ASSISTANT COMMISSIONER OF INCOME TAX Vs. THERMOTECH ENGINEERS

JUDGEMENT

(1.) Being aggrieved by an order dated 27.1.1999 made by the Income-tax Appellate Tribunal, Ahmedabad (hereinafter referred to as "the Tribunal") the Assistant Commissioner of Income-tax Circle 10(1), Ahmedabad has preferred this appeal under section 260A of the Income-tax Act (hereinafter referred to as the Act). It appears that the Assessing Officer assessed the assessee for A.Y. 1992-93, under section 143(3) of the Act and computed the income of the assessee. The said order is annexed with the appeal at Annexure "A".

(2.) It appears that the Commissioner of Income-tax (hereinafter referred to as "CIT") passed an order under section 263 of the Act. It appears that the CIT was of the view that the Assessing Officer has failed to initiate penalty proceedings under section 271(1)(c) of the Act. In para 12 of the order the CIT expressed the opinion that on the facts of the case the Assessing Officer should have initiated penalty proceedings under section 271(1)(c) of the Act which he failed to do and issued the direction to the Assessing Officer to reframe the assessment and initiate the penalty proceedings under section 271(1)(c) of the Act. It appears that the assessee being aggrieved by the order passed by the CIT under section 263 of the Act preferred an appeal before the Tribunal. The Tribunal after considering the decisions on the question set aside the order passed by the CIT. The Tribunal considered the decisions of the different High Courts as well as the decisions rendered by the Tribunal; some in favour of the assessee and some in favour of the Revenue. The Tribunal expressed an opinion that when two views are possible, the construction which favours the assessee should be taken as laid down by the Supreme Court. The Tribunal considered the cases reported at 60 ITR 392, 77 ITR 817 and 88 ITR 192.

(3.) Before us the learned advocate for the Revenue submitted that passing an order under section 271 of the Act is an order which can be said to be the part of the assessment order. He submitted that as the Assessing Officer failed in passing appropriate assessment order in accordance with law, the CIT was justified in exercising the powers under section 263 of the Act.