Section 263 Proceedings Not Justified for Failure to Initiate Penalty Proceedings

CIT (Central) Vs Rakesh Nain Trivedi (Punjab and Haryana High Court)

Punjab and Haryana High Court has dismissed an appeal by the Commissioner of Income Tax (Central) against Rakesh Nain Trivedi, affirming that the Commissioner cannot use revisional powers under Section 263 of the Income Tax Act, 1961, to direct an Assessing Officer (AO) to initiate penalty proceedings. The court’s decision, delivered on March 26, 2014, upholds the Income Tax Appellate Tribunal’s (ITAT) ruling, which had cancelled the CIT’s revisional order.

The case origin

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