SMT. DAVINDER KAUR BHAINS, JALANDHAR V. PRINCIPAL COMMISSIONER OF INCOME TAX -1, JALANDHAR

ITA 4/ASR/2021

• Counselvise Citation: [2021] 107 COUNSELVISE.COM (IT) 2797 (ITAT-AMRITSAR)
• Duration Of Justice: 8 month(s) 15 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 14-10-2021
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2015-2016
• Appeal Filed On: 29-01-2021
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Keywords: Revision of order; Question of law; Assessment record; Revised return; Penny stocks; Set aside; Capital Gains; Bogus
• Section: 6; 263; 271(1)(c); 143(3); 139(5); 201; 251; 143(2); 192; 48; 13

Judgement Text

IN THE INCOME TAX APPELLATE TRIBUNAL AMRITSAR BENCH, AMRITSAR BEFORE SHRI LALEIT KUMAR, JUDICIAL MEMBER AND SHRI M.L. MEENA, ACCOUNTANT MEMBER ITA NO. 04/ASR/2021 ASSESSMENT YEAR: 2015-16 DAVINDER KAUR BAINS, VS. PR. CIT- 1, C/O SANT RUBBER LTD., JALANDHAR 373-374, LEATHER COMPLEX, JALANDHAR. PAN : AGTPB4204E ITA NO. 05/ASR/2021 ASSESSMENT YEAR: 2015-16 GURBACHAN SINGH BAINS, VS. PR. CIT- 1, C/O SANT RUBBER LTD., JALANDHAR 373-374, LEATHER COMPLEX, JALANDHAR. PAN : ABZPB7173K (APPELLANT) (RESPONDENT) APPELLANT BY : SH. ASHRAY SARNA, CA RESPONDENT BY: SH. RAHUL DHAWAN, CIT/DR DATE OF HEARING: 24.09.2021 DATE OF ORDER : 14.10.2021 ORDER PER LALEIT KUMAR, J.M. THESE TWO APPEALS ARE DIRECTED BY ASSESSEES AGAINST THE ORDERS DATED 15.12.2020 PASSED BY LD. PR. CIT-1, JALANDHAR U/S. 263 OF THE 2 INCOME-TAX ACT (THE ACT FOR SHORT) FOR THE ASSESS MENT YEAR 2015- 16. SINCE COMMON ISSUES ARE INVOLVED IN BOTH THE AP PEALS IN THE IDENTICAL GROUNDS, FACTS AND CIRCUMSTANCES, THE SAM E ARE DISPOSED OF BY THIS CONSOLIDATED ORDER FOR THE SAKE OF BREVI TY. FOR CONVENIENCE, WE SHALL DECIDE THE APPEAL IN ITA NO. 04/ASR./2021 FIRST AND TAKE THE FACTS THERE FROM. THE GROUNDS RA ISED IN THIS APPEAL READ AS UNDER : 1. THAT THE ORDER PASSED BY THE HONBLE PR. CIT DA TED 15.12.2020 IS AGAINST THE LAW AND FACTS OF THE CASE. 2. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, HONBLE PR. CIT HAS ERRED IN LAW AND ON FACTS IN FRAMING THE IM PUGNED ASSESSMENT ORDER U/S 263 OF THE ACT AND WITHOUT COMPLYING WITH THE M ANDATORY CONDITIONS U/S 263 AS ENVISAGED UNDER THE INCOME TAX ACT, 1961. 3. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, HONBLE PR. CIT HAS WRONGLY ASSUMED JURISDICTION UNDER SECTION 263 OF THE ACT TO SET- ASIDE THE ASSESSMENT ORDER DATED 29.09.2017 PASSED BY THE ASSESSING OFFICER IN AS MUCH AS THE ORDER IS NEITHER ERRONEOU S NOT PREJUDICIAL TO THE INTEREST OF REVENUE AND AS SUCH THE ASSUMPTION OF J URISDICTION UNDER SECTION 263 OF THE ACT BEYOND HIS JURISDICTION. 