Delhi H.C : The impugned order the Tribunal has deleted the penalty levied on the respondent-assessee under s. 271(1)(c)

High Court Of Delhi

CIT vs. Super Metal Re-Rollers (P) Ltd.

Sections 260A

Asst. Year 1993-94

D.K. Jain & Madan B. Lokur, JJ.

IT Appeal No. 252 of 2003

29th September, 2003

Counsel Appeared

Sanjiv Khanna, for the Appellant : None, for the Respondent


D.K. JAIN, J. :

This appeal by the Revenue under s. 260A of the IT Act, 1961, is directed against order, dt. 4 Oct., 2002, passed by the Tribunal, Delhi Bench ‘SMC-II’, New Delhi (for short ‘the Tribunal’) in ITA No. 998/Del of 1998. By the impugned order the Tribunal has deleted the penalty levied on the respondent-assessee under s. 271(1)(c) of the Act, in respect of asst. yr 1993-94, on the ground that in the assessment order the AO has not recorded his satisfaction, as contemplated under s. 271(1)(c). While coming to the said conclusion, the Tribunal has placed reliance on the decision of this Court in CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del).

2. We have heard Mr. Sanjiv Khanna, learned senior standing counsel for the Revenue.

3. Assailing the order passed by the Tribunal Mr. Khanna has submitted that during the course of assessment proceedings the assessee was required to furnish the details of the searches conducted by the Central excise department with the other relevant information and it was on account of detection of concealed income by him that the assessee, vide their letter dt. 26th March, 1996, had surrendered an income of Rs. 4.25 lacs. Thus, the submission is that that satisfaction of the AO, as contemplated in s. 271(1)(c) of the Act was inherent in the queries raised by him during the course of assessment proceedings. It is urged that the AO had directed issue of notice for levy of penalty under the said section after being satisfied that the assessee had concealed particulars of its income and, therefore, the Tribunal was not correct in deleting the penalty on a technical ground.

4. We do not agree. From the order-sheets for the proceedings held before the AO, placed on record by learned counsel for the Revenue, and the order of assessment, where AO had noted “penalty notice under s. 271(1)(c) of the Act have been issued separately”, we find that there is no significant difference in the facts of the present case and Ram Commercial Enterprises Ltd. (supra).

5. In Ram Commercial Enterprises Ltd. (supra), wherein R.C. Lahoti, J (as his Lordship then was), speaking for the Court), while placing reliance on the decisions of the Supreme Court in D.M. Manasvi vs. CIT 1972 CTR (SC) 437 : (1972) 86 ITR 557 (SC), 562 and CIT vs. S.V. Angidi Chettiar (1962) 44 ITR 739, 745 (SC) has observed thus : “A bare reading of the provisions of s. 271 and the law laid down by the Supreme Court makes it clear that it is the assessing authority which has to form its own opinion and record its satisfaction before initiating the penalty proceedings. Merely because the penalty proceedings have been initiated, it cannot be assumed that such a satisfaction was arrived at in the absence of the same being spelt out by the order of the assessing authority. Even at the risk of repetition we would like to state that the assessment order does not record the satisfaction as warranted by s. 271 for initiating the penalty proceedings.”

6. In view of the said decision, which is on all fours to the facts in hand, no question of law, much less a substantial question of law survives for our consideration. We accordingly decline to entertain the appeal.

7. Dismissed.

[Citation : 265 ITR 82]

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