Procedure of penalty proceedings.

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....for were not initiated in more than 70% of the cases in which penalty proceedings were started, the ITOs themselves dropped the proceedings. In 65% of the cases in which penalties were imposed, the Appellate authorities held that the penal provisions invoked were not attracted or the defaults sought to be penalised did not, in fact exist. Instances have been found of cyclostyled penalty orders in ....

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....default. He should keep the assessees explanation obtained in writing in the file and also record his reasons for not initiating the penalty proceedings. Care should be taken to avoid initiation of penalty proceedings in a mechanical manner; b) Penalty proceedings should not be initiated: i) in respect of defaults under clause(a) or clause (b) of sub-section 1 of sec.271 or u/s.273 in respec....

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.... the penalty proceeding should ordinarily be completed soon after the assessment. In actual practice the Board consider that in the vast majority of cases, it should be possible to complete penalty proceedings within 6 months of the completion of the relevant assessments and d) An order in a routine manner using a set form should be avoided. An order levying a penalty should be a speaking order....

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....present practice of issuing penalty notices where prima facie the returns indicate default should be continued. When a penalty proceeding is actually initiated it must not be allowed to drag on. After giving a reasonable opportunity of being heard to the assessee the facts and circumstances of the case should be carefully considered with reference to the relevant statutory provisions and penalt....