1975 (12) TMI 78

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..... l), Range-I, has stated as follows : " Whereas the Income-tax Officer, Central Circle-V, Calcutta, has under subsection (2) of section 274 of the Income-tax Act, 1961, referred your case to me in connection with the penalty proceedings under clause (c) of sub-section (1) of section 271 and whereas it appears to me that you have concealed the particulars of your income or, deliberately furnished inaccurate particulars of such income for the assessment year 1964-65. You are hereby requested to appear before me at 11.30 A.M. on February, 24, 1971, and show cause why an order imposing a penalty on you should not be made under section 271(1)(c) of the said Act. If you do not wish to avail yourself of this opportunity of being heard in pers .....

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..... formed that the case for levy of a penalty u/s (under clause (c) of sub-section (1) of section 271) is being referred by me to the Inspecting Assistant Commissioner of Income-tax, Range-I(c), Calcutta. Further proceedings in regard to the levy of a penalty will take place before the said Inspecting Assistant Commissioner of Income-tax as provided in sub-section (2) of section 274. It is manifest that the Income-tax Officer was satisfied during the course of the assessment proceeding about the need for imposition of penalty. The assessment order records that fact. What is required under the Act is satisfaction before the conclusion of the proceeding and not issue of any notice or initiation of any step for imposing penalty. Reliance in this .....

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..... have observed was that he was of the opinion that the matter should be referred to the Inspecting Assistant Commissioner of Income-tax as the minimum penalty imposable was likely to exceed Rs. 1,000. But the said inappropriate use of language does not, in my opinion, in the facts and circumstances of the case, invalidate the issue of the notice. The notice was issued subsequent to the making of the assessment by the transferee-Income-tax Officer, and such subsequent issue of the notice does not, in my opinion, indicate that the satisfaction was not during the course of the assessment proceeding. Reliance in this connection may also be made on the observations of the Supreme Court at page 561 of the report in the case of D. M. Manasvi v. Co .....

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