Nandkumar Bhalchandra Bhondve, Pune V. Commissioner of Income-tax - V,

ITA 943/PUN/2014

• Counselvise Citation: [2016] 131 COUNSELVISE.COM (IT) 1087 (ITAT-PUNE)
• Duration Of Justice: 2 year(s) 3 month(s) 9 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 17-08-2016
• Appeal Filed By: Assessee
• Order Result: Partly Allowed
• Bench Allotted: B
• Next Hearing Date: 08-08-2016
• Assessment Year: 2009-2010
• Appeal Filed On: 08-05-2014
• Result in Favour of: Partly Allowed
• Court: TRIBUNAL
• Department Lawyers: A S SINGH
• Keywords: Initiation of penalty proceedings; Assessment record; Revised return
• Section: 143(3); 263; 63

Judgement Text

] ]] ] IN THE INCOME TAX APPELLATE TRIBUNAL PUNE BENCH B, PUNE , !', $ % BEFORE SHRI VIKAS AWASTHY, JM AND SHRI PRADIP KUMAR KEDIA, AM ITA NO.943/PN/2014 ASSESSMENT YEAR : 2009-10 SHRI NANDKUMAR BHALCHANDRA BHONDVE, N. D. TOWER, AKURDI GAON, PUNE 411 044. PAN : AAUPB5027G . APPELLANT VS. THE ASSTT. COMMISSIONER OF INCOME TAX, CIRCLE- 9, PUNE. . RESPONDENT / APPELLANT BY : SHRI KISHOR PHADKE / RESPONDENT BY : SHRI A. S. SINGH (CIT) / DATE OF HEARING : 10.08.2016 / DATE OF PRONOUNCEMENT: 17.08.2016 & / ORDER PER PRADIP KUMAR KEDIA, AM : THE CAPTIONED APPEAL FILED BY THE ASSESSEE IS DIREC TED AGAINST THE ORDER OF THE COMMISSIONER OF INCOME TAX-V, PUNE (IN SHORT THE COMMISSIONER), DATED 28.03.2014 WHEREBY THE ASSESSMENT ORDER PASSE D BY THE ASSESSING OFFICER IN RELATION TO ASSESSMENT YEAR 2009-10 PASS ED UNDER SECTION 143(3) OF THE INCOME TAX ACT, 1961 (IN SHORT THE ACT) DATED 26.12.2011 WAS HELD TO BE ERRONEOUS IN SO FAR AS IT WAS PREJUDICIAL TO THE IN TERESTS OF THE REVENUE WITHIN THE MEANING OF SECTION 263 OF THE ACT. 2. THE SHORT FACTS ARE THAT THE ASSESSEE IS ENGAGED IN THE BUSINESS AS PROMOTERS, BUILDERS AND CIVIL CONTRACTORS. THE ASS ESSMENT ORDER UNDER SECTION 143(3) OF THE ACT IN RESPECT OF ASSESSMENT YEAR 200 9-10 WAS PASSED ON 26.12.2011 DETERMINING THE TOTAL INCOME AT RS.3,16, 27,430/-. THE 2 ITA NO.943/PN/2014 COMMISSIONER UNDER ITS SUPERVISIONARY JURISDICTION NOTICED THAT THE ASSESSEE HAS FILED RETURN OF INCOME ON 29.10.2009 SHOWING IN COME OF RS.28,72,910/- AND THEREAFTER A REVISED RETURN WAS FILED ON 14.10. 