Whether AO is entitled to levy penalty under section. 271(1)(c)/ 271(1B) on issues other than the specific issues mentioned in assessment order?

Last updated: 16 June 2014

Court :
Allahabad High Court

Brief :
The following questions of law have been raised by the Revenue in the appeal.(i) Whether the ITAT erred in law in interpreting the language and provisions of Section 271(1)(c) which only talks of initiation of penalty in “course of any proceedings” and there is no condition in the language of the Section which calls for recording of satisfaction before initiation of u/s 271(1)(c). (ii) Whether the ITAT erred in law in not considering the provisions of Explanation 7 (1B) to section 271 which clearly indicates that where any order of assessment contains a direction for initiation of penalty under clause (c) of sub-section (1), such an order shall be deemed to constitute satisfaction of the A.O for initiation of penalty proceedings. (iii) Whether the ITAT erred in law by interpreting new conditions in the language and provision of section 271(1)(c) which was not originally intended by the legislature and would amount to “casus omissus”.

Citation :
Commissioner Of Income Tax – Appellant – Versus - M/S Triveni Engineering & Industries Ltd. – Respondent