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TMI Blog2006 (6) TMI 109X X X X Extracts X X X X X X X X Extracts X X X X ..... L. Bansal, Vishnu Sharma, Ms. Rashmi Chopra and Ms. Sonia Mathur for the appellant. O. P. Sapra, Sandeep Sapra, Ajay Vohra, Ms. Kavita Jha, Anil Sharma, Arun Khosla, Manoj Arora, V. P. Gupta, Basant Kumar, A. K. Babbar, V. K Sabharwal, Dr. Rakesh Gupta, Tarun Kumar, Jitender Saini, O. S. Bajpai, R. M. Mehta, Ms. Radha, Satyen Sethi and Rajesh Mahna for the respondent. JUDGMENT The judgment of the court was delivered by T. S. THAKUR J.— The Income-tax Appellate Tribunal has, in all these cases, either deleted or affirmed the deletion of penalty levied upon the assessee under section 271(1)(c) of the Income-tax Act, 1961. The Tribunal has, while doing so, relied upon a decision of a Division Bench of this court in CIT v. Ram C ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ur anxious considerations to the submissions made at the Bar and perused the orders under appeal. We have also been taken through the pronouncement of this court in Ram Commercial Enterprises Ltd.'s case [2000] 246 ITR 568 and Diwan Enterprises V. CIT [2000] 246 ITR 571 (Delhi). These two decisions have been followed by a number of later pronouncements of this court including those in CIT v. Khoday Eswarsa and Sons [1972] 83 ITR 369 (SC), Anantharam Veerasinghaiah and Co. v. CIT [1980] 123 ITR 457 (SC) and CIT v. J. K. Synthetics [1996] 219 ITR 267 (Delhi). From a conspectus of these decisions, it is evident that the following propositions of law relevant to levy of penalty under section 271(1)(c) of the Income-tax Act are f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... in Ram Commercial Enterprises Ltd.'s case [2000] 246 ITR 568 nor in any other subsequent decision rendered by this court, has this court examined whether the requirements of recording of satisfaction can be deemed to have been satisfied in cases where the authority initiating the proceedings has in the course of the order made by it recorded findings which would in themselves constitute not only proper application of mind but satisfaction of the authority that the assessee has either concealed his income or furnished inaccurate particulars of such income. Recording of satisfaction before initiating proceedings is in our opinion a requirement that ensures that penalty proceedings are not initiated as a matter of course and in a mechanic ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... y difference, if the satisfaction is otherwise discernible from the order. It follows that the order may have to be seen as a whole and so long as a proper reading of the order demonstrates application of mind by the authority and so long as satisfaction is discernible from the findings recorded by the authority initiating the proceedings, the same should suffice. In the light of the above, we admit these appeals for determination of the following substantial question of law: "Whether satisfaction of the officer initiating the proceedings under section 271 of the Income-tax Act can be said to have been recorded even in cases where satisfaction is not recorded in specific terms but is otherwise discernible from the order passed by the auth ..... X X X X Extracts X X X X X X X X Extracts X X X X
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