SYAMAL BARAN MONDAL Vs. COMMISSIONER OF INCOME TAX

JUDGEMENT

(1.) BY an order of this Court dt. 10th Jan., 2007 read with order dt. 20th Jan., 2008 the above appeal under s. 260A of IT Act, 1961 (hereinafter as the said Act) was admitted on the following substantial questions of law :

(2.) THE facts leading to preferring this appeal for upsetting the judgement of the learned Tribunal are shortly put hereunder :

(3.) MR . J.P. Khaitan, learned senior counsel for the appellant submits that before initiating penalty proceeding under the aforesaid section satisfaction of the AO ought to have been recorded and recording satisfaction is a precondition to initiate such proceeding. Neither in the order of assessment nor any order before issuance of notice to show-cause nor even in such notice itself the AO recorded his satisfaction. Hence the impugned order of penalty is bad in law as the AO had no jurisdiction to pass such order without recording his satisfaction. In support of his aforesaid legal submission he drew our attention to the decisions of the Delhi High Court in cases of Diwan Enterprises vs. CIT (2001) 167 CTR (Del) 324 : (2000) 246 ITR 571 (Del), CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del), Subhash Gupta (Individual) vs. Dy. CIT (2003) 78 TTJ (Jp)(TM) 692 : (2003) 85 ITD 167 (Jp) (TM) and Jt. CIT vs. A.M. Ltd. 147 Tax 96.