Summary
- The ITAT Delhi has quashed the Principal Commissioner of Income Tax's (PCIT) revision order under Section 263, ruling that the failure to initiate penalty proceedings under Section 270A does not render the assessment erroneous.
- Azure Power Uranus Private Limited's assessment for AY 2020-21 was completed without penalty initiation, prompting the PCIT's objection, which the Tribunal found unwarranted.
- Citing precedents from the Punjab and Haryana High Court, the Tribunal emphasized that assessment and penalty proceedings are distinct and cannot be conflated.
- This ruling clarifies that a PCIT cannot invoke Section 263 solely based on non-initiation of penalty, potentially impacting future tax assessments and revisions.
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