1994 (4) TMI 111

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..... the advance tax paid at Rs. 2,27,500 fell short of 83-1/3% of the finally assessed tax amounting to Rs. 3,40,384. He issued a show cause notice to the assessee. In reply, the assessee submitted that the statement of advance tax submitted by the assessee under s. 209A was based on latest completed assessment for the asst. yr. 1983-84 and later on filed its revised estimate believed to be true based on the computation of income on the relevant dates. The assessee also challenged the legality of penalty notice issued by the Assessing Officer when it pointed out that penalty proceedings did not stand initiated in the assessment order. The Assessing Officer, however, rejected both the contentions of the assessee and imposed penalty of Rs. 11,230 .....

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..... that there was no initiation of penalty proceedings. The learned Departmental Representative invited our attention to para 4 of order of the CIT(A) and submitted that the learned CIT(A) had duly verified that the Assessing Officer had recorded a note in the order sheet for initiation of penalty proceedings. 5. We have heard learned representatives for both the parties and have also perused the relevant record including para 4 of the learned CIT(A). We notice that that the Assessing Officer did not record his satisfaction for initiation of penalty proceedings in the assessment order is not in dispute. The plea taken by the learned Departmental Representative that the Assessing Officer had recorded his satisfaction in a note in the order sh .....

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..... 86 ITR 557 (SC) it has been laid down that what is contemplated by s. 271(1) is that the Assessing Officer should have been satisfied in the course of assessment proceedings regarding matters mentioned in cls. (a) (b) and/or (c) of that sub-section. The Hon'ble Supreme Court held that it is the satisfaction and not issue or service of notice in the course of assessment proceedings which invest the Assessing Officer with the jurisdiction to levy penalty. Also see CIT vs. S.V. Angidi Chettiar (1962) 44 ITR 739 (SC). This apart even the show-cause notice does not specify the default the assessee is charged with. Further, it has also not been established by the Revenue that the assessee furnished estimates of advance tax which he knew or had r .....

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