2010 DECLARING TOTAL INCOME OF RS.95,55,430/-. THE ASSESSING OFFICER, WHILE FR AMING THE ASSESSMENT UNDER SECTION 143(3) BASED ON REVISED RETURN, MADE CERTAI N ADDITIONS ON ACCOUNT OF CREDITORS APPEARING IN THE BALANCE SHEET OF THE ASS ESSEE TO THE TUNE OF RS.2,20,72,000/- IN AGGREGATE. IN RESPECT OF SUCH ADDITION, THE ASSESSING OFFICER NOTED THAT AMOUNT OF RS.25,72,000/- AND RS. 75,50,000/- WRITTEN BACK TOWARDS OUTSTANDING CREDITORS AS OFFERED BY THE ASS ESSEE IS ADDED TO THE TOTAL INCOME OF THE ASSESSEE. THE ASSESSEE ALSO CAME FOR WARD TO OFFER ANOTHER AMOUNT OF RS.1,19,50,000/- BY FOLLOWING PERCENTAGE COMPLETION METHOD IN RESPECT OF PENDING ADVANCES OF THE CREDITORS LOOKIN G TO THE FACT THAT THE DEALS IN RESPECT OF PENDING ADVANCES ARE IN AN ADVANCE STAGE OF COMPLETION. THE ASSESSING OFFICER IN PURSUANCE OF THE OFFER ADDED T HIS AMOUNT ALSO TO THE TOTAL INCOME OF THE ASSESSEE. NO PENALTY PROCEEDINGS UND ER SECTION 271(1)(C) OF THE ACT WERE INITIATED IN RESPECT OF VARIOUS ADDITIONS MADE TO THE ADMITTED INCOME. 3. THE COMMISSIONER CONSIDERED THE ASSESSMENT ORDER TO BE ERRONEOUS AND PREJUDICIAL TO THE INTERESTS OF THE REVENUE. ACCOR DINGLY, HE ISSUED SHOW-CAUSE NOTICE UNDER SECTION 263 OF THE ACT DATED 07.03.201 4 TO THE ASSESSEE. THE RELEVANT EXTRACT OF THE SHOW-CAUSE NOTICE ISSUED BY THE COMMISSIONER UNDER SECTION 263 IS REPRODUCED HEREUNDER :- SUB : NOTICE U/S.263 OF THE I.T. ACT, 1961 FOR A Y 2009-10 REG. ON EXAMINATION OF YOUR ASSESSMENT RECORDS FOR THE A BOVE ASSESSMENT YEAR, IT IS SEEN THAT THE ORDER U/S 143(3) OF THE INCOME-TAX ACT, 1961 PASSED ON 26.12.2011, APPEARS TO BE ERRONEOUS IN SO FAR AS IT IS PREJUDIC IAL TO THE INTEREST OF REVENUE WITHIN THE MEANING OF SECTION 263 OF THE INCOME TAX ACT, 1 961 FOR THE FOLLOWING REASONS:- 2. IT IS OBSERVED THAT THE AO WHILE MAKING THE AFOR ESAID ASSESSMENT HAS MADE ADDITIONS OF RS.25,72,000/-, RS.75,50,000/- AND RS. 1,19,50,000/- AS PER DISCUSSION MADE IN PARA 4.2, 4.3 & 4.7 RESPECTIVELY TO THE RET URNED INCOME OF RS.95,55,430/-. ALL THE ABOVE ADDITIONS HAVE BEEN MADE AS PER THE A SSESSMENT ORDER ON THE BASIS OF THE DETAILS APPEARING IN RESPECT OF CREDITORS IN TH E BALANCE SHEET. FROM THE PERUSAL OF THE BALANCE SHEET APPEARING ON THE RECORD HAVING A TOTAL OF RS. 169981840.47 ON BOTH THE ASSET AND THE LIABILITY SIDE, IT CAN BE SE EN FROM THE DETAILS OF THE LIABILITY 3 ITA NO.943/PN/2014 SIDE THAT THE FIGURES HAVE BEEN GIVEN UNDER THE GRO UPINGS 'CAPITAL ACCOUNT', 'SECURED LOANS', 'UNSECURED LOANS', 'CURRENT LIABIL ITIES' AND 'CAPITAL ACCOUNT WITH'. HE HAS DISCUSSED THE SET OF CREDITORS SUBMIT TED BEFORE HIM IN A DIFFERENT GROUPING IN THE ASSESSMENT ORDER AT PARA 4.1.1. THE TOTAL OF THESE GROUPINGS COMES AT RS.10,08,23,000/-. IT IS NOT UNDERSTOOD HOW THIS NEW GROUPING