COMMISSIONER OF INCOME TAX Vs. A.R. CHADHA

JUDGEMENT

(1.) IN all these appeals the question relates to imposition of penalty under s. 271(1)(c) of the IT Act, 1961. The assessment Finance Act, 2008.

(2.) THE Full Bench in the case of CIT vs. Rampur Engineering Co. Ltd. being IT Appeal No. 211 of 2006 and other question of recording of satisfaction with regard to initiation of penalty proceedings under s. 271(1)(c) of the IT Act, 1961 observed as under :

(3.) FROM the above extract, it is apparent that the Full Bench held that although the mere absence of words "I am satisfied" may not be fatal but such a satisfaction must be spelt out from the orders of the assessing authority as to the concealment of the income or deliberate furnishing of inaccurate particulars. The Full Bench held that in the absence of a clear finding as to the concealment of income or deliberate furnishing of inaccurate particulars, the initiation of penalty proceedings would be without jurisdiction. The Full Bench also held that the law is correctly laid down in CIT vs. Ram Commercial Enterprises (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del). assessment orders do not pass the test as laid down by the Full Bench. Apart from merely recording that penalty proceedings under s. 271(1)(c) have been initiated separately, there is no finding in the assessment order as to concealment of income or deliberate furnishing of inaccurate particulars in the assessment order itself. Thus even though penalty proceedings have been initiated, it cannot be said that the AO was satisfied about the existence of conditions specified in cl. (c) before the assessment proceedings were concluded. We also note that the Tribunal had also held that the satisfaction had not been recorded by the AO at the time of initiation of penalty proceedings. The Tribunal also observed that all that had been mentioned in the assessment order was that the penalty proceedings were being initiated separately.