9911796707
TMI Blog2025 (5) TMI 894X X X X Extracts X X X X X X X X Extracts X X X X ..... ) against the order of the Income Tax Appellate Tribunal, Jaipur (for short 'the tribunal') dated 25.11.2022. 2. Appeals are being decided by this order as the facts and issues involved are similar. For convenience, the facts are being taken from D.B. Income Tax Appeal No.81/2023. 3. The brief facts are that consequent to search conducted on 07.09.2017 at the residential and business premises of Resonance Group, Kota, notice under Section 153A of the Act dated 05.07.2018 was issued to the assessee-respondent (hereinafter referred to as 'assessee'). The assessee furnished return on 18.07.2018 declaring income of Rs. 15,67,000/-. The assessment was finalized vide order dated 22.12.2019 and the income was assessed at Rs. 70,67,000/-. The ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act was not on the statute book during the relevant assessment year and the satisfaction recorded for initiating penalty u/s 271AAB of the Act was erroneous. 5. Learned counsel for the assessee submits that no satisfaction was recorded by the A.O. for initiating penalty proceedings u/s 271(1)(c) of the Act. 6. The issue involved is:- whether initiation of penalty proceedings under two sections by A.O. by recording satisfaction for one section makes the order erroneous and prejudicial to interest of revenue and revisional authority can direct A.O. to initiate penalty proceedings under other section after recording satisfaction? Section 271(1) of the Act is quoted below:- Failure to furnish returns, comply with notices, concealment ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... was involved. The A.O. recorded satisfaction for initiating penalty proceedings u/s 271AAB of the Act as the assessee had offered Rs. 55 lacs for taxation in the statement recorded during the search proceedings. Relevant portion of the order is reproduced: "Since the assessee has offered Rs. 55 Lacs for taxation in his statement u/s 132(4) during search proceeding but has not included the same amount in his return filed u/s 153A on 18.07.2018 and not paid the taxes, I am satisfied that the provision of section 271AAB(1A) is applicable in this case. Therefore penalty proceeding u/s 271AAB(1A) is initiated accordingly." 8. In the concluding part of the order, the A.O. initiated penalty proceedings u/s 271(1)(c) of the Act. In the same par ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f Income Tax, Madras and Anr. Vs. S.V.Angidi Chettfar (supra) was relied upon by the Supreme Court in D.M. Manasvi Vs. Commissioner of Income Tax, Gujarat, II Ahmedabad reported in (1972) 86 ITR 557(SC). 12. In Additional Commissioner of Income Tax. Vs. J.K.D.' Costa reported in (1982) 133 ITR 7, the Delhi High Court held that the assessment and penalty are two independent proceedings. In revision the assessment proceedings cannot be expanded to bring penalty proceedings within ambit of assessment. The failure of the A.O. to record satisfaction for levying of penalty in the assessment order shall not make it erroneous to be prejudicial to the interest of revenue. The SLP against order of the Delhi High Court was dismissed. 13. The Divisio ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 265 ITR 82 (Delhi); Commissioner of Income Tax Vs. Ram Commercial Enterprises Ltd. reported in (2000) 246 ITR 568 (Delhi) relying upon the Supreme Court decision in D.M. Manasvi (supra) held that initiation of penalty proceedings cannot be equated for the requisite of recording satisfaction by the A.O. in assessment order for initiation of penalty proceedings. Satisfaction has to be spelt out in the order of the A.O. 15. The Supreme Court in Commissioner of Income Tax vs. Jai Laxmi Rice Mills reported in (2015) 379 ITR 521 (SC) held that satisfaction recorded for penalty proceedings u/s 271 (1) (c) of the Act cannot be the basis to start penalty proceedings under Section 271(E) of the Act and the penalty proceedings were quashed. 16. Fro ..... X X X X Extracts X X X X X X X X Extracts X X X X
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