4. THAT HAVING REGARD TO THE FACTS AND CIRCUMSTANCE S OF THE CASE, HONBLE PR. CIT HAS ERRED IN LAW AND ON FACTS IN DIRECTING AO T O INITIATED PENALTY U/S 271(L)(C) OF THE INCOME TAX ACT AMOUNTING TO RS. 1, 20,39,827/-, WITHOUT CONSIDERING THE FACTS OF THE CASE AND SUBMISSIONS O F THE ASSESSEE. 5. THAT THE APPELLANT CRAVES THE LEAVE TO ADD, MODI FY, AMEND OR DELETE ANY OF THE GROUNDS OF APPEAL AT THE TIME OF HEARING AND ALL THE ABOVE GROUNDS ARE WITHOUT PREJUDICE TO EACH OTHER. 3 2. IN THIS CASE, LD. AR HAS DRAWN OUR ATTENTION T O THE SHOW CAUSE NOTICE ISSUED BY THE PCIT AT PAGE 15 OF THE P APER BOOK, WHERE IT IS MENTIONED AS UNDER : PERUSAL OF THE ASSESSMENT RECORDS SHOWS THAT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, AN AMOUNT OF RS.1,20,39,827 /- HAS BEEN SURRENDERED WHEN YOU WERE CONFRONTED WITH THE EVIDE NCE IN RESPECT OF BOGUS AND DUBIOUS LONG TERM CAPITAL GAIN ON SALE OF PENNY STOCKS. THE ASSESSING OFFICER HAS FAILED TO INITIATE PENALTY U/ S. 271(1)(C) OF THE INCOME TAX ACT, 1961. 3. IT WAS SUBMITTED BY THE LD. AR THAT A SEARCH WAS CARRIED OUT IN THE PREMISES OF THE ASSESSEE AND DURING THE SEARCH THE ASSESSEE WAS CONFRONTED WITH THE LONG TERM CAPITAL GAINS. SU MMONS WAS ISSUED U/S. 131(1) OF THE ACT ON 18.12.2015 AND IN RESPONSE THERETO, THE ASSESSEE FILED SUBMISSIONS AND OFFERED FOR SURR ENDER OF LONG TERM CAPITAL GAINS OF RS.1,20,39,827/- FOR THE SALE OF SHARES IN THE ASSESSMENT YEAR 2015-16. HOWEVER, IN THE SAID SURR ENDER, THE ASSESSEE SUBMITTED THAT THE ASSESSEE IS MAKING SURR ENDER TO PURCHASE PEACE OF MIND AND TO AVOID FURTHER LITIGAT ION. IT WAS FURTHER SUBMITTED THAT THE SAID SURRENDER WOULD BE SUBJECT TO THE FACT THAT NO PENAL ACTION SHALL BE INITIATED AGAINS T THE ASSESSEE BY THE ASSESSING OFFICER. 4 4. THE ASSESSEE AFTER MAKING THE SURRENDER FILED TH E REVISED RETURN OF INCOME IN ACCORDANCE WITH LAW BY DECLARIN G THE LONG TERM CAPITAL GAINS FOR THE SALE OF SHARES ON 09.02.2016. 5. THEREAFTER, THE CASE OF THE ASSESSEE WAS SELECTE D FOR SCRUTINY UNDER CASS AND NOTICE U/S. 143(2) WAS ISSUED ON 26. 07.2016. AFTER CONSIDERING THE SURRENDERED INCOME OF THE ASSESSEE, THE RETURN OF ASSESSEE WAS PROCESSED AND THE REVISED RETURN OF IN COME WAS ACCEPTED BY THE ASSESSING OFFICER. IT MAY BE PERTIN ENT TO MENTION HERE THAT NO PENALTY ACTION WAS INITIATED AGAINST T HE ASSESSEE. 