HAS BEEN ARRIVED AT. WHICH OF THE ITEMS OF THE ORIGINAL BALANCE SHEE T IS INCLUDED UNDER WHICH GROUPING. THE AO HAS THEREAFTER PROCEEDED TO DISCUS S THESE NEW GROUPING TO ARRIVE AT DIFFERENT ADDITIONS DESCRIBED ABOVE. IN VIEW OF THE AFORESAID APPEARING IN THE RECORDS, IT IS CLEAR THAT THE AO HAS NOT COMPLETED THE ASSESSMENT AFTER PROPER VERIFICATION AND RECONCILIATION. HE HAS NOT CARRIED OUT THE NECESSARY VERIFICATIONS AND SCRUTINY AS WAS DEMANDED BY THE MATERIALS AVAIL ABLE IN RECORD BEFORE HIM IN THIS CASE. 3. IN ADDITION TO THE ABOVE, THE ASSET SIDE OF THE BALANCE SHEET ALSO REVEAL THAT THERE ARE FIGURES LIKE ADVANCE FOR LAND OF RS. 11,6 6,78,524/-. CLOSING WIP ETC., WHICH HAVE NOT BEEN EXAMINED BY THE AO PROPERLY. 4. IN ADDITION TO THE ABOVE IT IS FURTHER NOTED TH AT THE BREAK-UP OF ADVANCES AGAINST LAND RECEIVED APPEARING ON THE LIABILITY SI DE OF RS. 6,21,22,000/- HAS BEEN GIVEN COMPRISING OF 45 PERSONS. CONFIRMATIONS OF AP PROX 10 PERSONS HAVE BEEN GIVEN BEFORE THE AO AS PER THE RECORDS AVAILABLE. E VEN THESE CONFIRMATIONS AS CAN BEEN SEEN FROM THE REASONS GIVEN BELOW ARE NOT TALL YING WITH THE CLOSING BALANCE SHOWN IN THE BREAK UP. THESE ARE AS UNDER : 1. P K PATEL - CONFIRMATION IS GIVEN OF RS. 12,50,0 00/-, WHERE AS LIABILITY IN BALANCE SHEET IS SHOWN AT RS. 50,00,000/-. 2 . DINESH PATEL - CONFIRMATION FOR PURCHASE OF LAN D, BUT NEITHER APPEARING IN DEBTOR OR CREDITOR LIST. 3. NARESH PATEL - CONFIRMATION GIVEN OF 12.50 LACS BUT IN THE LIST IT IS ONLY 10 LACS. 4. SUNIL PATEL - CONFIRMATION GIVEN FOR PURCHASE OF LAND OF RS. 12.50 LACS, NEITHER APPEARING IN DEBTOR LIST NOR IN CREDI TORS LIST. 5. SHANTARAM KADAM - CONFIRMATION IS GIVEN FOR LOAN GIVEN TO M/S N. B. BHONDAVE OF RS. 43,57,000/- AND IT IS ALSO STATED T HAT HE IS ALSO GETTING BACK THE AMOUNT IN EMIS. THE SAME IS SHOWN AS LIABILITY IN THE BALANCE SHEET AND NOT UNDER THE HEAD UNSECURED LOANS. THE FIGURES ALSO DIFFER. 6. RAJENDRA BHONDVE - CONFIRMATION GIVEN FOR 20 LAC S FOR PURCHASE OF LAND, BUT IT APPEARING AS CURRENT LIABILITY AND NOT AS ADVANCE AGAINST LAND. 7. BABUSHA KALBHOR - - CONFIRMATION GIVEN FOR 35.25 LACS FOR PURCHASE OF LAND, BUT IT APPEARING AS CURRENT LIABILITY AND NOT AS ADVANCE AGAINST LAND. 8. LACCHARAM CHOUDHARY - CONFIRMATION GIVEN FOR RS. 7,00,000/- AGAINST PURCHASE OF LAND, BUT THE AMOUNT APPEARING IN THE BALANCE SHEET IN THE LIST IS RS. 4,00,000/-. 