF RS.8,92 ,01,600/ - THE AO HAS FURTHER COMMENTED THAT, PENALTY PROCEEDINGS U/S 271 AAA FOR ADDITIONAL DISCLOSURES MADE DURING THE COURSE OF ACTION U/S 132(4) ARE INITIATED. PENALTY PROCEEDINGS U/S 271(1)(C) ARE INITIATED IN RESPECT OF ADDITION/DISALLOWANCES MADE IN THIS ORDER. 4. AGAINST THE SAID OBSERVATION OF THE ACIT, CENTRAL CIRCLE - 1(4), NAGPUR, THE LEARNED COMMISSIONER HAS INVOKED THE PROVISIONS OF SECTION 263 OF I.T. ACT. ON THIS LIMITED ISSUE THE ORDER OF THE AO WAS SET ASIDE BY THE LEARNED COMMISSIONER AS PER THE FOLLOWING OBSERVATIONS : 3 ITA NO. 145/NAG/.2013 FROM THE RATIO OF THE AFORESAID CITATIONS AND FROM THE FACTS OF THIS CASE FOR A.YR. 2008 - 09, IT WILL BE SEEN AND APPRECIATED THAT THIS IS A CASE WHERE PENALTY PROCEEDINGS FOR CONCEALMENT HAS BEEN INITIATED BY THE A . O . TH I S I S NOT A CASE WHERE PENAL PROV IS I ONS FOR CONCEALMENT HAS NOT BEEN INITIATED BY THE A.O. IN THIS CASE WHILE EXAMINING THE ASSESSMENT RECORDS OF THE ASSESSMENT ORDER FOR A.YR. 2008 - 09 , IN EXERCISE OF MY POWERS OF REVISION, I HAVE FOUND THAT THE ASSESSING OFFICER HAS INITIATED THE PENAL TY PROCEEDING A F TER RECORDING HIS SATISFACTION, BUT HAS ONLY QUOTED A : WRONG SECTION OF THE ACT I.E. SECTION 271AAA. THUS THE DEFICIENCY FOUND IN THE ASSESSMENT ORDER I S THE FAILURE ON THE PART OF THE A.O . TO MENTION THE PROPER SECTION UNDER WHICH PENALT Y IS INITIATED I.E. SECTION 271(1)(C) OF THE ACT. TO THIS EXTENT THE ORDER OF A . O. IS ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE AND HERE I N SUCH A CASE THE COMMISSIONER CAN EXERCISE HIS REVISIONAL JURISDICTION I X ] S . 263 OF THE ACT . THUS THE S COPE OF THE POWER OF INTERFERENCE UNDER THIS SECTION 263 OF THE ACT, IS NOT MERELY TO SET ASIDE UNFAVOURABLE ORDERS BUT TO BRING ADDITIONAL TAX WHICH HAS ESCAPED REVENUE, TO THE TREASURY. IT IS AN EXTRAORD I NARY REVISIONAL POWER TO BE EMPLOYED AS A JURIS DICTIONAL CORRECTIVE AND TO BE INVOKED AND EMPLOYED FOR THE PURPOSE OF SETTING RIGHT DISTORTIONS, PREJUDICES TO THE REVENUE AND PREJUDICES TO THE REVENUE ADMINISTRATION . THUS FROM THE ABOVE DISCUSSION AND FROM THE ASSESSMENT RECORD , IT IS FOUND THA T TH E ASSESSMENT ORDER FOR A.YR . 2008 - 09 OF THE ASSESSING OFFICER IS ERRONEOUS AS IT CONTAINS CLEAR ERROR OF LAW AND ERROR OF FACTS OF THE CASE . HENCE IN THE LIGHT OF THE ABOVE, THE SUBMISSION OF THE ASSESSEE TO DROP THE PROCEEDINGS UJ S.263 OF THE ACT IS HEREBY REJECTED. IN THE L IGHT OF THE ABOVE DISCUSSION , IN THE PRECEDING PARAGRAPHS , I AM OF THE CONSIDERED OPINION THAT THE ORDER OF THE A . O. U/S.143(3) U/S.153A DATED 31 - 12 - 2010 FOR A.YR. 2008 - 09 IS BOTH ERRONEOUS AND PREJUDICIAL TO THE INTEREST OF REVENUE TO THE EXTENT OF INITIATION OF C CONCEALMENT PENALTY PROCEEDINGS UNDER A WRONG SECTION I . E. U/ S.271AAA OF THE ACT , REGARDING THE ADDITION OF RS.58 LACS AND ACCORDINGLY THIS CALLS FOR REVIS ION SS] S.263 OF THE ACT . THEREFORE THE ONLY REMEDY IS TO SET ASIDE THE ORDER OF THE A.O. ON THIS LIMITED ISSUE OF PENALTY PROCEEDINGS UNDER THE APPROPRIATE AND PROPER STATUTORY PROVISIONS OF THE ACT, WITH A DIRECTION TO REDO THE AS SESSMENT AS DISCUSSED ABOVE IN THE BODY OF THIS ORDER. I THEREFORE IN EXERCISE OF POWERS VESTED IN ME UJ S.263 OF THE ACT SET ASIDE THE ABOVE ASSESSMENT ORDER ON THIS LIMITED AND SPECIFIC ISSUE OF INITIATION OF PENALTY PROCEEDINGS U/S.271(1)(C) OF THE ACT IN THE LIGHT OF THE ABOVE DIRECTIONS. 4 ITA NO. 145/NAG/.2013 5. FROM THE SIDE OF THE APPELLANT, LEARNED A.R. MR. MUKESH AGRAWAL APPEARED AND PLEADED THAT THE VIEW TAKEN BY THE LEARNED COMMISSIONER ITSELF WAS AN ERRONEOUS VIEW BECAUSE AT THAT POINT OF TIME ONLY AN OBSERVATION WAS MADE. HOWEVER, PENALTY WAS IMPOSED MERELY ON PRESUMPTION THAT THE PENALTY SHALL BE LEVIED IN A RESTRICTIVE MANNER U/S 271AAA. THE LEARNED COMMISSIONER H AS INVOKED THE JURISDICTION U/S 263 WHICH WAS PREMATURE IN NATURE. RATHER ACCORDING TO HIM THE LEARNED COMMISSIONER HAS NO JURISDICTION TO DIRECT TO IMPOSE THE PENALTY. THE CASE LAWS CITED ARE AS UNDER : 1) CIT VS. DR. SURESH G. SHAH (GUJ.) 289 ITR 110. 2) CIT VS. PARMANAND M. PATEL (GUJ) 278 ITR 3. 3) CIT VS. NIHAL CHAND REKYAN (DELHI) 242 ITR 45. 4) COMMISSIONER OF WEALTH TAX VS. A.N. SARVARIA (DELHI) 161 ITR 694. 5) CIT VS. KESHRIMAL PARASMAL (RAJ) 157 ITR 484. 6. ON THE OTHER HAND, FROM THE SIDE OF THE REVENUE, LEARNED D.R., MR. NARENDRA KANE, SUPPORTED THE ACTION TAKEN BY THE LEARNED COMMISSIONER. 7. HAVING HEARD THE SUBMISSIONS OF BOTH THE SIDES , AT THE OUTSET, WE ARE OF THE CONSCIENTIOUS VIEW THAT THE FACTUAL MAT R IX OF THE CASE DO NOT PERMIT TO INVOKE THE PROVISIONS OF SECTION 263 AT THAT STAGE OF THE PROCEEDINGS, HENCE BAD IN LAW. AT THE THRESHOLD OUR ATTENTION HAS BEEN DRAWN ON AN ORDER PASSED BY THIS VERY BENCH I.E. ITAT NAGPUR BENCH, NAGPUR WHEREIN BOTH OF US ARE PARTY, ORDER DATED 28 - 08 - 201 5 BEARING ITA NO. 246/NAG/2013 ASSESSMENT YEAR 2008 - 09 IN THE CASE OF SHRI MUJIB SALMANBHAI PATHAN WHEREIN WE QUASHED THE ORDER U/S 263 AFTER ASSIGNING THE FOLLOWING REASONS : 6. OUR FIRST REASON FOR QUASHING THE REVISIONARY PROCEEDINGS UNDER SECTION 26 3 IS THAT AS PER THIS SECTION, THE LEARNED COMMISSIONER CAN CONSIDER THE ORDER PASSED AS AN ERRONEOUS ORDER AND THEREUPON ENHANCE, MODIFY OR CANCEL SUCH AN ASSESSMENT ORDER. THE LEARNED COMMISSIONER CAN MODIFY THE ASSESSMENT OR CANCEL THE ASSESSMENT. UND ER THIS SECTION, THE LEARNED COMMISSIONER HAS ALSO POWERS TO DIRECT FOR 5 ITA NO. 145/NAG/.2013 A FRESH ASSESSMENT. AT THIS JUNCTURE, IT IS WORTH TO MENTION THAT THE TERM ASSESSMENT IS DEFINED