6. LEARNED PCIT, AS MENTIONED HEREIN ABOVE, ISSUED A SHOW CAUSE TO THE FOLLOWING EFFECT : ON PERUSAL OF THE ORDER U/S. 143(3) OF THE INCOME- TAX ACT, 1961 DATED 29.09.2017, IN YOUR CASE AND ON EXAMINATION OF RECO RD FOR THE ASSESSMENT YEAR 2015-16, THE FOLLOWING DISCREPANCIES HAVE BEEN NOTICED: PERUSAL OF THE ASSESSMENT RECORDS SHOWS THAT DURIN G THE COURSE OF ASSESSMENT PROCEEDINGS, AN AMOUNT OF RS.1,20,39,827 /- HAS BEEN SURRENDERED WHEN YOU WERE CONFRONTED WITH THE EVIDE NCE IN RESPECT OF BOGUS AND DUBIOUS LONG TERM CAPITAL GAIN ON SALE OF PENNY STOCKS. THE ASSESSING OFFICER HAS FAILED TO INITIATE PENALTY U/ S. 271(1)(C) OF THE INCOME TAX ACT, 1961. 2. ACCORDINGLY, IN VIEW OF ABOVE DISCREPANCIES, I P ROPOSE TO HOLD THE SAID ORDER TO BE ERRONEOUS, IN SO FAR AS IT IS PREJUDICI AL TO THE INTERESTS OF REVENUE AND TAKE SUITABLE REMEDIAL ACTION, AS PER S ECTION 263 OF THE INCOME TAX ACT, 1961. YOUR REPLY/OBJECTIONS, IF ANY, TO TH E PROPOSED ACTION CAN BE 5 FILED BEFORE THE UNDERSIGNED BY 29/01/2019 ON WHICH DATE YOUR CASE STANDS FIXED FOR HEARING AT 11.30 A.M. IN THE OFFICE OF TH E UNDERSIGNED. 7. LEARNED PCIT, THEREFORE, SOUGHT TO INVOKE THE JURIS DICTION U/S. 263 OF THE ACT ON THE GROUND THAT THE ORDER PASSED BY THE ASSESSING OFFICER WAS ERRONEOUS AND PREJUDICIAL TO THE INTERE STS OF REVENUE. THE ASSESSEE AFTER RECEIPT OF THE NOTICE HAD FILED DETAILED REPLY AND SUBMITTED THAT THE ACTION ON THE PART OF THE ASSESS ING OFFICER WAS IN ACCORDANCE WITH LAW AND FURTHER LD. PCIT HAD NO JUR ISDICTION TO INVOKE JURISDICTION U/S. 263 OF THE ACT. FOR THE PR OPOSE OF FAILURE TO INITIATE PENALTY PROCEEDINGS AGAINST THE ASSESSEE B Y THE ASSESSING OFFICER AND HE RELIED UPON THE DECISION OF HONBLE PUNJAB AND HARYANA HIGH COURT IN THE MATTER OF CIT V. SUBHASH KUMAR JAIN, 335 ITR 364, WHEREIN, HONBLE PUNJAB & HARYANA HIGH COU RT IN PARA 9 & 10 HELD AS UNDER : 9. NOW ADVERTING TO THE SECOND LIMB, IT MAY BE NOT ICED THAT THE DELHI HIGH COURT IN JUDGMENT REPORTED IN ADDI. CIT VS. J.K.D. COSTA (1982) 133 ITR 7 (DEL) : (1981) 25 CTR (DEL) 224 HAS HELD THAT THE CIT CANNO T PASS AN ORDER UNDER S. 263 OF THE ACT PERTAINING TO IMPOSITION OF PENALTY WHER E THE ASSESSMENT ORDER UNDER S. 143(3) IS SILENT IN THAT RESPECT. THE RELE VANT OBSERVATIONS RECORDED ARE : 'IT IS WELL ESTABLISHED THAT PROCEEDINGS FOR THE LE VY OF A PENALTY WHETHER UNDER S. 271(1)(A) OR UNDER S. 273(B) ARE PROCEEDIN GS INDEPENDENT OF AND SEPARATE FROM THE ASSESSMENT PROCEEDINGS. THOUGH TH E EXPRESSION 'ASSESSMENT' IS USED IN THE ACT WITH DIFFERENT MEAN INGS IN DIFFERENT CONTEXTS, SO 6 FAR AS S. 263 IS CONCERNED, IT REFERS TO A PARTICUL AR PROCEEDING THAT IS BEING CONSIDERED BY THE CIT AND IT IS NOT POSSIBLE WHEN T HE CIT IS DEALING WITH THE ASSESSMENT PROCEEDINGS AND THE ASSESSMENT