Reasoned penalty orders are essential: enhanced penalty set aside and remanded for fresh consideration after procedural infirmity.

An enhanced penalty order was found unsustainable where it was passed without reasons, without proper consideration of the assessee's objections, and without due application of mind in the de novo proceedings. The authority had placed the assessee in a worse position than under the earlier adjudication without adequate justification, and the absence of a properly signed and reasoned order compounded the procedural defect. The enhanced penalty was therefore set aside, and the matter was remanded for fresh adjudication of penalty with an open mind and due regard to the relevant circumstances.

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Issues: Whether the enhanced penalty order could be sustained when it was passed without reasons, without proper consideration of the assessee's objections, and in disregard of the earlier adjudication.

Analysis: The appeal challenged only the enhancement of penalty in the de novo proceedings. The order was found to be unsustainable because no reasons were recorded for imposing or enhancing penalty, the assessee was placed in a worse position than under the earlier order without justification, and the authority had not shown due application of mind. The absence of a properly signed and reasoned order also reinforced the procedural infirmity. The matter therefore required fresh consideration with an open mind and with due regard to the relevant circumstances before penalty could be re-determined.

Conclusion: The enhanced penalty order was set aside and the matter was remanded for fresh adjudication on the question of penalty.

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