2021 (4) TMI 327

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....hat the impugned order dated 01.03.2018 passed u/s 271(1)(b) by the learned Commissioner of Income-tax(Appeals) 18, New Delhi is bad in law and wrong on facts. 2. That on the facts and in the circumstances of the case, the Learned Commissioner of Income Tax (Appeals)-18 erred in law in upholding the penalty of 10,000 levied by the Ld. Assessing Officer under section 271(1)(b) of the Act, for the reasons stated in the impugned order. 3. That the appellant, craves, leave to add, alter, amend, substitute, forgo, any or all the grounds of appeal before or at the time of hearing." (B) Return of income was filed by the assessee on 26.07.2014 which was selected for scrutiny and notice u/s 143(2) of IT Act was issued to the ass....

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....quired details called for. These were examined and case was discussed with the authorized representative. 3. The assessee is a Partnership Firm engaged in the business of Real Estate Development, setting up commercial complexes for sale or letting out and earning rental income there from or for running business/convention centers or dealing in shares and securities and other movable or immovable assets. During the relevant year, assessee has returned income under the head house property, capital gain and other sources. 4. After examination of details submitted by the assessee and discussions held with the AR of the assessee, the income of the assessee for the year under consideration is assessed at Rs. 22,99,79,160/-." ....

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....lso to be kept in mind that assessment proceedings and penalty proceedings are separate and it is irrelevant that the final assessment order was passed u/s i -43(3) of the Act. In view of these facts, 1 am of the opinion that the appellant has failed to comply with the notice issued by the AO without any reasonable cause and therefore, the penalty levied by the AO u/s 271(l)(b) of the Act is confirmed and the grounds of appeal are dismissed." (C) The present appeal before us has been filed by the assessee against the aforesaid impugned appellate order dated 01.03.2018 of the Ld. CIT(A). At the time of hearing, the Ld. Authorised Representative of the assessee submitted that the assessment order dated 03.12.2016 which was passed by the As....

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....ay be mentioned that mere initiation of penalty does not amount to satisfaction as held by Hon'ble Delhi High Court in the case of CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del). In absence of recording of the satisfaction in the assessment order, mere initiation of penalty will not confer jurisdiction on the AO to levy the penalty. 2.5 We also find that finally the order was passed under s. 143(3) and not under s. 144 of the Act. This means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the AO. Therefore, in such circumstances, there could have been no reason to come to the conclusion that....