COMMISSIONER OF INCOME-TAX Vs. MANGAT RAI CONTRACTOR

JUDGEMENT

(1.) This appeal has been preferred by the revenue under Section 260A of the Income Tax Act, 1961 (in short "the Act") against order dated 04.03.2008 passed by the Income Tax Appellate Tribunal, Amritsar Bench, Amritsar (hereinafter referred to as "the Tribunal") in ITA No. 27(ASR)/2008, for the assessment year 2002-03, claiming following substantial question of law:

(2.) The Assessee is a civil contractor. While making assessment, the Assessing Officer found that the Assessee had claimed inflated expenses to conceal the income. Accordingly, the Assessing Officer made additions to the declared income and also initiated penalty proceedings. Satisfaction for initiating penalty proceedings was clearly discernible from the observations in the order of assessment as also direction at the end of order of the assessment that penalty proceedings be initiated separately. The additions were duly sustained by the CIT(A) as well as the Tribunal which became final. Penalty was also affirmed by the CIT(A) but the Tribunal set aside the levy of penalty only on the ground that satisfaction had not been duly recorded in the order of assessment. The observation of the Tribunal is as under:

(3.) The appeal was admitted in view of judgment of this Court dated 25.9.2008 in Commissioner of Income-Tax v. Pearey Lal and Sons (EP) Ltd, 2009 308 ITR 438 (P&H).