TMI Blog2003 (5) TMI 191X X X X Extracts X X X X X X X X Extracts X X X X ..... the case judiciously and the order is contrary to law and facts of the case. 2. Learned CIT(A), Jalandhar is not justified in holding that penalty has been imposed under main provisions of s. 271(1)(c) of the IT Act, 1961, which in fact has been referred to only mechanically and casually after clearly invoking Expln. 3 to s. 271(1)(c) of the IT Act, 1961, while levying the penalty by the learned AO and thus the order of the learned CIT(A), Jalandhar is contrary to the facts and law." 3. Briefly stated, the facts of the case are that no return for the assessment year under consideration was filed by the assessee. The AO issued notice under s. 142(1) of the Act requiring the assessee to furnish the return of income but the assessee did no ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... . 271(1)(c) of the Act are not attracted in this case as almost all particulars of income were available with the IT Department and that there was no attempt on the part of the assessee to conceal any income. It was stated that before penalty can be levied, the AO has to record during the course of assessment proceedings his own satisfaction of availability of ground under cl. (c) of s. 271(1) that the assessee had concealed particulars of his income. The AO had no jurisdiction to initiate the penalty proceedings if he was not satisfied and has not recorded his satisfaction about the existence of the conditions specified in cl. (c) of s. 271(1) before the assessment proceedings are concluded. Reliance was placed on the decision of the Hon'b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ame to Rs. 2,91,780 under the various heads. The break-up of assessed income is as under: Rs. (a) Long term capital gain 37,500 (b) Share from regd. firm 88,580 (c) Salary income 43,200 (d) Dividend income 30,000 (e) Income from other sources 90,000 (f) Income from house property 2,500 Total 2,91,780 The learned CIT(A) further noted that the assessee had neither paid any advance-tax nor any return of income was filed in this case. According to him, the statutory notices were issued to the assessee. In these circumstances, assessment was completed under s. 144 of the Act after collecting necessary infor ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (A) concluded that the AO was justified in imposing the penalty under s. 271(1)(c) of the Act. 6. Shri B.D. Sharma C.A., the learned counsel for the assessee, while appearing for the assessee reiterated the submissions made before the authorities below. He has also invited my attention to the assessment order dt. 18th/25th Feb., 1994, and submitted that the AO had not recorded his satisfaction that the assessee had concealed the particulars of his income or furnished inaccurate particulars of his income. It was also submitted by the learned counsel for the assessee that it is the AO who has to form his own opinion and record his satisfaction before initiating penalty proceedings. Merely because penalty proceedings have been initiated, it ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ajibhai Kanjibhai, it has been held that: "The power to impose penalty under s. 271(1)(c) of the IT Act, 1961, depends upon the satisfaction of the ITO in the course of the assessment proceedings under the Act. It cannot be exercised if he is not satisfied and has not recorded his satisfaction about the existence of the conditions specified in cls. (a), (b) and (c) of s. 271(1) before the assessment proceedings are concluded." The Hon'ble Bombay High Court held that since there was no evidence to show that the ITO was satisfied in the course of assessment proceedings that s. 271(1)(c) was attracted to the case of the assessee, the imposition of penalty by IAC was not justified. In the instant case, also, there is no evidence to establis ..... X X X X Extracts X X X X X X X X Extracts X X X X
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