TaxTMI 
TaxTMI 
1971 (12) TMI 30
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.... the imposition of penalty were taken against the assessee for concealment of income represented by cash credit entries in the accounts of four creditors during the previous year relevant to the assessment year 1963-64. The Inspecting Assistant Commissioner examined the four creditors and upon the material before him held that the explanation submitted by the assessee in respect of the cash credit entries was false. He imposed a penalty of Rs. 28,070. In appeal before the Income-tax Appellate Tribunal, the assessee contended that the penalty proceedings had not been commenced during the course of the assessment proceedings and were, therefore, invalid. The Tribunal accepted the plea and allowed the appeal. According to the facts found by....
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....made unless the assessee has been heard, or has been given a reasonable opportunity of being heard. (2) Notwithstanding anything contained in clause (iii) of sub-section (1) of section 271, if in a case falling under clause (c) of that sub-section, the minimum penalty imposable exceeds a sum of rupees one thousand, the Income-tax Officer shall refer the case to the Inspecting Assistant Commissioner who shall, for the purpose, have all the powers conferred under this Chapter for the imposition of penalty. 275. No order imposing a penalty under this chapter shall be passed after the expiration of two years from the date of the completion of the proceedings in the course of which the proceedings for the imposition of penalty have been co....
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....or the exercise of the jurisdiction. " While the statute does not require any formal order recording the satisfaction of the Income-tax Officer that the assessee has committed the default mentioned in section 271(1), it is sufficient for the validity of the penalty proceeding if there is something to show that the Income-tax Officer was satisfied in the course of the assessment proceeding before the penalty proceeding is commenced. That evidence is forthcoming, as in the present case, if the Income-tax Officer records in the assessment order itself that he is satisfied that it is a case in which a penalty proceeding should be taken. As the Supreme Court has pointed out in Angidi Chettiar, that is the only condition requiring compliance d....
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.... concluded. In our opinion, the contention is without force. No such implication can be spelled out from section 275. The section, in its essential content, is a provision prescribing the period of limitation for making a penalty order. It is not a provision prescribing the point of commencement of the penalty proceeding. It is concerned with the order which concludes the penalty proceedings. When it refers to the completion of the proceeding in the course of which the penalty proceeding is commenced, in substance it identifies the former proceeding for the purpose of defining the point of time from which the period of limitation for making the penalty order must be computed. We are of opinion that the Income-tax Officer need only be sat....