SUNA NATH,KORAPUT vs. ITO, JEYPORRE, JEYPORE
What did the Tribunal hold?
The Tribunal held that the Assessing Officer failed to record his satisfaction regarding concealment of income or furnishing of inaccurate particulars before initiating penalty proceedings. This was considered a jurisdictional defect.
What were the facts?
The Assessing Officer initiated penalty proceedings under Section 271(1)(c) for unexplained investment and agricultural income. The assessee's appeal challenged the CIT(A)'s confirmation of the penalty.
What were the issues?
Whether penalty proceedings under Section 271(1)(c) are valid if the Assessing Officer fails to record satisfaction in the assessment order. The validity of penalty initiation without proper satisfaction recorded by the AO.
Which sections of the Income-tax Act were involved?
AI-generated summary — verify with the full judgment below
Cases cited in this judgment(1)Show listHide list
Detected automatically from the text. The count shows how many other judgments on BharatTax rely on the same authority.
- 300 ITR 407 citing300 ITR 40 · 2008 · HC
Income Tax Appellate Tribunal, CUTTACK BENCH, CUTTACK
Before: SHRI CHANDRA MOHAN GARG
This is an appeal filed by the assessee against the order of the Commissioner
of Income Tax(Appeals)-1, Bhubaneswar dated 25.1.2019 for the assessment year
2009-10.
The only issue raised in this appeal is against the order of the CIT(A)
confirming levy of penalty of Rs.54,100/- under section.271(1)(c) of the Act by the
Assessing Officer in respect to addition of unexplained investment in Firm and on the
addition of agricultural income as income from other sources.
ITA No. 96/ CTK/2019 Asse ssment Year: 20 09- 10
At the outset, ld Counsel for the assessee first of all took me to the
assessment order and stated that the initiation of penalty proceedings by the
Assessing Officer was for furnishing of inaccurate particulars of income and also for
concealment of particulars of income. Ld Counsel referred to the followings as noted
by the Assessing Officer in the assessment order:
“Initiated Penalty proceedings under section.271(1)(c) of the I.T.Act 1961
separately”
Ld Counsel took me through the penalty order dated 28.11.2017 under
section.271(1)(c) read with section. 274 of the Act, wherein, the Assessing Officer
has not recorded his satisfaction. Therefore, the penalty proceedings is without
jurisdiction. Ld counsel for the assessee relied on the decision of Hon’ble A.P.High
Court in the case of V.V.Projects and Investments Pvt Ltd., 300 ITR 40(AP).
When these facts were pointed out by this Bench to ld Departmental
Representative, he only relied on the assessment order, penalty order and the order
of the CIT(A).
I have heard the rival contentions and gone through the facts and
circumstances of the case. Admittedly, as noticed from the assessment order, I find
that no such satisfaction as contemplated u/s.271(1)(c) have been recorded by the
Assessing Officer while completing the assessment that in which limbs, the issue is
following. The Assessing Officer has simply mentioned that “penalty proceedings
u/s.271(1)(c) are initiated separately”. I find that Hon’ble A.P. High Court in the
case of V.V.Projects and Investments Pvt Ltd (supra) has held as under:
ITA No. 96/ CTK/2019 Asse ssment Year: 20 09- 10
“ The Assessing Officer has to form his own opinion and record his satisfaction of concealment of income or furnishing of inaccurate particulars of income before initiating penalty proceedings u/s.271(1)(c) of the I.T.Act, 1961. It is also clear that such satisfaction of the AO must be spelt out in the order of assessment itself and cannot be assumed from the issue of a notice u/s.271(1)(c) of the Act. Failure to record such satisfaction amounts to a jurisdictional defect which cannot be cured. It is also relevant to note that whether the assessee has concealed his income or has deliberately furnished inaccurate particulars thereof is essentially a finding of fact which has to be spelt out by way of recording the satisfaction of the AO as required u/s.271(1)(c) of the Act. Therefore, in the absence of such a finding in the assessment order no penalty proceedings can be initiated.”
Respectfully following the decision of Hon’ble A.P. High Court in the case of V.V.
Project and Investments P Ltd (supra) , I delete the penalty of Rs.54,100/- levied
by the Assessing Officer under section.271(1)(c) of the Act and allow the appeal of
the assessee.
In the result, the appeal of the assessee is allowed.
Order pronounced on 05/04/2019. Sd/- (Chandra Mohan Garg) JUDICIALMEMBER Cuttack; Dated 05 /04/209 B.K.Parida, SPS Copy of the Order forwarded to : 1. The Appellant :
The Respondent. 3. The CIT(A)- 4. Pr.CIT- Cuttack 5. DR, ITAT, Cuttack 6. Guard file. //True Copy// By order
Sr. Pvt. Secretary, ITAT, Cuttack
More judgments on Section 271(1)(c)
- Ajaybhai Dineshbhai Bagdai, Near Central… vs The Income Tax Officer, Ward-1(2)(1), New…ITA 74/RJT/2026[2013-14]Status: Disposed19 Oct 2026AY 2013-14
- Shalin Jayantbhai Desai, Vadodara vs ACIT, Circle-4(2), Vadodara Present…ITA 2569/AHD/2026[2010-11]Status: Disposed19 Oct 2026AY 2010-11
- Neo Structo Construction P. Ltd., Ahmedabad vs The Pr. CIT- 3, AhmedabadITA 1216/AHD/2026[2015-2016]Status: Disposed16 Oct 2026AY 2015-2016
- Hetal Vinodchandra Sheth, Ahmedabad vs The ITO, Ward-5(3)(1), AhmedabadITA 2370/AHD/2025[2014-15]Status: Disposed16 Oct 2026AY 2014-15
- Hetal Vinodchandra Sheth, Ahmedabad vs The ITO, Ward-5(3)(1), AhmedabadITA 2369/AHD/2025[2014-15]Status: Disposed16 Oct 2026AY 2014-15
Recent GST High Court judgments
Search GST case law →- Saraswati Phukan vs. The Union Of INDIA And 4 OrsGauhati · 14 Oct 2026
- Sanjay Maheshwari vs. Union Of INDIA & Ors.Delhi · 14 Oct 2026
- Sanjay Maheshwari vs. Union Of INDIA & Ors.Delhi · 14 Oct 2026
- Iyyanan Eswaran vs. The Appellate Deputy Commissioner (St) (GST)Madras · 14 Oct 2026
- M/S Dc Security Services vs. Commissioner Of Central Goods And Services TaxUttarakhand · 14 Oct 2026