UNDER SECTION 2(8) OF THE ACT, WHICH SAYS THAT ASSESSMENT INCLUDES RE - ASSESSMENT. THE LANGUAGE USED UNDER SECTION 263, BE READ ALONG WITH THE DEFINITION OF THE ASSESSMENT INDICATES THAT THE QUANTIFICATION OF ASSESSED INCOME IS THE SUBJECT MATTER OF REVISION. THE LANGUAGE OF SECTION 263(1) REVOLVES AROUND AN ORDER PASSED BY THE ASSE SSING OFFICER. THIS IS NOT THE CASE BEFORE US THAT THE ASSESSING OFFICER HAS PASSED AN ORDER UNDER SECTION 271(1)(C) OF THE ACT. THE ASSESSING OFFICER HAS PASSED ORDER UNDER SECTION 143(3) OF THE ACT BUT THAT WAS NOT THE SUBJECT MATTER OF CONTROVERSY. EVEN EXPLANATION - 2 TO SECTION 263 OF THE ACT, IT IS CLARIFIED THAT AN ORDER PASSED BY THE ASSESSING OFFICER SHALL BE DEEMED TO BE AN ERRONEOUS INSOFAR AS IT IS PREJUDICIAL TO THE INTERESTS OF REVENUE IF THE SAID ORDER IS PASSED WITHOUT MAKING ENQUIRIES OR VERI FICATION OR THE ORDER IS PASSED ALLOWING ANY RELIEF WITHOUT ENQUIRY OR THE ORDER HAS NOT BEEN MADE IN ACCORDANCE WITH CBDT INSTRUCTIONS, ETC. THEREFORE, THE PRE - CONDITION FOR THE INVOCATION OF REVISION IS THAT THERE SHOULD BE IN EXISTENCE OF AN ORDER PASSE D BY THE ASSESSING OFFICER. BECAUSE OF THESE REASONS THAT THERE WAS NOT IN EXISTENCE AN ORDER UNDER SECTION 271(1)(C), WE ARE OF THE VIEW THAT THE LEARNED COMMISSIONER HAS WRONGLY INVOKED THE JURISDICTION UNDER SECTION 263 OF THE ACT. 7.IN THE CASE OF CIT V/S KESHRIMAL PARASMAL, [1986] 157 ITR 484 (RAJ.), A QUESTION WAS THAT, WHETHER ON THE FACTS AND IN THE CIRCUMSTANCES OF THE CASE, THE TRIBUNAL WAS JUSTIFIED IN CANCELING THE ORDER PASSED UNDER SECTION 263, ON ACCOUNT OF FAILURE ON THE PART OF THE ASSESSI NG OFFICER TO INITIATE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT. THE HON'BLE RAJASTHAN HIGH COURT HAS DISCUSSED THE JURISDICTION FOR THE REVISION AND HELD THAT THE LEARNED COMMISSIONER WAS NOT ENTITLED TO SET ASIDE THE ASSESSMENT ORDER ON THE GROUND OF NON - MENTION OF INITIATION OF PENALTY PROCEEDINGS. IT WAS HELD THAT THE LEARNED COMMISSIONER GAVE DIRECTION TO THE ASSESSING OFFICER TO MAKE FRESH ASSESSMENT TO INITIATE PENALTY PROCEEDINGS. IT WAS HELD THAT THE TRIBUNAL WAS JUSTIFIED IN CANCELIN G SUCH ORDER OF THE LEARNED COMMISSIONER PASSED UNDER SECTION 263 OF THE ACT. EXTRACTED BELOW IS PARA - 8 OF THE JUDGMENT: - 8. IT WAS CONTENDED BY MR. J.L. DAGA, LEARNED COUNSEL FOR THE REVENUE, THAT THE QUESTION OF LAW WHICH HAS BEEN STATED IN PARA. 5 OF THE REFERENCE APPLICATION DOES ARISE OUT OF THE ORDER OF THE TRIBUNAL DATED NOVEMBER 26, 1982, AS THE TRIBUNAL ITSELF HAS FOLLOWED ITS EARLIER DECISION RENDERED IN PARAS FABRICS, PALI'S CASE RELATING TO THE ASSESSMENT YEAR 1977 - 78. THE TRIBUNAL PREFERRED THE VIEW TAKEN IN J.K. D'COSTA'S CASE, [1982] 133 ITR 7 AND DID NOT FOLLOW THE CONTRARY VIEW TAKEN IN INDIAN PHARMACEUTICALS' CASE, [1980] 123 ITR 875 (MP). 