For initiation of penalty proceedings under section 271(1)(c) of the Income-tax Act, 1961, the satisfaction of the Assessing Officer that the matters mentioned in clauses (a) to (d) of section 271 subsist, is to be recorded during the course of the proceedings. The assessment and penalty are separate proceedings. The recording of the satisfaction has to be during the course of the proceedings though the notice can be issued during or after the proceedings. Once the satisfaction is recorded, the penalty can be imposed after conclusion of the proceedings but within the limitation period provided under section 275. The initiation of penalty proceedings by the Assessing Officer during the proceedings is not a substitute for recording of the satisfaction in the order. The assessment order cannot be held to be erroneous and prejudicial to the interests of the Revenue for non-recording of the satisfaction by the Assessing Officer to initiate the penalty proceedings. The satisfaction has to be of specific provisions and penalty proceedings cannot be initiated a different provision for which no satisfaction was recorded.(AY. 2012-13 to 2018-19)