4 ITA NO.943/PN/2014 9. SUKHRAM CHOWDHARY - CONFIRMATION GIVEN FOR RS. 3 ,50,000/- BUT IT IS NOT APPEARING IN DEBTOR OR CREDITOR LIST. 10. NILESH PATEL - CONFIRMATION GIVEN FOR PURCHASE OF LAND RS. 5,00,000/-, BUT IT IS NOT APPEARING IN DEBTOR OR CR EDITOR LIST. 5. IN ADDITION TO THE ABOVE, THE AO HAS ALSO FAILE D TO INITIATE PENALTY PROCEEDINGS FOR VARIOUS ADDITIONS MADE IN THE ASSES SMENT ORDER WHICH WERE CLEARLY OF THE NATURE OF FILING OF INACCURATE PARTICULARS O F INCOME. 6. CONSIDERING THE ABOVE, IT IS CLEAR THAT ABOVE FA CTS WERE NOT VERIFIED BY THE ASSESSING OFFICER PROPERLY. HE HAS COMPLETED THE AS SESSMENT IN HASTE WITHOUT PROPERLY ANALYZING THE MATERIALS AVAILABLE ON RECOR DS CORRECTLY AND PROPERLY. HE HAS ALSO ERRED IN NOT INITIATING THE PENALTY PROCEE DING U/S. 271(1)(C) OF THE INCOME TAX ACT. FOR ALL THE AFORESAID REASONS IT APPEARS T HAT THE ASSESSMENT COMPLETED BY THE AO FOR A.Y. 2009-2010 WAS ERRONEOUS IN SO FAR A S IT IS PREJUDICIAL TO THE INTEREST OF REVENUE. 4. AFTER CONSIDERING THE REPLY OF THE ASSESSEE, THE COMMISSIONER WAS OF THE VIEW THAT THE IMPUGNED ASSESSMENT ORDER UNDER S ECTION 143(3) DATED 26.12.2011 IS ERRONEOUS IN SO FAR AS IT IS PREJUDIC IAL TO THE INTERESTS OF THE REVENUE MAINLY ON TWO GROUNDS (I) ASSESSMENT WAS CO MPLETED IN HASTE AND (II) NO PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) WERE INITIATED ON ADDITIONS MADE. HE ACCORDINGLY SET-ASIDE THE WHOLE ASSESSMEN T AND DIRECTED THE ASSESSING OFFICER TO RE-DO THE SAME IN TERMS OF HIS ORDER UNDER SECTION 263 OF THE ACT. 5. AGGRIEVED BY THE ORDER OF THE COMMISSIONER, THE ASSESSEE IS IN APPEAL BEFORE THE TRIBUNAL BY RAISING THE FOLLOWING GROUND S OF APPEAL :- 1. THE LEARNED CIT -V, PUNE HAS ERRED IN LAW AND O N FACTS IN ASSUMING JURISDICTION U/S 263 OF THE ITA, 1961 ON THE ANALOG Y THAT THE 143(3) ORDER DATED 26/12/2011 WAS ERRONEOUS AND PREJUDICIAL TO THE INT EREST OF REVENUE. 2. THE LEARNED CIT-V, PUNE ERRED IN LAW IN SETTING ASIDE THE ASSESSMENT ORDER U/S 143(3) ASSUMING THE SAME AS INCOMPLETE AND ERRO NEOUS AS IT WAS COMPLETED IN HASTE AND WITHOUT EXAMINING AND DEALING WITH THE RE LEVANT DETAILS APPARENT FROM RECORD. THE LEARNED CIT - V, PUNE ERRED IN LAW AND ON FACTS IN DIRECTING LEARNED AO TO RE-DO THE ASSESSMENT IN THE LIGHT OF DISCUSSIONS MENTIONED IN THE ORDER U/S 263 OF THE ITA, 1961. 3. THE LEARNED CIT -V, PUNE ERRED IN LAW AND ON FAC TS IN DIRECTING THE LEARNED AO TO INITIATE PENALTY PROCEEDINGS U/S 271(1)(C) OF THE ITA, 1961 FOR FURNISHING INACCURATE PARTICULARS OF INCOME. 