TaxTMI 
TaxTMI 
2008 (9) TMI 142
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....oposing to raise the following substantial question of law: "Whether, on the facts and in the circumstances of the case, the hon'ble Tribunal has erred in law in deleting the penalty of Rs. 2,90,296 levied under section 271(1)(c) of the Act when concealed income had been brought to tax under section 147/148 of the Act?" 2. Original assessment in the case of the assessee for the assessment year 1982-83 took place on September 21, 1984, under section 143(3) of the Act. The assessment was reopened under section 147 of the Act and completed on July 28, 1989. Addition was made on account of interest income. Finally, the Assessing Officer completed the assessment on March 24, 2000, and also initiated penalty proceedings. After undergoing th....
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....he course of assessment, which was a condition required to be followed in terms of section 271(1)(c) of the Act. The view of the Tribunal was erroneous. There was no statutory requirement of any format to be followed for recording satisfaction. The only requirement is of existence of satisfaction for initiating penalty proceedings. The satisfaction has to be followed by issuance of notice and giving of opportunity to the assessee and in case for penalty was made out, the proceedings could not be held to be invalid on the ground of form of recording satisfaction. Learned counsel for the Revenue relied upon the judgment of the Madras High Court in M. Sajjanraj Nahar v. CIT [2006] 283 ITR 230 and the judgment of the Allahabad High Court in Nai....
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.... N. Shroff v. Joint CIT [2007] 291 ITR 519. 6. We have considered the rival submissions and perused the judgments relied upon. 7. A reference may be made. to the relevant statutory provision of section 271(1): "271. (1) If the Assessing Officer or the Commissioner (Appeals) or the Commissioner in the course of any proceedings under this Act, is satisfied that any person—........ (b) has failed to comply with a notice under sub-section (2) of section 115WD or under sub-section (2) of section 115WE or under sub-section (1) of section 142 or sub-section (2) of section 143 (or fails to comply with a direction issued under sub-section (2A) of section 142), or (c) has concealed the particulars of his income or furnished inaccurat....
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....ear. The present is not a case of inferring satisfaction from mere initiation of penalty proceedings. The said judgment is, thus, distinguishable. 10. As regards the judgment of the Andhra Pradesh High Court in V. V. Projects and Investments P. Ltd. [2008] 300 ITR 40, we find that the only observation therein is of existence and recording of satisfaction and not of any particular format. 11. On the other hand, in the judgment of the Madras High Court in M. Sajjanraj Nahar [2006] 283 ITR 230, it has been observed as under (pages 250-51) "38 . . . that a mere indication as to the initiation of the penalty proceedings separately in the assessment order is tantamount to an indication as to the satisfaction of the authorities that the a....
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....llahabad High Court in Nainu Mai Het Chand [2007] 294 ITR 185, it was observed (pages 191, 192, 195): "So far as the question of recording the satisfaction by the Income-tax Officer is concerned, we find that the apex court in the case of D. M. Manasvi [1972] 86 ITR 557 has held that merely because notices for imposition of penalty were issued subsequent to making of the assessment order, would not show that there was no satisfaction of the Income-tax Officer during the assessment proceedings that the assessee had concealed the particulars of his income or has furnished incorrect particulars of such income. In paragraph 8 of the report, the apex court has held as follows (page 561): 'The fact that notices were issued subsequent to the....
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....ench of this court in the case of CIT v. S. V. Angidi Chettiar [1962] 44 ITR 739 Shah J., speaking for the court, while dealing with section 28 of the Indian Income-tax Act, 1922, observed: 'The power to impose penalty under section 28 depends upon the satisfaction of the Income-tax Officer in the course of proceedings under the Act; it cannot be exercised if he is not satisfied about the existence of conditions specified in clause (a), (b) or (c) before the proceedings are concluded. The proceeding to levy penalty has, however, not to be commenced by the Income-tax Officer before the completion of the assessment proceedings by the Income-tax Officer. Satisfaction before conclusion of the proceeding under the Act, and not the issue of a ....