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Issues:
1. Jurisdiction of Income Tax Officer to issue a fresh notice under section 28(1) of the Indian Income Tax Act after cancellation of penalty order by Appellate Assistant Commissioner. 2. Interpretation of section 28(1) regarding the timing of issuing penalty notice during ongoing proceedings. 3. Comparison of relevant case laws regarding the initiation of penalty proceedings during ongoing assessments. Analysis: 1. The petitioner sought a prohibition against the Income Tax Officer from proceeding further after a penalty order was cancelled by the Appellate Assistant Commissioner. The main contention was that the Income Tax Officer lost jurisdiction after the assessment proceedings were completed. The petitioner argued that the Department should have appealed against the cancellation of the penalty order, rendering it final. The challenge was against the fresh notice issued by the Income Tax Officer post the cancellation of the penalty order. 2. The interpretation of section 28(1) was crucial in determining the timing of issuing penalty notices. The section allows for the imposition of penalties if certain conditions are satisfied during ongoing proceedings. The court analyzed whether the authorities must be satisfied during the pending proceedings to issue a penalty notice. The restriction seemed to be on the authorities' satisfaction during the ongoing proceedings, limiting their power to issue penalty notices post-assessment. 3. Various case laws were cited to support the argument that penalty proceedings should be initiated during ongoing assessments. The judgments from different High Courts emphasized that authorities must be satisfied during the course of proceedings to impose penalties. The comparison of these cases highlighted the importance of initiating penalty proceedings while the case is pending before the relevant authorities, ensuring procedural compliance and fairness. In conclusion, the court dismissed the writ petition, upholding the validity of the fresh notice issued by the Income Tax Officer under section 28(1) of the Act. The judgment clarified that the initiation of penalty proceedings during ongoing assessments is essential, and the authorities must be satisfied within that period. The court's decision was based on a thorough analysis of relevant legal provisions and precedents, emphasizing procedural requirements and the timing of penalty imposition.
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