TMI Blog2020 (12) TMI 82X X X X Extracts X X X X X X X X Extracts X X X X ..... MI 13 - DELHI HIGH COURT] . In absence of recording of the satisfaction in the assessment order, mere initiation of penalty will not confer jurisdiction on the AO to levy the penalty. The order was passed under s. 143(3) and not under s. 144 of the Act. This means that subsequent compliance in the assessment proceedings was considered as good compliance and the defaults committed earlier were ignored by the AO. Therefore, in such circumstances, there could have been no reason to come to the conclusion that the default was willful. See AKHIL BHARTIYA PRATHMIK SHIKSHAK SANGH BHAWAN TRUST. VERSUS ASSISTANT DIRECTOR OF INCOME-TAX. [ 2007 (8) TMI 386 - ITAT DELHI-G] - Decided in favour of assessee. - ITA No. 1169 & 1170/Mum/2019 - - - Date ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... be passed in any other case, after expiry of the financial year in which the proceedings, in the course of which action for imposition of penalty has been initiated, or completed, or six months from the end of the month in which action for imposition of penalty is initiated, whichever period expires later. The learned CIT (A) considered the arguments and pointed out that the order of assessment was subject-matter of appeal and the learned CIT (A) passed order on 21st Jan., 2005. In terms of s. 275(1)(a), the AO could have passed the penalty order upto 31st March, 2006, and the order was passed on 31st March, 2006. Therefore, the order was not barred by limitation. It was pointed out that no cogent, relevant or reliable evidence was produced ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... herefore, cl. (a) of sub-s. (1) of s. 275 cannot be attracted to such proceedings. If that were not so cl. (c) of s. 275(1) would be redundant because otherwise as a matter of fact every penalty proceeding is usually initiated when during some proceedings such default is noticed, though the final fact finding in this proceeding may not have any bearing on the issues relating to establishing default e.g. penalty for not deducting tax at source while making payment to employees, or contractor, or for that matter not making payment through cheque or demand draft where it is so required to be made. Either of the contingencies does not affect the computation of taxable income and levy of correct tax on chargeable income; if cl. (a ) was to be in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... t. Therefore, we are of the view that the ratio of the case of Hissaria Bros. ( supra) will be applicable in this case also. Consequently, it is also held that the order ought to have been passed on or before 31st Sept., 2001, failing which the levy will become barred by limitation. 2.4 Coming to the issue of recording of satisfaction, it may be mentioned that mere initiation of penalty does not amount to satisfaction as held by Hon'ble Delhi High Court in the case of CIT v. Ram Commercial Enterprises Ltd. [2001] 167 CTR (Del) 321 : [2000] 246 ITR 568 (Del). In absence of recording of the satisfaction in the assessment order, mere initiation of penalty will not confer jurisdiction on the AO to levy the penalty. 2.5 We also f ..... X X X X Extracts X X X X X X X X Extracts X X X X
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