2016 (2) TMI 1206

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....nds. 3. The learned counsel for the assessee seeking admission of the additional grounds submitted that such additional grounds were pure question of law and did not need any fresh verification of records. According to him, it was mandatory that the penalty proceedings u/s 271D and 271E of the IT Act, 1961 are initiated during the course of assessment. In support of his contention, learned AR relied on the judgment of the Hon'ble Apex Court in the case of CIT Vs Jai Laxmi Rice Mills 379 ITR 521(SC). As per the learned AR failure to raise this ground originally was neither willful nor deliberate. All the material that were required for deciding the additional grounds were, as per the learned AR on record. 4. Per contra, learned DR subm....

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.... the original assessment wherein satisfaction regarding initiation of penalty proceedings was expressed, was set aside on appeal filed by the assessee. In the fresh assessment order, there was no expression of any satisfaction regarding initiation of penalty proceedings u/s 271E of the IT Act. Their Lordship held at paras 3-5 as under; "3. After remand, the AO passed a fresh assessment order. In this assessment order, however, no satisfaction regarding initiation of penalty proceedings u/s 271E of the Act was recorded. It so happened that on the basis of the original assessment order dated February 26, 1996, show cause notice was given to the assessee and it resulted in passing the penalty order dated September 23, 1996. Thus, this....