ORDER TO EXPAND THE SCOPE OF THESE PROCEEDINGS AND TO VIEW THE PENALTY PROCEEDIN GS 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. AS THE T RIBUNAL HAS POINTED OUT, THOUGH IT IS USUAL FOR THE ITO TO RECORD IN THE ASS ESSMENT ORDER THAT PENALTY PROCEEDINGS ARE BEING INITIATED, THIS IS MORE A MAT TER OF CONVENIENCE THAN OF LEGAL REQUIREMENT. ALL THAT THE LAW REQUIRES, SO FA R AS THE PENALTY PROCEEDINGS ARE CONCERNED, IS THAT THEY SHOULD BE INITIATED IN THE COURSE OF THE PROCEEDINGS FOR ASSESSMENT. IT IS SUFFICIENT IF THERE IS SOME R ECORD SOMEWHERE, EVEN APART FROM THE ASSESSMENT ORDER ITSELF, THAT THE ITO HAS RECORDED HIS SATISFACTION THAT THE ASSESSEE IS GUILTY OF CONCEALMENT OR OTHER DEFA ULT FOR WHICH PENALTY ACTION IS CALLED FOR. INDEED, IN CERTAIN CASES IT IS POSSI BLE FOR THE ITO TO ISSUE A PENALTY NOTICE OR INITIATE PENALTY PROCEEDINGS EVEN LONG BE FORE THE ASSESSMENT IS COMPLETED THOUGH THE ACTUAL PENALTY ORDER CANNOT BE PASSED UNTIL THE ASSESSMENT IS FINALISED. WE, THEREFORE, AGREE WITH THE VIEW TAKEN BY THE TRIBUNAL THAT THE PENALTY PROCEEDINGS DO NOT FORM P ART OF THE ASSESSMENT PROCEEDINGS AND THAT THE FAILURE OF THE ITO TO RECO RD IN THE ASSESSMENT ORDER HIS SATISFACTION OR THE LACK OF IT IN REGARD TO THE LIVEABILITY OF PENALTY CANNOT BE SAID TO BE A FACTOR VITIATING THE ASSESSMENT ORDER IN ANY RESPECT. AN ASSESSMENT CANNOT BE SAID TO BE ERRONEOUS OR PREJUDICIAL TO TH E INTEREST OF THE REVENUE BECAUSE OF THE FAILURE OF THE ITO TO RECORD HIS OPI NION ABOUT THE LEVIABILITY OF PENALTY IN THE CASE.' 10. SPECIAL LEAVE PETITION AGAINST THE SAID DECISIO N WAS DISMISSED BY THE APEX COURT (1984) 147 ITR (ST) 1. THE SAME VIEW WAS REITERATED BY THE DELHI HIGH COURT IN CIT VS. SUDERSHAN TALKIES (1993) 112 CTR (DEL) 165 : (1993) 201 ITR 289 (DEL) AND FOLLOWED IN CIT VS. NIHAL CHAND R EKYAN (1999) 156 CTR (DEL) 59 : (2000) 242 ITR 45 (DEL). THE RAJASTHAN HIGH CO URT IN CIT VS. KESHRIMAL PARASMAL (1985) 48 CTR (RAJ) 61 : (1986) 157 ITR 48 4 (RAJ) . GAUHATI HIGH COURT IN SURENDRA PRASAD SINGH & ORS. VS. CIT (1988) 173 I TR 510 (GAU) : (1988) 71 CTR (GAU) 125 AND CALCUTTA HIGH COURT IN CIT VS. LINOTY PE & MACHINERY LTD. (1991) 192 ITR 337 (CAL) HAVE FOLLOWED THE JUDGMENT OF DEL HI HIGH COURT IN J.K.D' COSTA'S CASE (SUPRA). 