TMI Blog2005 (5) TMI 48X X X X Extracts X X X X X X X X Extracts X X X X ..... initiating penalty proceedings while passing the assessment order in a routine manner would be an apparent violation of the relevant provisions - impugned order clearly suffers from the infirmity of non-application of mind – penalty not leviable - - - - - Dated:- 5-5-2005 - Judge(s) : SWATANTER KUMAR., MADAN B. LOKUR JUDGMENT The judgment of the court was delivered by Swatanter Kumar J.- The assessee filed the return declaring loss of Rs. 9,62,033 for the assessment year 2001-02 on October 31, 2001. The authorities took up the case of the petitioner for scrutiny under section 143(2)(i) of the Income-tax Act (hereinafter referred to as the "Act"), and served a notice upon the assessee. The assessee was duly represented during the a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t has also relied on some other decisions which are not on comparable facts and therefore, not much relevant. I have considered the issue carefully. The addition on account of EPF, ESIC, etc. have been highly debatable. Levy of penalty on debatable addition specially in view of the decision of the Delhi High Court in the case of Ram Commercial Enterprises v. CIT [2000] 246 ITR 571 does not appear to be legally correct. The penalty is, therefore, deleted. In the result, the appeal is allowed." The above order of the appellate authority dated March 29, 2004, was challenged by the Income-tax Officer-II, New Delhi, before the Income-tax Appellate Tribunal, Delhi Bench, which was also dismissed by the Tribunal. The Tribunal affirmed the ju ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... hich has been reported in the recent judgment of this court in the case of CIT v. B.R. Sharma [2005] 275 ITR 303, I.T.A 340 of 2003 decided on February 3, 2005, which can be properly referred to at this stage. The bare reading of the above order passed by the Assessing Officer on February 6, 2003, shows that there is no application of mind and no opinion has been formed and no satisfaction has been recorded by the Assessing Officer before or at the time of initiating penalty proceedings. In fact, in the impugned order it is recorded that penalty proceedings under section 271(1)(c) for furnishing inaccurate particulars of the income had been initiated separately. This itself shows that without even mentioning the essential ingredients whic ..... X X X X Extracts X X X X X X X X Extracts X X X X
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