1985 (10) TMI 139

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..... ainst the assessee and, therefore, cancelled the penalties. The revenue has now come in these appeals and the only ground which has been set up in each of the appeals is as under: "On the facts and in the circumstances of the case the CIT(A) erred in deleting the penalty under s. 271(1)(c) at Rs. 23,680 and Rs. 22,000." 3. We have heard the ld. Departmental Representative and the ld. counsel for the assessee and have perused the record. 4. The ld. CIT(A) has cancelled the penalties holding firstly that the ITO did not record any satisfaction as required by s. 271(1)(c) during the course of assessment proceedings and secondly that the charge of concealment of income was not made out against the assessee. The ld. Departmental Representa .....

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..... s well as of the demand notice. The assessments for both the years were made on the same date i.e., 22nd Feb., 1979 and are identical in contents but for the figures. We may reproduce below the relevant portion of the assessment order for 1965-66: "Shri P. C. Jain advocate, attended on behalf of the assessee and case discussed with him. As discussed at length in my order of date for the asst. yr. 1963-64, total income of the assessee is computed as overleaf: Income as per original assessment 82,143 Income earned in the name of Narendra Kumar (Rs. 6,456+343+491+12,923 20,213 Total income Rs. 1,02,356 Assessed. Issued emand notice and challan. Sd/-D.U. Gedam, ITO" 5. The penalty orde .....

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..... D. Sharma. ITO C R Ward, Cir. I, Indore". 6. A perusal of both these orders would show that the basic facts from which the intention to conceal income may be inferred are nowhere mentioned. The assessment order does not indicate the reasons for difference in the income returned and in the income assessed. It is an innocuous order and if there was nothing else how could the ITO have acquired a satisfaction that the assessee is guilty of concealment. When there is nothing on record and the assessment order does not speak of any contumacious conduct on the part of the assessee, it is difficult to accept that the ITO had acquired the requisite satisfaction during the course of the proceedings. The mere fact that the notice under s. 274 .....

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