Anotra Realtors Pvt. Ltd. Vs PCIT (Central) (ITAT Chennai)
The Income Tax Appellate Tribunal, Chennai, considered the assessee’s appeal against the revision order passed by the Principal Commissioner of Income Tax (Central) under Section 263 of the Income Tax Act, 1961, in relation to Assessment Year 2016-17. The revision order held that the assessment framed under Section 153C on 28.03.2022 was erroneous and prejudicial to the interests of the Revenue because the Assessing Officer had initiated penalty proceedings under Section 271AAC instead of Section 271(1)(c).
The case arose from a search conducted under Section 132 on 25.02.2020, pursuant to which the Assessing Officer completed the assessment under Section 153C. During the assessment, the Assessing Officer treated cash amounting to Rs.5,18,49,128, which was allegedly not recorded in the books of account and for which no explanation regarding its source was provided, as unexplained money under Section 69A. While making this addition, the Assessing Officer initiated penalty proceedings under Section 271AAC at two places in the assessment order. The assessment became final as it was not challenged by the assessee.
Subsequently, the Principal Commissioner examined the assessment records and issued a show cause notice proposing revision under Section 263. According to the Principal Commissioner, penalty had been initiated under a non-existent provision applicable to the relevant assessment year, and the Assessing Officer ought to have initiated penalty proceedings under Section 271(1)(c). The Principal Commissioner held that initiation under the wrong provision amounted to non-initiation of penalty, rendering the assessment order erroneous and prejudicial to the interests of the Revenue. Accordingly, the Assessing Officer was directed to modify the assessment order and invoke Section 271(1)(c) in respect of the addition under Section 69A.
