2025 (11) TMI 755 - SCH - Income Tax

Penalty under Section 271(1)(c) invalid for vague satisfaction and defective notice; revenue's challenge dismissed under Article 136

SC upheld the HC's decision quashing the penalty imposed u/s 271(1)(c). It agreed that the AO failed to record clear satisfaction regarding the specific ... Penalty imposed u/s 271(1)(c) - mandation of recording satisfaction - as decided by HC [2024 (1) TMI 1507 - BOMBAY HIGH COURT] AO while completing the assessment has not recorded proper satisfaction as to which limb of section 271(1)(c) has not been fulfilled by the assessee and consequently no proper show cause notice was given to the assessee before initiating the penalty proceedings under section 271(1)(c) of the Act. Even otherwise, the said satisfaction was recorded in respect of the non denial of exemption under section 10(23C) (vi) of the Act and not in respect of other additions made by the AO. HELD THAT:- We do not find a good ground to interfere with the impugned judgment in exercise of our jurisdiction under Article 136 of the Constitution of India. Accordingly, the special leave petition is dismissed. 'Delay condoned.' The Court, invoking its discretionary jurisdiction under Article 136 of the Constitution of India, stated: 'We do not find a good ground to interfere with the impugned judgment in exercise of our jurisdiction under Article 136 of the Constitution of India.' Accordingly, 'the special leave petition is dismissed.' All pending applications, if any, 'shall stand disposed of.' The order is summary in nature-denial of exceptional relief without entertaining merits-based interference-leaving the impugned judgment intact and concluding the matter before the Court.