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2005 (1) TMI 74 - HC - Income TaxPenalty – non-application of mind – recording of reasons - order under section 143(3)(i) of the Act was passed by the Assessing Officer and at the end of the said order he also issued demand notice and challan for imposition of penalty as assessed under section 271(1)(c) - held that it is mandatory to record satisfaction before drawing an inference for the purpose of levying penalty which completing the assessment under section 143(3). - The provisions of section 271(1)(c) are penal in nature thus must be strictly construed, the element of satisfaction should be apparent from the order itself. It is not for the courts to go into the mind of the authorities or trace the reasons from the files of such authorities – Order of AO is bad in law
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