7 8. LD. AR HAD ALSO DRAWN OUR ATTENTION TO THE ORDER DATED 30.12.2019 PASSED BY THE COORDINATE BENCH IN ITA NO .486/ASR/2018 WHERE IN PARA 3.1, THE COORDINATE BENCH HELD AS UND ER : 3.1. WE REALIZE THAT WHILE DEALING WITH THE PENALT Y ORDER, THE LD. CIT(A) NOT ONLY CONSIDERED THE PECULIAR FACTS AND C IRCUMSTANCES TO THE EFFECT THAT THE PENALTY HAS BEEN IMPOSED BY THE A.O . MERELY ON THE BASIS OF SURRENDERED INCOME MADE BY THE ASSESSEE IN THE COUR SE OF INVESTIGATION PROCEEDINGS BEFORE THE ADIT AND THE ASSESSEE HAS AL SO FILED HIS REVISED RETURN OF INCOME AND FURTHER NO INDEPENDENT ENQUIRI ES HAVE BEEN MADE OR ANY FINDING HAS BEEN GIVEN BY THE AO OR ANY OTHER A DVERSE MATERIAL HAVE BEEN BROUGHT ON RECORD IN THE COURSE OF PENALTY PRO CEEDINGS TO HOLD THAT THE APPELLANT HAS FURNISHED INACCURATE PARTICULARS OF HIS INCOME OR HAS CONCEALED THE INCOME. ULTIMATELY, THE LD. CIT(A) DE LETED THE PENALTY OF RS.63,68,527/- IMPOSED BY THE AO. WE HAVE GIVEN OUR THOUGHTFUL CONSIDERATION TO THE F INDINGS OF THE LD. CIT(A) WHEREIN HE HAS ANALYZED ALL THE PECULIAR FACTS AND CIRCUMSTANCES OF THE CASE AND RIGHTLY HELD THAT THE PENALTY HAS BEEN IMPOSED MERELY ON THE BASIS OF SURRENDERED INCOME DURING THE INVESTIGATION PROCEED INGS AND IT IS A FACT THAT THE ASSESSEE CORRECTED HIS RETURN BY FILING A REVISED RETURN OF INCOME. IT IS ALSO A FACT THAT NO ADVERSE MATERIAL WAS AVAILAB LE BEFORE THE AO TO FASTEN THE LIABILITY AGAINST THE ASSESSEE QUA FURNISHING O F PARTICULARS OF INCOME OR CONCEALING THE INCOME. CONSEQUENTLY, ON THE AFORESA ID REASONS THE DELETION OF PENALTY BY THE LD. CIT(A) IS SUSTAINABLE AND HEN CE THE ORDER UNDER CHALLENGE DOES NOT REQUIRE ANY INTERFERENCE BY THIS BENCH. 9. IT WAS SUBMITTED BY THE LD. AR THAT THE ORDER PA SSED BY THE LD. PCIT, DISMISSING THE OBJECTIONS OF THE ASSESSEE WAS NOT IN ACCORDANCE WITH LAW AND THE PRESENT APPEAL, THUS, H AS TO BE ALLOWED. 8 10. ON THE OTHER HAND, LD. DR HAD DRAWN OUR ATTENTI ON TO THE ORDER PASSED BY LD. PCIT WHEREIN, IT WAS THE CASE O F LD. PCIT THAT THE SURRENDER WAS MADE BY THE ASSESSEE ONLY AFTER THE R ECEIPT OF SUMMONS U/S. 131(1A) ON 18.12.2015 AND THE SAID SUR RENDER WAS NOT VOLUNTARY. HE HAD ALSO RELIED UPON A DECISION O F HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF RAJESH CHAWLA V . CIT, 154 TAXMAN 364, WHERE THE HONBLE HIGH COURT HELD THAT THE PENALTY IS REQUIRED TO BE LEVIED IN CASE THE ASSESSEE SURRENDE RS THE AMOUNT ON ACCOUNT OF SOME ACTION ON THE PART OF REVENUE AUTHO RITIES. HE RELIES UPON PARAGRAPH NO. 4 AT PAGE 6 OF THE ORDER TO THE FOLLOWING EFFECT : 4. THE ABOVE DISCUSSION BY THE TRIBUNAL CLEARLY SH OWS THAT IT WAS NOT A CASE OF BONA FIDE VOLUNTARY DISCLOSURE BUT ONLY TO AVOID CONSEQUENCES OF LAW. IT IS NOT POSSIBLE TO HOLD THAT IN EVERY CASE, MERE SURRENDER OF INCOME WILL FORECLOSE ANY ACTION FOR CONCEALMENT OF INCOME. JUDGMENTS OF THE HON'BLE SUPREME COURT IN SIR SHADI LAI (SUPR