PCIT Vs Harish Jain (Rajasthan High Court)
Rajasthan High Court has dismissed appeals filed by the Principal Commissioner of Income Tax (PCIT) against an order of the Income Tax Appellate Tribunal (ITAT), Jaipur. The High Court affirmed the Tribunal’s decision to quash a revisional order that had directed the Assessing Officer (AO) to initiate penalty proceedings under of the Income Tax Act, 1961, against the assessee, Harish Jain. The core of the judgment revolves around the necessity for the AO to record specific satisfaction for the relevant penalty provision during assessment proceedings.
The case originated from a search conducted on September 7, 2017, at the premises of Resonance Group, Kota, which led to a notice under Section 153A of the Act being issued to Harish Jain for Assessment Year (AY) 2012-13. The assessee filed a return declaring an income of ₹15,67,000, which was subsequently assessed at ₹70,67,000 by an order dated December 22, 2019. In this assessment order, the AO recorded satisfaction for initiating penalty proceedings under Section 271AAB of the Act.
The Revisional Authority, exercising powers under Section 263 of the Act, subsequently issued an order on March 25, 2022, directing the AO to initiate and levy penalty under Section 271(1)(c) of the Act, after independently arriving at due satisfaction. The assessee appealed this revisional order to the ITAT, which set it aside. The PCIT then appealed to the High Court, raising substantial questions of law concerning the quashing of the Section 263 order by the ITAT.
