TMI Blog2002 (1) TMI 267X X X X Extracts X X X X X X X X Extracts X X X X ..... tional evidence in contravention of r. 46A." C.O. by the assessee "1. That on the facts and circumstances of the case and in law the learned CIT(A) erred in not quashing the penalty levied by the AO. 2. That the learned CIT(A) should have held that no penalty could be levied in absence of recording of satisfaction of concealment by the AO, before initiating such penalty." 3. The facts concerning the matter, in brief, are thus. For the assessment year under consideration, the assessee had filed his return declaring an income of Rs. 2,16,570 and vide order under s. 143(3) of the Act, the assessment was completed on a total income of Rs. 2,57,830. The difference between the returned and assessed income had arisen because of certain dis ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... mission of the learned Departmental Representative was that the AO had recorded a categorical finding that no documentary evidence in support of the loans claimed to have been taken by the assessee was placed on record by him and, therefore, the learned CIT(A) has erred in reducing the penalty without any basis, may be on consideration of some additional evidence. In reply, the learned counsel for the assessee submitted that the learned CIT(A) had decided the appeal ex parte and, therefore, there was no question of any additional evidence having been taken by him on record. In support of assessee s cross-objection, the learned counsel, while relying upon the decision of the Hon ble Delhi High Court in the case of CIT vs. Ram Commercial Ente ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e above proposition has been reiterated by the Hon ble High Court in the case of Diwan Enterprises vs. CIT Ors. (2001) 167 CTR (Del) 324 : (2000) 246 ITR 571 (Del), in which it is further held that non-recording of satisfaction was a jurisdictional defect which cannot be cured and consequently the subsequent proceedings leading to the passing of the penalty order must fail. In the case before us, on going through the assessment order, we find that it does not record the satisfaction as is warranted by s. 271 for initiating the penalty proceedings. Respectfully following the binding decisions of the jurisdictional High Court and even without going into the merits of the case, we would hold that the AO s penalty order was bad in law and it ..... X X X X Extracts X X X X X X X X Extracts X X X X
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