Naeem Sirajuddin Tirmizi Vs PCIT (Central) (ITAT Ahmedabad)
AO Could Not Trigger the Penalty, Yet PCIT Faulted Him for Silence: Ahmedabad ITAT Quashes Revision u/s 263 in Seven Years
Summary: Seven Appeals, One Common Controversy
The assessee preferred seven appeals relating to AYs 2014-15 to 2019-20 & 2021-22 against separate revisionary orders passed by the PCIT u/s 263. Since the factual background & legal issue were identical, the Ahmedabad ITAT heard all the appeals together, treating the appeal for AY 2014-15 as the lead matter.
The controversy arose from a reassessment order dated 21.03.2024, passed u/s 147. The PCIT set aside this assessment on the ground that the AO had failed to record his satisfaction for initiating penalty proceedings u/s 271D for the alleged contravention of s.269SS.
Thus, the narrow question before the Tribunal was whether an assessment order could be regarded as erroneous & prejudicial to the interests of the Revenue merely because the AO had not recorded satisfaction or initiated penalty proceedings u/s 271D.
PCIT’s Case: Failure to Initiate Penalty Made Assessment Erroneous
According to the PCIT, material on record allegedly indicated that the assessee had accepted cash loans, deposits or specified sums in violation of s.269SS. The AO, however, neither recorded satisfaction nor initiated proceedings for imposition of penalty u/s 271D.
