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of <h1>Court allows appeal, remits case for penalty adjudication under Sections 271(1)(c) & 273(2)(a). Clarifies Section 271(1B).</h1> <h3>The Commissioner of Income Tax-I. Chandigarh Versus M/s Bansal Iron Scrap Co.</h3> The Commissioner of Income Tax-I. Chandigarh Versus M/s Bansal Iron Scrap Co. - TMI Issues:Delay in refiling appeal condoned; Appeal under Section 260A of the Income Tax Act, 1961 against penalty deletion under Section 271(1)(c); Whether Assessing Officer recorded satisfaction for penalty initiation; Interpretation of Section 271(1B) of the Act; Retroactive application of Section 271(1B); Legal principles regarding satisfaction for penalty initiation.Analysis:The judgment involves the condonation of delay in refiling the appeal and a revenue appeal under Section 260A of the Income Tax Act, 1961 against the deletion of penalty under Section 271(1)(c). The main issue revolves around whether the Assessing Officer recorded satisfaction for initiating penalty proceedings. The facts reveal that penalty proceedings were initiated without recording satisfaction, leading to the deletion of the penalty by the Tribunal. The revenue argued that Section 271(1B), inserted retrospectively, deems the order of assessment to constitute satisfaction for penalty initiation under Clause (c) of sub-section (1) of Section 271.The court analyzed Section 271(1B) which states that an order containing a direction for penalty proceedings shall be deemed as satisfaction for penalty initiation. Citing precedents, the court emphasized that the existence of satisfaction during assessment is substantial, not merely formal. The court held that the mere mention of separately initiating penalty proceedings in the assessment order does not negate the satisfaction recorded during assessment. The court referred to the decision in Pearey Lal and Sons (EP) Ltd's case, setting aside the Tribunal's decision and remitting the matter for further adjudication on merits.In conclusion, the court allowed the appeal, setting aside the Tribunal's order and remitting the case for a fresh adjudication on the issue of penalty imposition under Section 271(1)(c) and 273(2)(a) in accordance with the law. The judgment clarifies the interpretation of Section 271(1B) and emphasizes the importance of assessing the satisfaction recorded by the Assessing Officer for penalty initiation.
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