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Issues involved: Appeal against penalty under section 271(1)(c) of the Income-tax Act, 1961 for assessment year 1997-98.
Summary: 1. The appeal was filed against the order of the Income-tax Appellate Tribunal which set aside the penalty imposed under section 271(1)(c) of the Act due to lack of satisfaction recorded by the Assessing Officer regarding concealment or inaccurate particulars furnished by the assessee. 2. The revenue argued that satisfaction of the officer for initiating penalty proceedings should be discernible from the assessment order itself, referencing previous court decisions. However, the High Court found that the assessment order in this case did not reflect the necessary satisfaction as required by law. 3. The High Court noted that the Assessing Officer's observation in the assessment order regarding penalty proceedings did not meet the criteria specified in section 271(1)(c) of the Act, as explained in previous court rulings. The lack of satisfaction for initiating penalty proceedings was evident upon detailed perusal of the assessment order. 4. The revenue's argument that setting off speculation loss against business income justified penalty proceedings was rejected by the High Court, as it did not indicate the necessary satisfaction of the Assessing Officer to initiate such proceedings. 5. Ultimately, the High Court concluded that no substantial question of law arose in this case and dismissed the appeal against the penalty under section 271(1)(c) of the Income-tax Act for the assessment year 1997-98.
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