T.K.Basu, J. - (1.) In this rule the petitioner challenges a notice dated the March 6, 1974, purported to have been issued under Section 274 read with Section 271 of the I.T. Act, 1961 (hereinafter referred to as the Act). Although several grounds have been taken in this petition challenging the notice, this rule can be disposed of on a single ground. It is now well settled that before a. notice under Section 274 read with Section 271 can be validly issued, the ITO must be satisfied in the course of the assessment proceedings that the assessee has concealed the particulars of his income or has furnished inaccurate particulars of his income. If any authority is needed for this proposition, a reference may be made in my own judgment in the case of Stadmed (P.) Ltd., as also the un- reported decision of Amiya Kumar Mookerji J. in C.R. Nos. 298(W) and 299 (W) of 1971 (Turner Morrison and Company Limited v. IAC of Income-tax, Range II). These cases have fairly established the principle that the condition precedent for the assumption of jurisdiction for the issue of a notice proposing to impose a penalty under Section 274 read with Section 271 of the Act is that the ITO should be satisfied that the assessee had concealed the particulars of his income or had deliberately furnished inaccurate particulars of such income.
(2.) In the instant case, a direct challenge had been thrown by the petitioner that there was no recorded satisfaction of the ITO in the course of the assessment proceedings that he was so satisfied before he directed the impugned notice for the imposition of penalty to be issued.
(3.) Mr. Mihir Lal Bhattacharyya, learned advocate appearing on behalf of the petitioner, has drawn my attention to the order of assessment which has been set out as annex. B to the petition. On the basis of the order of assessment, it is contended that there is nothing to show that the ITO was satisfied that the petitioner had concealed the particulars of his income or has furnished inaccurate particulars of income. My attention is drawn also to the affidavit-in-opposition filed by the ITO in answer to the rule. It is submitted that there was no statement that the ITO was at any stage in the course of the assessment proceedings satisfied that the petitioner was guilty of concealment or of furnishing inaccurate particulars of his income.;