5 ITA NO.943/PN/2014 4. THE LEARNED CIT-V, PUNE ERRED IN LAW AND ON FACT S IN NOT APPRECIATING THE FACT THAT, APPELLANT HAS OFFERED VARIOUS ADDITIONS TO RETURNED INCOME VOLUNTARILY AND IN GOOD FAITH MERELY TO BUY PIECE OF MIND AND AVOID LITIGATIONS. 5. THE APPELLANT CRAVES LEAVE TO ADD / MODIFY / ALT ER / DELETE ALL / ANY OF THE GROUNDS OF APPEAL. 6. THE LD. AUTHORIZED REPRESENTATIVE (AR) FOR THE A SSESSEE SHRI KISHOR PHADKE AT THE OUTSET SUBMITTED THAT THE ASSESSMENT ORDER HAS ALREADY BEEN RE- FRAMED IN TERMS OF THE DIRECTIONS UNDER SECTION 263 VIDE ORDER DATED 19.03.2015. HOWEVER, THE ASSESSMENT HAS BEEN FRAME D BROADLY ON THE SIMILAR LINES AS THAT OF EARLIER ORDER EXCEPT FOR ANOTHER S MALL ADDITION OF RS.3,12,000/- TO THE EARLIER ASSESSED INCOME. HE ACCORDINGLY SUB MITTED HE IS NOT SERIOUSLY PREJUDICED BY THE RE-FRAMING OF ASSESSMENT ON MERIT S AND HENCE HE DOES NOT SEEK TO CONTEST THE GROUND OF COMMISSIONER THAT THE ASSESSMENT ORDER WAS PASSED IN HASTE. HE CONTENDED THAT HIS MAIN GRIEVA NCE IN THE PRESENT APPEAL IS TOWARDS INVOKING REVISIONARY POWERS VESTED UNDER SE CTION 263 FOR FAILURE TO INITIATE PENALTY PROCEEDINGS BY THE ASSESSING OFFIC ER IN THE COURSE OF ASSESSMENT PROCEEDINGS. THE LD. AR RELIED UPON THE LATEST DECISION OF THE HONBLE PUNJAB & HARYANA HIGH COURT IN THE CASE OF CIT VS. RAKESH NAIN TRIVEDI, 282 CTR 205 (P&H) FOR THE PROPOSITION THAT NON-INITIATION OF PENALTY PROCEEDINGS BY THE ASSESSING OFFICER IN THE COURSE OF ASSESSMENT PROCEEDINGS WOULD NOT RENDER THE ORDER ERRONEOUS AND PREJUDICIA L TO THE INTERESTS OF THE REVENUE AND THEREFORE SUCH ORDER CANNOT BE SUBJECT- MATTER OF REVISION UNDER SECTION 263 OF THE ACT ON THIS GROUND. HE, THEREAF TER, REFERRED TO THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF CIT VS. ASSOCIATED CONTRACTORS CORPORATION, 275 ITR 123 (ALL.) EXPRESS ING OPPOSITE VIEWS AS RELIED UPON BY THE COMMISSIONER IN ITS ORDER AND CO NTENDED THAT THERE ARE SEVERAL DECISIONS ON THE ISSUE BY DIFFERENT HIGH CO URTS WHICH ARE IN FAVOUR OF THE ASSESSEE. HE SUBMITTED THAT WHILE THE HONBLE ALLAHABAD HIGH COURT HAS TAKEN A ADVERSE VIEW, THE DECISION IN FAVOUR OF THE ASSESSEE IS RENDERED IN RAKESH NAIN TRIVEDIS CASE (SUPRA) WHERE LARGE NUMB ER OF CASES OF DIFFERENT HIGH COURTS FOR AND AGAINST, HAS BEEN TAKEN INTO AC COUNT. THE LD. AR, 6 ITA NO.943/PN/2014 DRAWING ANALOGY FROM THE DECISION OF THE HONBLE BO MBAY HIGH COURT IN THE CASE OF CIT VS. GABRIEL INDIA LTD., 203 ITR 108 (BO M.), SOUGHT TO CONTEND THAT THE CONCLUSION OF THE ASSESSING OFFICER IN NOT INIT IATING THE PENALTY