Law:

Section:

Section 271(1)(c) of the Income-tax Act, 1961 - Penalty - For concealment of income - Assessment year 2002-03 - Assessee was engaged in business of exploration, development and production of hydrocarbons outside India to augment oil security of India - In its return filed for assessment year 2002-03, Assessing Officer made substantial additions by disallowing various deductions claimed by assessee, which amounted to more than 395.85 crores - Simultaneously, Assessing Officer also initiated penalty proceedings under section 271(1)(c) - Assessee preferred an appeal against assessment order passed by Assessing Officer which was partly allowed granting certain relief to it - Against said order assessee filed an appeal before Tribunal which remained pending - In meantime, Assessing Officer continued with penalty proceedings and levied a penalty of Rs. 114.19 crores on assessee based on additions confirmed by Commissioner (Appeals) in quantum appeal - Against said order assessee filed an appeal before Commissioner (Appeals) which remained pending - Subsequently, assessee approached Deputy Commissioner seeking stay of demand of penalty imposed by Assessing Officer - Dy. Commissioner stayed demand of penalty for certain period - Thereafter, assessee moved another application seeking grant of stay - However, Deputy Commissioner declined to grant further stay - At said stage assessee filed an application before Additional Commissioner as well for grant of stay of order - Said application was filed on 13-10-2009 - Whether having regard to fact that assessee was a Government undertaking and quantum appeal was pending decision by Tribunal and appeal against penalty proceedings was pending before Commissioner (Appeals) and had not been heard till material time and, moreover, while rejecting request for further stay no reason was assigned and circumstances under which initial stay was granted continued to be same, till application dated 13-10-2009 filed by assessee before Additional Commissioner was decided, no coercive steps would be taken by department for recovery of amount due - Held, yes - Whether further, department was to be directed to decide penalty proceedings…

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