6 ITA NO. 145/NAG/.2013 8 WE HAVE ALSO PERUSED THE DECISION OF THE HON'BLE DELHI HIGH COURT IN ACIT V/S J.K. DCOSTA, [19 82] 133 ITR 7 (DEL.) AND FOUND THAT THE HON'BLE COURT HAS OPINED THAT THOUGH THE EXPRESSION ASSESSMENT IS USED IN THE ACT WITH DIFFERENT MEANINGS IN DIFFERENT CONTEXTS, SO FAR AS S. 263 IS CONCERNED, IT REFERS TO A PARTICULAR PROCEEDINGS THAT BEING CONSID ERED BY THE CIT AND IT IS NOT POSSIBLE, WHEN THE CIT IS DEALING WITH THE ASSESSMENT PROCEEDINGS AND THE ASSESSMENT ORDER, TO EXPAND THE SCOPE OF THESE PROCEEDINGS AND TO VIEW THE PENALTY PROCEEDINGS ALSO AS PART OF THE PROCEEDINGS WHICH ARE BEING SOUGHT TO BE REVISED BY THE CIT. THERE IS NO IDENTITY BETWEEN THE ASSESSMENT PROCEEDINGS AND THE PENALTY PROCEEDINGS; THE LATTER ARE SEPARATE PROCEEDINGS, THAT MAY IN SOME CASES, FOLLOW AS A CONSEQUENCE OF THE ASSESSMENT PROCEEDINGS. ALL THAT THE LAW REQUIRES, SO F AR AS THE PENALTY PROCEEDINGS ARE CONCERNED, IS THAT THEY SHOULD BE INITIATED IN THE COURSE OF THE PROCEEDINGS FOR ASSESSMENT. ACCORDING TO THE HON'BLE COURT, THE PENALTY PROCEEDINGS DO NOT FORM PART OF THE ASSESSMENT PROCEEDINGS. LACK OF INITIATION OF PE NALTY PROCEEDINGS CANNOT BE SAID TO BE A VALID REASON TO HOLD SUCH AN ASSESSMENT ORDER AS ERRONEOUS ORDER. IT WAS CONCLUDED THAT THE SETTING ASIDE THE ENTIRE ASSESSMENT ORDER WAS NOT THE CORRECT WAY OF INVOCATION OF JURISDICTION UNDER SECTION 263 OF THE AC T. 9. EVEN THE HON'BLE MADRAS HIGH COURT HAS ADOPTED THE SAME VIEW WHILE PASSING A DECISION NAMELY CIT V/S CRK SWAMY [2002] 254 ITR 158 (MAD.). 10. OUR NEXT OBSERVATION IS THAT THE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) ARE GOVERNED BY THE LANGUAGE P RESCRIBED UNDER THE SAID SECTION WHICH SAYS THAT A SATISFACTION IS TO BE RECORDED BY THE ASSESSING OFFICER. AS PER THE PROVISIONS OF SECTION 271(1)(C) IF THE ASSESSING OFFICER IS SATISFIED THAT ANY PERSON HAS CONCEALED THE PARTICULARS OF HIS INCOME OR FU RNISH INACCURATE PARTICULARS OF SUCH INCOME, THEN HE MAY DIRECT THAT SUCH PERSON SHALL PAY BY WAY OF PENALTY AN AMOUNT AS PRESCRIBED THEREIN. IN THIS SECTION I.E., SECTION 271(1)(C), AT ONE MORE PLACE, I.E., 271(1B), IT IS PRESCRIBED THAT WHERE ANY AMOUNT IS ADDED OR DISALLOWED IN COMPUTING THE TOTAL INCOME OR LOSS IN ANY OR ALL ASSESSMENT AND THE SAID ORDER CONTAINS A DIRECTION FOR INITIATION OF PENALTY PROCEEDINGS UNDER CLAUSE - C OF SUB - SECTION (1), SUCH AN ORDER OF ASSESSMENT SHALL BE DEEMED TO CONSTITUTE SATISFACTION OF THE ASSESSING OFFICER FOR INITIATION OF PENALTY PROCEEDINGS. IF WE CAREFULLY READ BOTH THESE PROVISIONS OF SECTION 271, THEN IT IS VERY MUCH CLEAR THAT A SATISFACTION IS TO BE RECORDED BY THE ASSESSING OFFICER HIMSELF. THE ASSESSING OFFICE R