IN INCOME TAX APPELLATE TRIBUNAL AHMEDABAD C BENCH AHMEDABAD BEFORE, SHRI S. S. GODARA, JUDICIAL MEMBER AND SHRI MANISH BORAD, ACCOUNTANT MEMBER. ITA. No. 913/Ahd/2016 (Assessment Year:2008-09) Ramanbahi Gordhanbhai Patel 1964, Thaltej Gam, Fulwad, Thaltej, Ahmedabad 380 059 Appellant Vs. Assistant Commissioner of Income-tax, Circle 3(2), Ahmedabad Respondent PAN: ASUPP2614B By Assessee : Shri B. R. Popat, A.R. By Revenue : Mrs. Vibha Bhalla, CIT D.R. Date of Hearing : 19.09.2016 Date of Pronouncement : 14.10.2016 ORDER PER S. S. GODARA, JUDICIAL MEMBER This assessee s appeal for assessment year 2008-09 arises against CIT-3, Ahmedabad s order dated 22.03.2016, in proceedings u/s.263 of Income Tax Act. We have heard both parties. Case file perused. ITA No.913/Ahd/2016 (Ramanbhai G. Patel vs. ACIT) A.Y. 2008-09 -2- 2. assessee pleads following substantive grounds in instant appeal: 1. Invoking jurisdiction and consequently passing order under section 263 of Act; 2. By holding that non-initiation of penalties under section 271(1)(c) and 271F in body of assessment order renders same erroneous and prejudicial to interest of Revenue, so as to assume jurisdiction under section 263 of Act. While holding this, he disbelieved fact (for untenable reasons as specified in order) that penalty under section 271(1)(c) was very much initiated in body of order itself and consequential notice under section 274 was very much served upon Appellant along with same; 3. Without prejudice, holding that order which is available in record of AO is to be treated as correct assessment order and same is to be taken cognizance of. PCIT ought to have appreciated that when order served upon Appellant was admittedly different one and when AO has admittedly accepted this fact, it has to be order that is passed and served upon Appellant which is to be considered as valid and not one which was found in departmental record. 3. We come to relevant facts now. whole issue appears to have arisen from assessee/appellant s land development agreement dated 15.05.2007 by registered deed no. 2075 with Shree Surgovind Realtors Ltd. regarding his land at Survey no. 541, Village Thaltej, Dist. Ahmedabad. He received payment of Rs.40,94,676/-. assessee does not appear to have filed any return. Assessing Officer issued Section 148 notice. assessee filed return on 24.01.2013 declaring total income of Rs.22,88,620/-. Assessing Officer thereafter framed re-assessment on 28.01.2014 accepting assessee s return. 4. This case file indicates that sole bone of contention between parties is about correctness of above re-assessment order dated 28.01.2014. order forming part of case record reads that Assessing Officer/DCIT, Circle-6, Ahmedabad, had initiated Section 271(1)(c) penalty proceedings alleging concealment of income. Ld. counsel ITA No.913/Ahd/2016 (Ramanbhai G. Patel vs. ACIT) A.Y. 2008-09 -3- also produces original of this order before us in course of hearing. CIT however appears to have issued Section 263 notice dated 22.01.2016 stating therein that Assessing Officer had not initiated Section 271(1)(c) explanation 3 and Section 271F penalty proceedings against assessee. This tax payer appeared before CIT. He inter alia pleaded that Assessing Officer had duly initiated Section 271(1)(c) penalty proceedings. His further case was that Section 263 revisional proceedings could not be invoked for reason that Assessing Officer has not brought into action penal provisions under Act as per case law CIT vs. Parmanand Patel (2005) 278 ITR 3 (Guj.) and CIT vs. Manilal Tarachand (2002) 254 ITR 630 (Guj.). CIT observes in his order under challenge that their lordships subsequent judgment in CIT vs. J P Construction Tax Appeal No. 2581/2009 decided on 22.10.2013 distinguishes former two precedents by taking note of amendment in Section 271(1)(c) of Act. He thereafter comes to Assessing Officer s order and holds that officer concerned had filed clarification dated 21.03.2016 confirming that assessment order not initiating penalty proceedings available in assessment record is correct order. CIT then takes into cognizance assessee s non filing of reply in response to Section 271(1)(c) notice to conclude that Assessing Officer had indeed omitted to initiate impugned penal action. He thus directs Assessing Officer to make fresh assessment. This leaves assessee aggrieved. 5. We have heard rival submissions. dispute admittedly between parties is as to whether Assessing Officer in his order dated 28.01.2014 had in fact instituted penal action or not against assessee. It has come on record that assessment order forming part of case file contains penalty initiation stipulation. There is no such order filed at Revenue s behest in course of arguments before us. assessee s assessment order filed along with appeal contains signatures of Assessing Officer. same ITA No.913/Ahd/2016 (Ramanbhai G. Patel vs. ACIT) A.Y. 2008-09 -4- goes against assessing authority s clarification dated 09.03.2016 submitted before CIT(A). We afforded sufficient to Revenue to place on record said clarification along with assessment order not initiating penalty proceedings. same has not been filed. All this makes us to conclude that assessment order in instant appeal filed is correct assessment order. CIT is therefore held to have erred in exercising Section 263 jurisdiction for reason that Assessing Officer had not initiated impugned penalty proceedings. This exercise of revisional jurisdiction is accordingly declared to be not sustainable since based on wrong assumption of relevant facts forming very backbone of Section 263. We accept assessee s arguments on facts accordingly. 6. This assessee s appeal is allowed. [Pronounced in open Court on this 14th day of October, 2016. Sd/- Sd/- (MANISH BORAD) (S. S. GODARA) ACCOUNTANT MEMBER JUDICIAL MEMBER Ahmedabad: Dated 14/10/2016 True Copy S.K.SINHA Copy of Order Forwarded to:- 1. Revenue 2. Assessee 3. Concerned CIT 4. CIT (A) 5. DR, ITAT, Ahmedabad 6. Guard file. By order Ramanbahi Gordhanbhai Patel v. Assistant Commissioner of Income-tax, Circle – 3(2), Ahmedabad