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Section 263, read with section 273(b) of the Income-tax Act, 1961 - Revision - Of orders prejudicial to interest of revenue - Assessment years 1967-68 to 1969-70 - ITO while passing assessment order did not initiate penalty proceedings under section 273(b) - Whether proceedings for levy of penalty under section 273(b) are separate from assessment proceedings and Commissioner had no jurisdiction under section 263 to direct ITO to initiate proceedings under section 273(b) - Held, yes FACTS The assessee had not complied with the provisions requiring the payment of advance tax at the time when assessment orders were passed. The ITO while passing the assessment orders did not charge any interest under section 217. There was also no mention made in the assessment orders or in any separate order passed regarding initiation of penalty proceedings under section 273. The Commissioner while exercising powers under section 263, set aside the assessment orders inter alia on the ground that the ITO did not initiate proceedings under section 273(b) for the default in not complying with the provisions of section 212(3). The Tribunal held that there was no justification for the Commissioner to exercise his jurisdiction under section 263 and to direct the ITO to initiate proceedings for imposition of penalty under section 273(b). On reference : HELD In view of the decision of Delhi High Court in Addl. CIT v. J.K. D'Costa [1982] 133 ITR 7, the Tribunal was right in setting aside the order of the Commissioner passed under section 263 in so far as it directed the ITO to initiate penalty proceedings under section 273(b). Note : The case was decided in favour of the assessee. CASES REFERRED TO Addl. CIT v. Indian Pharmaceuticals [1980] 123 ITR 874 (MP), Addl. CIT v. Kantilal Jain [1980] 125 ITR 373 (MP), Addl. CWT v.Nathoolal Balaram [1980] 125 ITR 596 (MP) and Addl. CIT v. J.K. D'Costa [1982] 133 ITR 7 (Delhi). B. Gupta, Rajendra, D.N. Malhotra, D.C. Taneja, R.C. Pandey, R.N. Verma and R.K. Chaufla, for the Applicant. Bishamber Lal and Ms. Geetanjali Mohan for the Respondent. JUDGMENT B.N. Kirpal J.-The statement of the case has been drawn up and a reference has been made to this…

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