A) AND CIT VS. SURESH CHANDRA MITTAL (2001) 170 CTR (SC) 182 : (2001) 251 ITR 9 (SC) HAVE RIGHTLY BEEN DISTINGUISHED BY THE TRIBUNAL. FINDING S RECORDED BY THE TRIBUNAL CANNOT BE HELD TO BE PERVERSE IN ANY MANNE R, THE SAME BEING BASED ON RELEVANT MATERIAL. THE ASSESSEES HAVE BEEN HELD TO BE MEMBERS OF THE SAME FAMILY AND IT HAS ALSO BEEN FOU ND THAT REVISED RETURNS WERE FILED ON COMING TO KNOW ABOUT DETECTIO N OF CONCEALMENT. A DIVISION BENCH OF THIS COURT IN PADAM KUMAR GARG VS. ITO & ANR. (2005) 26 IT REP 26 (P&H), HELD THAT ASSESSEE COULD NOT ESCAPE PENALTY MERELY ON THE GROUND THAT HE HAD SURRENDERED THE AM OUNT. SIMILAR VIEW HAS BEEN TAKEN IN P.C. JOSEPH & BROS. VS. CIT (2000) 158 CTR (KER) 104 : 9 (2000) 240 ITR 818 (KER) AND CIT VS. SUDHARSHAN SIL KS & SAREES (2001) 171 CTR (KAR) 256 : (2002) 253 ITR 145 (KAR). ACCORDINGLY, NO SUBSTANTIAL QUESTION OF LAW ARISES. THE APPEALS ARE DISMISSED. 11. LD. DR FURTHER DREW OUR ATTENTION TO EXPLANATIO N-2 TO SECTION 263 WHEREIN THE POWER WAS GIVEN TO THE PCIT TO PASS ORDER IN CASE THE ASSESSING OFFICER FAILS TO MAKE ADEQUATE AND NE CESSARY INQUIRIES FOR THE PURPOSE OF PROCEEDINGS UNDER THE ACT. 12. WE HAVE HEARD THE RIVAL SUBMISSIONS AND HAVE GO NE THROUGH THE MATERIAL ON RECORD. THE UNDISPUTED FACTS BEFORE US ARE THAT THE INVESTIGATION WING HAD ISSUED THE SUMMONS TO THE AS SESSEE ON 18.12.2015 AND THEREAFTER THE ASSESSEE HAD SURRENDE RED LONG TERM CAPITAL GAINS TO THE TUNE OF THE AMOUNT MENTIONED A BOVE. THEREAFTER, THE ASSESSEE HAD ALSO FILED REVISED RET URN OF INCOME. HONBLE PUNJAB AND HARYANA HIGH COURT IN THE CASE O F CIT V. SUBHASH KUMAR JAIN (SUPRA), HAS HELD THAT IN CASE THE ASSESS ING OFFICER CHOSE NOT TO LEVY PENALTY IN THE ASSESSMENT PROCEEDINGS, THEN LD. PCIT DOES NOT HAVE JURISDICTION TO INITIATE ACTION U/S. 263 BY ALLEGING THAT THE ORDER WAS ERRONEOUS AS WELL AS PREJUDICIAL TO T HE INTEREST OF 10 REVENUE. WE WHOLLY AGREE WITH THE VIEW TAKEN BY HON BLE HIGH COURT IN THE REPORTED CASE. HOWEVER, THE MATTER DO ES NOT REST AT THIS STAGE ONLY. FOR THE PURPOSE OF IMPOSING A PENA LTY U/S. 271(1)(C), BESIDES FULFILMENT OF VARIOUS REQUIREMENTS OF LAW, IT IS NECESSARY THAT THE ASSESSING OFFICER OR THE CIT IN THE COURSE OF ANY PROCEEDINGS, TO RECORD SATISFACTION THAT THERE IS C ONCEALMENT OF PARTICULARS OF INCOME OR FURNISHING OF INACCURATE P ARTICULARS OF SUCH INCOME. THE STATUTE HAS CONSCIOUSLY USED THE WORDS IN THE COURSE OF ANY PROCEEDING UNDER THE ACT. THE IMPORTANT ASP ECT TO BE EXAMINED IS WHETHER THE ASSESSING OFFICER WAS SATIS FIED IN THE COURSE OF ANY PROCEEDINGS BEFORE HIM OR