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TMI Blog2005 (12) TMI 219X X X X Extracts X X X X X X X X Extracts X X X X ..... s erred in deleting the penalty under s. 271(1)(c) amounting to Rs. 6,80,000 in respect of furnishing of inaccurate particulars of income in respect of claims/deduction." 3. In C.O. No. 192/Del/2005, the assessee has taken the following grounds: "1. On the facts and in the circumstances of the case, the Departmental appeal filed by the Dy. CIT, Ward-2(1), New Delhi, is incompetent and not maintainable in law as the original assessment was made by the ITO and penalty was also levied by the ITO only illegally and hence, the Dy. CIT had no jurisdiction or authority to file the appeal on behalf of the Revenue. 2. The order of CIT(A) quashing the penalty was passed on29th Nov., 2004and the appeal of the Revenue appears to have been filed b ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atural justice and hence unauthorized by law. 8. The orders passed are also barred by limitation and violative of natural justice besides being indicative of non-application of mind, fairly and objectively, to the facts of the case and the law applicable and, therefore, the orders of the ITO ought to have been vacated/annulled. Since the CIT(A) has vacated the same, although on different ground, the assessee is entitled to agitate against the orders of the ITO through the present cross-objections even on other grounds, both factually and legally and hence the present cross-objection is being filed to be heard along with the Departmental appeal." 4. We have heard the learned representatives of both the parties at length. Shri R. Santhana ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ional High Court in the case of CIT vs. Ram Commercial Enterprises Ltd. (2001) 167 CTR (Del) 321 : (2000) 246 ITR 568 (Del). The Hon'ble High Court, following the judgment of Supreme Court in the case of CIT vs. S. V. Angidi Chettiar (1962) 44 ITR 739 (SC), held that mere observation of the AO that penalty proceedings are being issued separately does not amount to satisfaction in terms of the provisions of s. 271(1)(c). The relevant observations of Their Lordships are quoted below: 'A bare reading of the provisions of s. 271 and the law laid down by the Supreme Court makes it clear that it is the assessing authority which has to form its own opinion and record its satisfaction before initiating the penalty proceedings. Merely because the ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... he report, it is clear that endorsement was to the effect that action under s. 28 had been taken for concealment of income. However, in the case before the Hon'ble High Court, there was no such endorsement. Nowhere the AO observed that penalty proceedings were being initiated either for concealment of the particulars of income or for furnishing of inaccurate particulars of income in terms of s. 271(1)(c). In the absence of such observations, their Lordships held that recording of the satisfaction was condition precedent for initiating the penalty proceedings and mere observations that penalty proceedings are being initiated separately was not suffice to initiate valid penalty proceedings. In a recent judgment in the case of CIT vs. Vikas Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X
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