PROCEEDINGS IN THE FACTS OF THE CASE CANNOT BE TERM ED AS ERRONEOUS SIMPLY BECAUSE THE COMMISSIONER DOES NOT AGREE WITH HIS CO NCLUSION. THE ADDITIONS WERE MADE WITH REFERENCE TO OFFER MADE BY THE ASS ESSEE IN THIS REGARD ONLY. IN THE LIGHT OF VARIOUS JUDICIAL PRECEDENTS ON THE ISSUE, THE LD. AR CONTENDED THAT DIRECTION OF THE COMMISSIONER FOR CONSIDERATIO N OF INITIATION OF THE PENALTY PROCEEDINGS IS BEYOND THE SCOPE OF SECTION 263(1) O F THE ACT AND THEREFORE DESERVES TO BE SET-ASIDE. 7. THE LD. DEPARTMENTAL REPRESENTATIVE (DR) FOR THE REVENUE SHRI A. S. SINGH, ON THE OTHER HAND, RELIED UPON THE DECISION OF THE HONBLE ALLAHABAD HIGH COURT IN THE CASE OF ASSOCIATED CONTRACTORS CO RPORATION (SUPRA) AS REFERRED TO BY THE COMMISSIONER AND SUBMITTED THAT THE IMPUGNED DIRECTION OF THE COMMISSIONER TO CONSIDER THE INITIATION OF PENA LTY PROCEEDINGS WHILE SETTING-ASIDE THE ASSESSMENT ORDER IS WITHIN THE BO UNDS OF LAW AND THEREFORE CANNOT BE ASSAILED. 8. WE HAVE CAREFULLY HEARD THE RIVAL SUBMISSIONS AN D PERUSED THE RECORD. IN EXERCISE OF POWER CONFERRED UNDER SECTION 263 OF THE ACT, THE COMMISSIONER HAS SET-ASIDE THE ASSESSMENT FOR FRAMING IT AFRESH INTER-ALIA ON THE GROUND THAT THE ASSESSING OFFICER HAS FAILED TO INITIATE PENALT Y PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT ON THE ADDITION OF RS.2,20,72, 000/- TO THE TOTAL INCOME. THE OTHER GROUND FOR INVOKING POWER UNDER SECTION 2 63 NAMELY ASSESSMENT DONE IN HASTE HAS NOT BEEN SERIOUSLY CHALLENGED ON BEHALF OF THE ASSESSEE. ACCORDINGLY, THE LIMITED QUESTION TO BE DECIDED IN THE PRESENT CASE IS WHETHER THE COMMISSIONER IS EMPOWERED UNDER SECTION 263 TO SET-ASIDE THE ASSESSMENT WHERE THE ASSESSING OFFICER HAS FAILED TO INITIATE PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT IN THE ASSESSMENT PROC EEDINGS ? WE FIND THAT THIS QUESTION HAS BEEN DELIBERATED UPON IN LARGE NUMBER OF JUDICIAL PRECEDENTS AND 7 ITA NO.943/PN/2014 IS NO LONGER RES INTEGRA . IN THE CASE ADDL. CIT V. J.K. D'COSTA [1982] 133 ITR 7 (DELHI) FOLLOWED IN ACIT V. ACHAL KUMAR JAIN (142 ITR 606) AND CIT V. NIHAL CHAND REKYAN [2000] 242 ITR 45 (DELHI) AND IN ADDL.CIT V. SUDARSHAN TALKIES (1993) 200 ITR 153 (DELHI); ALSO BY HON'BLE MADRAS HIGH COURT IN CIT V. C.K.K.SWAMI (254 ITR 158); SARDA PRASAD S INGH V. CIT (173 ITR 510 (GAUHATI), IT HAS BEEN HELD THAT IF THE COMMISS IONER FINDS, WHILE EXAMINING THE RECORDS OF AN ASSESSMENT ORDER UNDER SECTION 263, THAT THE ASSESSING OFFICER HAS NOT INITIATED PENALTY PROCEED