High Court Of Allahabad
Shyam Biri Works (P) Ltd. vs. CIT
Sections 273(2)(a)
M. Katju & Yatindra Singh, JJ.
IT Appeal No. 3 of 2001
3rd December, 2002
Counsel Appeared
R.P. Agarwal, for the Appellant : A.N. Mahajan, for the Respondent
JUDGMENT
By the court :
Heard Sri R.P. Agarwal learned counsel for the appellant and Shri A.N. Mahajan for the respondent This appeal under s. 260A of the IT Act, 1961, has been filed against the impugned order of the Tribunal dt. 31st Aug., 2000. The case relates to penalty under s. 273(2)(a) of the Act for allegedly furnishing a false estimate of advance tax.
2. Only one point has been pressed by learned counsel for the appellant. He submitted that before issuing notice for initiating penalty proceedings under s. 273(2)(a) of the Act the AO has not recorded his satisfaction. Learned counsel has relied on the decision of the Delhi High Court in CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del). In the aforesaid decision the Delhi High Court has observed that “it is the assessing authority who has to form his own opinion and record his satisfaction before initiating the penalty proceedings”.
3. With profound respect to the Delhi High Court decision, we are unable to agree. It may be noted that whenever the AO has to record his satisfaction under the IT Act, it is specifically mentioned, e.g., in s. 148(2) of the Act which states that “the AO before issuing any notice under the section will record the reason for doing so”. Sec. 273 does not have a similar provision requiring recording the reason or satisfaction. Hence, it has to be inferred that Parliament never intended that before initiating penalty proceedings and issuing notice under s. 273, the AO must record his reasons in writing for doing so. Had that been so there would have been a specific mention about it in s. 273 of the Act. We are, therefore, of the opinion that although the AO must have satisfaction as required under s. 273 of the Act, it is not necessary for him to record that satisfaction in writing before initiating penalty proceedings under s. 273 of the Act. We are fortified in the view, we are taking by the decision of the Calcutta High Court in Becker Gray & Co. (1930) Ltd. vs. ITO (1978) 112 ITR 503 (Cal). For the reasons given above, this appeal has no merit and it is dismissed. No orders as to cost.
[Citation : 259 ITR 625]