NOT WITH RE SPECT TO FURNISHING OF INACCURATE PARTICULARS OF INCOME OR C ONCEALMENT OF PARTICULARS OF INCOME. THE ASSESSING OFFICER IS DEF INED UNDER SECTION 2(7A) OF THE ACT AND THE POWER OF THE ASSESSING OFF ICER ARE PROVIDED U/S. 124 OF THE ACT. THE CONJOINT READING OF SECTIO N 2(7A) AND SECTION 124 THROW LIGHT ON THE SCOPE AND AMBIT OF T HE PROCEEDINGS BEFORE THE ASSESSING OFFICER. MEANING THEREBY, IF T HE ASSESSING OFFICER IS IN SESSION OF THE PROCEEDINGS BEFORE HIM IN ACCORDANCE WITH LAW, OR SEIZED OF ANY MATTER, AND DURING THAT PROCEEDING, THE 11 ASSESSING OFFICER IS SATISFIED THAT THERE IS ANY CO NCEALMENT OF INCOME OR FURNISHING OF INACCURATE PARTICULARS OF I NCOME, THEN THE PENALTY IS REQUIRED TO BE INITIATED. IN THE PRESENT CASE, THE ASSESSING OFFICER, OF WHICH THE ORDER WAS UNDER REVISION U/S. 263, WAS NOT SEIZED TO ANY PROCEEDING PRIOR TO SELECTION OF THE CASE UNDER SCRUTINY ASSESSMENT. ADMITTEDLY, THE ASSESSEE IN TH E PRESENT CASE HAD SURRENDERED THE CAPITAL GAINS AND FILED REVISED RETURN OF INCOME ON 09.02.2016. THEREFORE, IF THE REVISED RETURN IS FILED BY THE ASSESSEE AND THE SAME WAS SELECTED FOR SCRUTINY ASS ESSMENT AND THE ASSESSING OFFICER THEREAFTER ACCEPTED THE REVISED R ETURN OF INCOME, WHERE WAS THE OCCASION FOR THE ASSESSING OFFICER TO SATISFY HIMSELF THAT THERE WAS ANY CONCEALMENT OF INCOME OR FURNISH ING OF INACCURATE PARTICULARS OF SUCH INCOME? IN OUR CONSI DERED OPINION, THE STAGE WAS PRIOR TO ISSUANCE OF JURISDICTIONAL N OTICE U/S. 143(2) BY THE ASSESSING OFFICER, AS THE JURISDICTION OF THE A SSESSING OFFICER COMMENCES WITH THE ISSUANCE OF JURISDICTIONAL NOTIC E U/S. 143(2) AND NOT PRIOR THERETO. IT IS FOR THE ASSESSING OFFI CER (AS DEFINED U/S. 2(7A) INCLUDING THE VARIOUS AUTHORITIES MENTIONED T HEREIN, TO TAKE NOTE OF ANY CONCEALMENT OF INCOME BY THE ASSESSEE D URING 12 ASSESSMENT PROCEEDINGS U/S. 143(3) AND TO IMPOSE TH E PENALTY U/S. 271(1)(C) OF THE ACT. ADMITTEDLY, THERE WAS NO SATI SFACTION RECORDED BY THE ASSESSING OFFICER AND THERE WAS NO OCCASION TO RECORD THE SATISFACTION, AS THE REVISED RETURN WAS FILED IN AC CORDANCE WITH SECTION 139(5) OF THE ACT, AND IF THE REVISED RETUR N IS FILED IN ACCORDANCE WITH LAW THEN AS PER DECISION OF HONBLE SUPREME COURT IN THE MATTER OF DALMIA POWER LTD., 112 TAXMANN.COM 252 (SC) WOULD BE TREATED AS ORIGINAL RETURN FOR ALL PURPOSE S AND FOR THIS PURPOSE, NO FAULT CAN BE ATTRIBUTED TO THE ASSESSEE NOR CAN IT BE SAID THAT THE ASSESSEE HAD NOT MADE TRUE AND CORREC T DECLARATION OF INCOME IN THE REVISED RETURN. IN OUR CONSIDERED OPI NION, LD. DR FAILED TO MAKE A DISTINCTION