THE INCOME TAX APPELLATE TRIBUNAL AHMEDABAD “C” BENCH Before Dr. BRR Kumar, Vice President And Ms. Suchitra Kamble, Judicial Member ITA No. 1590/Ahd/2025 Assessment Year 2022-23 Piyush Garg, The DCIT, Flat No. C-302, CC-1(2)

Mapple Parmeshwar, Vs Ahmedabad-1 Opp. Earth School, (Respondent)

New Chandkheda, Ahmedabad PAN: AXQPG1191B (Appellant)

Assessee by: Shri Anurag Sinha, A.R.

Revenue by: Shri Uday Kishanrao Kakne, Sr. D.R.

Date of hearing : 06-10-2025 Date of pronouncement : 09-12-2025 आदेश/ORDER Per Suchitra Kamble, Judicial Member:

This is an appeal filed against the order dated 30-06-

2025 passed by CIT(A)-11, Ahmedabad for assessment year

2022-23.

2. The grounds of appeal are as under:-

“1. BECAUSE, the impugned order passed by the "AO' is liable to held void-ab- initio having been passed without any statutory Notice to the appellant thereby rendering the entire proceedings null in law.

2. BECAUSE, the Ld. CIT(A) has erred in law and on facts in treating the wrongful initiation of penalty as a mere clerical error, overlooking the settled principle that initiation of penalty is not a ministerial OR mechanical act but a quasi-judicial function requiring the conscious satisfaction of the Assessing Officer, which cannot be delegated, substituted, OR retrospectively altered.

3. BECAUSE, the Ld. CIT(A) without appreciating that the "satisfaction" required for initiation of penalty proceedings necessarily presupposes due application of mind to the facts and circumstances of the case, and such "satisfaction", once recorded, cannot subsequently be modified, improved, OR rectified.

4. BECAUSE, the Ld CIT(A) after having categorically held that the applicability of section 271AAC(1) in the facts of the present case is a debatable issue and therefore outside the scope of section 154 proceedings, the Ld. CIT(A) ought to have, on the same reasoning, upon such an admitted position annulled the rectification order passed under section 154 by the AO as the AO too has transgressed his jurisdiction in passing order under section 154 of the Act.

5. BECAUSE, while upholding the validity of the rectification order invoking section 271AAC(1), the Ld. CIT(A) has erred in holding that no prejudice was caused to the appellant, ignoring the material fact that such rectification was undertaken soon after the appellant had successfully demonstrated before the AO that penalty under section 271AAB, as originally initiated, cannot be levied upon the appellant.

6. BECAUSE, the Ld. CIT(A) while upholding the validity of impugned rectification order ignored the material fact that provisions of Section 271AAC(1) of the 'Act' cannot be pressed into service, as the said section may apply only when the income is determined by the AO under sections 68/69/69A, etc., and is not included in the return. In the instant case, the disclosed amount was fully included in the return and assessed accordingly.

7. The ‘appellant’ craves leave to add, alter OR vary the grounds of appeal before OR at the time of hearing.”

3. The original return of income was filed on 31-07-2022 declaring total income of Rs. 77,80,409/-. The same was processed u/s. 143(1) of the Act on 15-11-2016. The case of the assessee for assessment year 2022-23 was selected for scrutiny on the basis of requisition action u/s. 132A of the Act as carried out by the Department in the case of the assessee on 27-07- 2021. Subsequently, assessment order u/s. 143(3) of the Act was finalized on 08-02-2024 determining total income of Rs. 77,80,409/-. The Assessing Officer observed that the assessee offered Rs. 62,00,000/- pertaining to cash seized during the course of requisition action as carried in the case of the assessee on 27-07-2021 in his return of income for the year under consideration under the provisions of special slab rate u/s. 115BBE of the Act. The said income was reflected. Consequently, while passing assessment order u/s. 143(3) of the Act in the case of the assessee for the year under consideration, the penalt