Penalty initiation without recorded reasons does not raise a substantial question of law, the HC held.

Penalty proceedings could not be sustained as the assessment order did not disclose any discernible basis for their initiation. Relying on binding precedent, the HC held that the absence of recorded reasons did not give rise to a substantial question of law. The appeal consequently failed.

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Issues: Whether the initiation of penalty proceedings was supported by discernible reasons so as to give rise to a substantial question of law.

Analysis: The assessment order did not disclose any basis for initiating penalty proceedings against the assessee. In the light of the binding precedent relied upon, such an initiation did not warrant interference on a substantial question of law.

Conclusion: No substantial question of law arose. The appeal failed.

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