BETWEEN THE INVOCATION OF JUR ISDICTION U/S. 263 AND THE IMPOSITION OF PENALTY ON ACCOUNT OF THE FA CT THAT THE ASSESSEE WAS MADE TO DISCLOSE THE INCOME ON ACCOUNT OF THE INVESTIGATION. IN OUR CONSIDERED OPINION, THE JUDGM ENT RELIED UPON BY THE LD. CIT/DR IN RAJESH CHAWLA VS. CIT(SUPRA) W AS DATED 22.05.2006. HOWEVER, THE SUBSEQUENT JUDGMENT RELIED UPON BY THE ASSESSEE IN THE CASE OF CIT VS. SUBHASH KUMAR JAIN ( SUPRA) WAS DATED 10.09.2010. BOTH THE JUDGMENTS OF HONBLE PUNJAB AN D HARYANA 13 HIGH COURT WERE RENDERED BY THE BENCH CONSISTING OF HONBLE J. ADARSH KUMAR GOYAL. THEREFORE, AS PER PRINCIPLE OF INTERPRETATION, THE JUDGMENT WHICH IS LATTER IN TIME, IS REQUIRED T O BE FOLLOWED VIS A VIS THE FORMER JUDGMENT IF PASSED BY STRENGTH OF SA ME JUDGES. 13. NEXT POINT RAISED DURING THE COURSE OF ARGUMENT S BEFORE US WAS THAT AS PER EXPLANATION 2 TO SECTION 263, THE P CIT WAS RIGHT IN INVOKING THE JURISDICTION, AS THE ASSESSING OFFICER SHOULD HAVE IMPOSED THE PENALTY ON ASSESSEE AND THE FAILURE TO IMPOSE PENALTY IS AN ACT WHICH IS PREJUDICIAL TO THE INTEREST OF R EVENUE. THEREFORE, RELIANCE ON EXPLANATION 2 TO SECTION 263 WAS MADE. IN OUR CONSIDERED OPINION, PCIT HAD NEITHER DIRECTLY NOR B Y IMPLIEDLY REFERRED TO EXPLANATION 2 TO SECTION 263 IN SUPPORT OF THE ORDER PASSED BY HIM. THEREFORE, IN OUR CONSIDERED OPINION , LD. DR IS NOT PERMITTED TO WIDEN THE SCOPE OF THE ORDER PASSED BY THE LD. PCIT BY RELYING UPON AN ISSUE WHICH WAS NOT CONSIDERED BY T HE PCIT. IT IS SETTLED LAW THAT THE LD. DR CANNOT CANVASS A CASE C ONTRARY TO THE CASE OF ASSESSING OFFICER OR THE CASE OF THE PCIT A ND FOR THAT PURPOSE WE MAY FRUITFULLY RELY UPON THE DECISION IN THE CASE OF 14 MAHINDRA & MAHINDRA VS. DCIT (2010) 122 ITD-216, WH ICH WAS APPROVED BY HONBLE BOMBAY HIGH COURT. IN THE LIGHT OF THE ABOVE, WE ARE OF THE CONSIDERED OPINION THAT THE ACTION ON THE PART OF LD. PCIT TO SET ASIDE THE ASSESSMENT ORDER PASSED BY TH E ASSESSING OFFICER WAS WITHOUT ANY BASIS AND WE ACCORDINGLY QU ASH THE ORDER OF LD. PCIT. 14. AS NOTED ABOVE, SINCE IDENTICAL FACTS AND CIRCU MSTANCES ARE INVOLVED IN ITA NO.05/ASR/2021 IN THE CASE OF GURBA CHAN SINGH BAINS, OUR DECISION IN ITA NO. 04/ASR/2021, RECORDE D HEREIN ABOVE, SHALL APPLY MUTATIS MUTANDIS IN THIS CASE ALSO. 15. IN THE RESULT, BOTH THE APPEALS OF THE ASSESSEE S ARE ALLOWED. ORDER PRONOUNCED IN THE OPEN COURT ON 14/10/2021 SD/- SD/- (M.L. MEENA) (LALEIT KUMAR) ACCOUNTANT MEMBER JUDICIAL MEMBER DATED: AKS COPY FORWARDED TO: 1. APPELLANT 2. RESPONDENT 3. CIT 4. CIT(APPEALS) 5. DR: ITAT ASSISTANT REGISTRAR ITAT AMRITSAR