Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 1994-95 - Whether provisions of section 271(1)(c) contemplate recording of satisfaction by Assessing Officer which would form basis of discretion exercisable by such authority, under provisions of Act - Held, yes - Whether where penalty proceedings were initiated without recording requisite satisfaction by Assessing Officer and even order of assessment prima facie did not establish concealment or furnishing of inaccurate particulars, initiation of penalty proceedings was not valid - Held, yes FACTS The Assessing Officer made an addition to the income of the assessee on account of receipt of compensation for acquisition of agricultural land and, accordingly, imposed penalty under section 271(1)(c). On appeal, the Commissioner (Appeals) viewed that there was neither concealment nor inaccurate particulars had been furnished inasmuch as the assessee had acted bona fidely and as the disclosure had been made before assessment, the penalty imposed by the Assessing Officer was not sustainable. On appeal, the Tribunal held that the question as to whether the land in question was agricultural land or not was pending adjudication by the High Court and nowhere the Assessing Officer had pointed out that the added income would be treated as concealed income or inaccurate particulars of income attracting penalty under section 271(1)(c) and, therefore, initiation of penalty proceedings itself was not valid, and imposition of penalty on the basis of such notice was invalid. On appeal : HELD In the order of the Assessing Officer there was no reasoning, much less an appropriate reasoning had been given which could in any way demonstrate that the Assessing Officer had recorded its satisfaction at the time of initiation of the penalty proceedings. The provisions of section 271(1)(c ) contemplate recording of satisfaction by the Assessing Officer which would form basis of discretion exercisable by such authority under the provisions of the Act. The discretion that is indicated by the Legislature by using the expression 'may' is of wide connotation. It is a settled cannon of…

Deprecated: trim(): Passing null to parameter #1 ($string) of type string is deprecated in /home/digixyei/sldsystempk.com/view/master-layout/view_case.php on line 492