INGS, HE CANNOT DIRECT INITIATION OF PENALTY PROCEEDINGS BECAUSE PENALTY P ROCEEDINGS ARE NOT A PART OF ASSESSMENT PROCEEDINGS. THE COMMISSIONER CANNOT PAS S AN ORDER UNDER SECTION 263 PERTAINING TO PENALTY. HON'BLE SUPREME COURT HA S DISMISSED SPECIAL LEAVE PETITION AGAINST THE DELHI HIGH COURT DECISION IN A DDL.CIT V. J.K.D'COSTA [REPORTED IN (1984) 147 ITR (ST) 1)]. I N THE CASE OF CIT V. DR. SURESH G.SHAH (289) ITR 110 (GIJ) FOLLOWING ITS EAR LIER JUDGEMENT IN THE CASE OF CIT V. PARMANAND M.PATEL (2005) 198 CTR (GUJ) 64 1/278 ITR 3 (GUJ), HON'BLE GUJARAT HIGH COURT HAS HELD THAT WHILE EXER CISING POWERS UNDER SECTION 263, CIT IS NOT COMPETENT TO DIRECT I NITIATION OF PENALTY PROCEEDINGS UNDER S.271(1)(A) OR S.273(2)(C) OF THE ACT. IN THE CASE OF CIT V. PARMANAD M.PATEL (SUPRA), HON'BLE JURISDICTIONAL HI GH COURT HAS HELD THAT THE CIT IS NOT EMPOWERED TO RECORD SATISFACTION BY INVO KING S.271(1)(C) OF THE ACT AND IF HE IS NOT ENTITLED TO DO SO, ON HIS OWN, HE CANNOT DO IT BY DIRECTING THE ASSESSING AUTHORITY. THE COURT OBSERVED THAT IN OTH ER WORDS, WHAT THE CIT HIMSELF CANNOT DO, HE CANNOT GET IT DONE THOUGH THE ASSESSING AUTHORITY BY EXERCISING REVISIONAL POWERS. 9. IN VIEW OF LARGE NUMBER OF CASES DECIDED IN FAVO UR OF THE ASSESSEE AS NOTED ABOVE, WE ARE INCLINED TO RESPECTFULLY FOLLOW THE RATIO OF THESE DECISIONS IN PREFERENCE TO THE OBSERVATIONS MADE BY THE HONB LE ALLAHABAD HIGH COURT IN THE CASE OF ASSOCIATED CONTRACTORS CORPORATION ( SUPRA). IN VIEW OF THE ABOVE, THE DIRECTION OF THE COMMISSIONER TO INITIAT E PENALTY PROCEEDINGS UNDER SECTION 271(1)(C) OF THE ACT WHILE SETTING-ASIDE TH E ASSESSMENT REQUIRES TO BE 8 ITA NO.943/PN/2014 CANCELLED. WE DO SO ACCORDINGLY. HOWEVER, WE DECL INE TO INTERFERE WITH THE OBSERVATIONS OF THE COMMISSIONER HOLDING THE ASSESS MENT ORDER TO BE ERRONEOUS IN SO FAR AS PREJUDICIAL TO THE INTERESTS OF THE REVENUE ON THE GROUND THAT IT WAS COMPLETED IN HASTE AND WITHOUT EXAMININ G AND DEALING WITH THE RELEVANT DETAILS ETC.. 10. IN THE RESULT, THE APPEAL OF THE ASSESSEE IS PA RTLY ALLOWED. ORDER PRONOUNCED ON THIS 17 TH DAY OF AUGUST, 2016. SD/- SD/- ( VIKAS AWASTHY ) ( PRADIP KUMAR KEDIA ) / JUDICIAL MEMBER $ / ACCOUNTANT MEMBER PUNE ; DATED : 17 TH AUGUST, 2016. & ' () *+( / COPY OF THE ORDER IS FORWARDED TO : 1) THE ASSESSEE; 2) THE DEPARTMENT; 3) THE CIT-V, PUNE; 4) THE DR B BENCH, I.T.A.T., PUNE; 5) GUARD FILE. &, / BY ORDER , ' # //TRUE COPY// $ %& # '( / SR. PRIVATE SECRETARY ) '* , / ITAT, PUNE