AJAY KUMAR MITTAL, J. - (1.) THIS appeal under S. 260A of the IT Act, 1961 (for short "the Act") has been filed by the Revenue against the order dt. 2nd March, 2006, passed by the Income-tax Appellate Tribunal New Delhi Bench 'SMC', New Delhi (in short "the Tribunal") in ITA No. 4892/Del/2005, relating to the asst. yr. 1993-94.
(2.) THE appeal was admitted on 26th March, 2007 for determination of the following substantial question of law : "Whether on the facts and in the circumstances of the case, the learned Tribunal was right in law in confirming the order of CIT(A) in cancelling the penalty levied under S. 271(1)(c) by placing reliance upon the case of CIT vs. Munish Iron Store (2004) 186 CTR (P&H) 159 : (2003) 263 ITR 484 (P&H) whereas facts of the two are entirely different ?" The facts, in brief, necessary for adjudication as narrated in the appeal, are that during the assessment year under consideration, the assessee had received a gift amounting to Rs. 1,75,000 on payment of the equal amount in cash, along with premium for arranging that gift. During proceedings under S. 148 of the Act initiated against the assessee, the amount equal to the amount of the gift, i.e. Rs. 1,75,000 and Rs. 17,500 on account of premium @ 10 per cent were added to the income of the assessee. The Commissioner of Income-tax (Appeal){in short "the CIT(A)"}, confirmed the order of the AO whereas the Tribunal accepted the appeal of the assessee and deleted the penalty vide order dt. 22nd Sept., 2005. Meanwhile proceedings under S. 271(1)(c) of the Act were also initiated against the assessee whereby a penalty of Rs. 82,000 was imposed on the assessee. The assessee preferred appeal against imposition of penalty. The CIT(A) cancelled the penalty imposed, vide order dt. 26th Oct., 2005. The appeal carried by the Revenue was dismissed by the Tribunal vide order under appeal and it was observed that since the AO had not recorded his satisfaction before initiating the penalty proceedings, the order of penalty could not be sustained.
(3.) HENCE , this appeal at the instance of the Revenue.;