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2019 (5) TMI 1609 - ITAT DELHILevy of penalty u/s 271(1) (c) - non-recording of proper satisfaction by AO for initiating the penalty proceedings - no proper service of notice - HELD THAT:- The facts involved in this matter are very similar to the facts involved in the case of CIT vs Virgo Marketing (P) Ltd. [2008 (1) TMI 15 - HIGH COURT, DELHI] wherein while assessing the income of the assessee, at the end of the order, AO observed “Penalty proceedings u/s. 271(1)(c) have been initiated separately.” There was no proper satisfaction recorded by the learned Assessing Officer while concluding the assessment, and while respectfully following this decision of the Hon’ble jurisdictional High Court in this case, we conclude that there is no proper recording of satisfaction by the Ld. AO while initiating the penalty proceedings. AO to assume jurisdiction u/s 271(1)(c) of the Act, proper notice is necessary and because of the defect in notice u/s 274 of the Act and on the facts of this case, it is difficult to hold that the learned AO rightly assumed jurisdiction to pass the order levying the penalty. Because of non-recording of proper satisfaction for initiating the penalty proceedings, the penalty cannot be sustained. We accordingly quash the penalty proceedings. - Decided in favour of assessee
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