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Challenge to notice under section 274 read with section 271 of the Income Tax Act, 1961 based on lack of satisfaction by the Income Tax Officer regarding concealment of income or furnishing inaccurate particulars. Analysis: The judgment by T. K. Basu J. pertains to a challenge against a notice issued under section 274 read with section 271 of the Income Tax Act, 1961. The crux of the matter lies in the requirement that before such a notice can be validly issued, the Income Tax Officer (ITO) must be satisfied during the assessment proceedings that the assessee has concealed income or furnished inaccurate particulars. This principle was established in previous judgments like Stadmed (P.) Ltd. and Turner Morrison and Company Limited v. IAC of Income-tax. The petitioner contended that there was no recorded satisfaction by the ITO in the assessment proceedings regarding concealment or inaccurate particulars. The petitioner's advocate highlighted the order of assessment and argued that it did not reflect the ITO's satisfaction regarding concealment or inaccurate particulars. The affidavit-in-opposition filed by the ITO also did not indicate such satisfaction during the assessment proceedings. The judge noted that the satisfaction of the ITO can be arrived at before or after the assessment proceedings but must be evident from the assessment records, which was lacking in this case. Reference was made to a decision by Sabyasachi Mukherji J. in M/s. Becker Gray & Co. Ltd. v. ITO, which was deemed irrelevant to the present case as it did not address the key issue of satisfaction by the ITO. Additionally, the judgment in CIT v. S. V. Angidi Chettiar was found inapplicable as it pertained to a different context. The judge ultimately held in favor of the petitioner, ruling that the notice was invalid due to the absence of recorded satisfaction by the ITO regarding concealment or inaccurate particulars. As a result, the application succeeded, and a writ of mandamus was issued to recall and withdraw the impugned notice. The respondents were directed to refrain from enforcing the notice, with liberty to proceed according to law. No costs were awarded, and the operation of the order was stayed for six weeks, subject to further extension from the appellate court.
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