penalty proceedings without recording satisfaction
(1) The judgement of the Division Bench in CIT v. Ram Commercial Enterprises Ltd. (2000) 246 ITR 568 (Delhi) holding that penalty under Section 271(1)(c) of the Act cannot be levied where the authority initiating the penalty proceedings had not recorded its satisfaction regarding concealment of income or furnishing of inaccurate particulars thereof by the assessee is approved.
(2) This position applies till the insertion of sub-section 1B to s. 271 by the Finance Act, 2008 w.r.e.f 1.4.1989 which creates a fiction by which satisfaction of the assessing officer is deemed to have been recorded in cases where an addition or disallowance is made by the assessing officer and a direction for initiation of penalty proceedings is issued.
Related Judgements
- Jamna Auto Industries vs. CIT (P & H High Court) (Full Bench)
While damages or penalty which are compensatory in nature are allowable as a deduction u/s 37(1) of the Act, damages which are penal in nature and in respect of infraction of law are not allowable as a business expenditure. Amounts paid by way of damages for a contractual breach…
- In Re Rescuwear Corporation (Settlement Commission Full Bench)
U/s 245A(b), as amended by the Finance Act 2007 w.e.f. 1.6.2007, “pendency of proceedings for assessment” before the AO for one or more assessment years is a necessary condition for invoking the jurisdiction of the Settlement Commission. Held in that context by Five Member Bench of the ITSC
- Manoj Aggarwal vs. DCIT (ITAT Delhi 5 Member Spl Bench)
It is a precondition to invoking s. 158BD that the AO must, in the course of s. 158BC proceedings, record satisfaction that the income belongs to the other person. In the absence of such finding, s. 158BD cannot be invoked. The satisfaction must be objective and not subjective….
