Kanahiya Lal Agrawal Vs. Pr. CIT (Central)

Parties Involved

Facts Summary

The case involves an appeal by Kanahiya Lal Agrawal against the order of the Principal Commissioner of Income Tax (Central) for the assessment year 2021-22. The assessee challenges the order on two grounds: (i) the Principal Commissioner of Income Tax (Central) lacked the power to pass an order under section 263 of the Income Tax Act directing the Assessing Officer to initiate penalty proceedings under section 271AAD of the Act, as penalty proceedings are discretionary and not mandatory; and (ii) the taxability under section 115BBE of the Act was not applicable since the Assessing Officer did not specify whether it was within the deeming provisions of the Act from Section 69 to 69D of the Act. The assessee argues that the Assessing Officer failed to inquire into and verify the issue of taxability of unexplained expenditure of Rs.60,00,000/- under section 115BBE of the Act and the initiation of penalty under section 271AAD of the Act.…

Legal Issues

• 1. Whether the Principal Commissioner of Income Tax (Central) had the power to pass an order under section 263 of the Act directing the Assessing Officer to initiate penalty proceedings under section 271AAD of the Act.
• 2. Whether the taxability under section 115BBE of the Act was applicable to the unexplained expenditure of Rs.60,00,000/-.

Judgment Outcome

Decided in favour of Assessee.

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