CIT empowered to exercise power u/s 263 over orders passed u/s 271(D) and 271D

CIT empowered to exercise power u/s 263 over penalty orders passed u/s 271(D) and 271D by the Joint Commissioner of Income Tax.

In a recent judgment, Hon’ble Punjab and Haryana High Court has held that CIT is empowered to exercise jurisdiction u/s 263 over penalty orders passed u/s 271(D) and 271D by the Joint Commissioner of Income Tax.

ABCAUS Case Law Citation:
ABCAUS 4156 (2024) (07) HC

In the instant case, the assessee had filed an Income Tax Appeal challenging the order passed by the ITAT confirming the order passed by the Pr. Commissioner of Income Tax (Pr.CIT) whereby the order passed under Section 271(D) of the of the Income Tax Act, 1961 (the Act) by the JCT was reviewed and penalty orders passed by the JCIT were held to be erroneous and prejudicial to the interest of revenue and the order passed by the JCIT was cancelled.

It was submitted by the assessee that the powers contained in section 263 of the Act, excludes the jurisdiction of the Pr.CIT to review the orders passed by the JCIT under Section 271 (D) and 271(E). On the strength of explanation to Section 263; explanation-1, it was submitted that, the instant mention in explanation (A) would be only in the cases where the Pr.CIT would be empowered to review the orders of the CIT. However, in this case, the appellant was not falling under Section 140 of the Act.

The Hon’ble High Court observed that in view of the provisions as contained in section 263 of the Act, the explanation does not supersede or exclude the main provision of Section 263 (1), it only explains circumstances wherein orders passed in specific matters relating to various sections provided therein, can also be looked into. It is an inclusive clause and is not exclusive one.

Thus, the Hon’ble High Court opined that the word “any proceedings under this Act as provided under Section 263(1)” will apply to all the proceedings which may be passed under the Act, which would include orders passed under Section 271(D) as well as under Section 271(E) by the Joint Commissioner of Income Tax.

Accordingly, the Hon’ble High Court dismissed the appeal of the assessee. 

Download Judgment 4156 (2024) HC Click Here >>

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