IS NOT TO RECORD A SATISFACTION AT THE BEHEST OF ANY OTHER AUTHORITY. IT IS ASSESSING OFFICERS OWN SATISFACTION WHICH IS A SINE QUA NON FOR INITIATION OF 271(1)(C) PROCEEDINGS. HOWEVER, BY DIRECTING UNDER SECTION 263, TO PASS A FRESH ORDER INITIATING PE NALTY PROCEEDINGS UNDER SECTION 271(1)(C), THE LEARNED COMMISSIONER HAS TRIED TO IMPOSE HIS SATISFACTION ON THE DISCRETIONARY POWER OF RECORDING SATISFACTION TO THE ASSESSING OFFICER UNDER THE STATUTE. WE ARE OF THE VIEW THAT THE LEARNED COMMISSIONER 7 ITA NO. 145/NAG/.2013 HAS EXCEEDED HIS JURISDICTION BY ISSUING SUCH DIRECTIONS. WE, THEREFORE, QUASH SUCH DIRECTIONS. 11. UNDER THE TOTALITY OF THE FACTS AND CIRCUMSTANCES OF THE CASE AND IN THE LIGHT OF THE DISCUSSION MADE HEREIN ABOVE, ESPECIALLY FOLLOWING THE CASE LAWS CITED SUPRA, WE HEREBY QUASH THE IMPUGNED ORDER PASSED UNDER SECTION 263 OF THE ACT. THE GROUNDS ARE ALLOWED. 8. INTER ALIA, WE ARE OF THE VIEW THAT THE IMPUGNED OBSERVATION OF THE AO WAS ONLY REPRESENTING THE INITIATION OF PENALTY PROCEEDINGS. IT WAS NOT AN ORDER PASSED BY THE AO. LEARNED COMMISSIONER HAS HIMSELF MADE AN OBSERVATION WHILE PASSING THE ORDER U/S 263 THAT HE HAD FOUND THAT THE AO HAD INITIATED THE PENALTY PROCEEDINGS AFTER QUOTING A WRONG SECTION I.E. SECTION 271AAA. ACCORDING TO HIM, THIS DEFIC IENCY WAS TO BE REMOVED AND TO THAT EXTENT THE ORDER OF THE AO IS ERRONEOUS. ONCE THE ADMITTED FACTUAL POSITION WAS THAT THE LEARNED COMMISSIONER HAS SIMPLY INVOKED THE REVISIONAL JURISDICTION U/S 263 IN RESPECT OF AN OBSERVATION OF THE AO ABOUT INITIATIO N OF PENALTY PROCEEDINGS BUT NOT PERTAINING TO AN ORDER PASSED BY THE AO. HENCE WE HEREBY HOLD THAT THE LEARNED COMMISSIONER HAS WRONGLY INVOKED THE REVISIONAL JURISDICTION. THE LANGUAGE OF SECTION 263(1) IS UNAMBIGUOUS THAT THE LEARNED COMMISSIONER MAY C ALL FOR AND EXAMINE THE RECORD AND IF HE CONSIDERS THAT ANY ORDER PASSED BY THE AO IS ERRONEOUS, THEN DIRECT THE AO FOR A FRESH ASSESSMENT. WE, THEREFORE, CONCLUDE, RESPECTFULLY FOLLOWING THE CASE LAWS AS CITED BEFORE US, THAT THE IMPUGNED ORDER U/S 263 IS BAD IN LAW. HENCE DESERVES TO BE QUASHED. ACCORDINGLY, ASSESSEES GROUND IS ALLOWED. 9. IN THE RESULT, THE APPEAL FILED BY THE ASSESSEE IS ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON THIS 18 TH DAY OF DEC ., 2015. SD/ - SD/ - ( SHAMIM YAHYA) (MUKUL K. SHRAWAT) ACCOUNTANT MEMBER. JUDICIAL MEMBER NAGPUR, DATED: 18 TH DEC ., 2015. 8 ITA NO. 145/NAG/.2013 COPY FORWARDED TO : 1. BULDHANA URBAN CO - OP. CREDIT SOCIETY LTD., SAHAKARI SETU, HUTATMA GOREPETH, DIST. BULDHANA., 2. A .C.I.T., CENTRAL CIRCLE - 1 ( 4 ), NAGPUR. 3. C.I.T. (CENTRAL), NAGPUR. 4. D.R., ITAT, NAGPUR. 5. GUARD FILE TRUE COPY BY ORDER ASSISTANT REGISTRAR, INCOME TAX APPELLATE TRIBUNAL, NAGPU R BENCH, NAGPUR.