COMMISSIONER OF INCOME TAX Vs. LATE H.L. MALHOTRA
HIGH COURT OF DELHI
COMMISSIONER OF INCOME TAX
Late H.L. Malhotra
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(1.) DESPITE service, no one appears for the Respondent.
(2.) INCOME -tax Appellate Tribunal ('Tribunal') Delhi Bench 'E', New Delhi in ITA No. 3249/Del/2003 for the asst. yr. 1985 - 86.
(3.) BY the impugned order, the Tribunal allowed the appeal filed by the assessee challenging the levy of penalty under s. 271(1)(c) of the Act. The penalty was set aside by the Tribunal on the ground that the AO had not recorded any satisfaction in the assessment order that there was either concealment or inaccurate particulars furnished by the
assessee. Ms. Prem Lata Bansal, learned senior standing counsel for the Revenue submits that in CIT vs. Ram
Commercial Enterprises Ltd. (2001) 167 CTR (Mad) 321 : (2000) 246 ITR 568 (Mad) this Court has taken the view that
if the AO does not record his satisfaction in the assessment order that penalty proceedings should be initiated against
the assessee the subsequent order levying penalty would be bad in law. However, she says that another Bench of this
Court has in CIT vs. Rampur Engg. Co. Ltd.(2006) 204 CTR (Del) 149 : (2006) 155 Taxman 223 (Del) referred the
following substantial question of law to a larger Bench which according to the referring Bench was not considered in Ram
Commercial Enterprises Ltd. :
"Whether satisfaction of the officer initiating the proceedings under s. 271 of the IT Act can be said to have been recorded even in cases where satisfaction is not recorded in specific terms but is otherwise discernible from order passed by the authority - She accordingly submits that this Court should await the decision of the larger Bench.
We find that the decision of this Court in Ram Commercial Enterprises Ltd. has been approved by the Supreme Court in Dilip N. Shroff vs. Joint CIT (2007) 210 CTR (SC) 228 : (2007) 291 ITR 519 (SC) and T. Ashok Pai vs. CIT (2007) 210
CTR (SC) 259 : (2007) 292 ITR 11 (SC).;
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