Commissioner of Income Tax vs Ranjeet Singh Dhawan

The respondent is served by publication in the newspapers Statesman, Delhi edition on 27-8-2009. However, nobody appears on behalf of the respondent in spite of service. In these circumstances, we are constrained to hear this matter in absence of the respondent.

The respondent/assessee had declared unaccounted cash of Rs. 11,42,885 and undeclared jewellery of Rs. 25,57,115 under VDIS, 1997. However, the required tax was not paid by the assessee. In these circumstances, notice u/s 148 of the Income Tax Act was issued to the respondent, pursuant to which he filed the return declaring income at Rs. 37,500. On the basis of the discloser made by the assessee under VDIS, the Assessing Officer framed the assessment and made additions treating the said amount as his income u/s 69A of the Act. This order was confirmed by the CIT(A). The Assessing Officer simultaneously initiated penalty proceedings against the assessee u/s 271(1)(c) of the Act and imposed penalty of Rs. 4,44,159 vide order dated 7-3-2005. This order was confirmed by the CTI(A). However, the Income Tax Appellate Tribunal reversed the said order and deleted the penalty only on the ground that the Assessing Officer had failed to record satisfaction in the order of assessment regarding concealment before initiating penalty proceedings. In this behalf, the Tribunal relied upon the judgment of this Court in the case of Commissioner of Income Tax Vs. Ram Commercial Enterprises Ltd., .

It is not in dispute that there is an amendment to the aforesaid provision by the Finance Act, 2008 and this amendment is carried out retrospectively with effect from 1 -4-1989. It is argued by the learned Counsel for the revenue that in view of the aforesaid amendment, it is not necessary for the Assessing Officer to record satisfaction in the order of assessment regarding concealment before initiating penalty proceedings. We may also record that the validity of this amendment was challenged in WP(C) No. 5059/2008 (decided on 24-7-2009 by this Court) entitled Ms. Madhushree Gupta Vs. Union of India (UOI) and Another, .

In these circumstances, we set aside the order of the Tribunal and remand the case back to the Tribunal to decide the issue in the light of the aforesaid amendment as explained by this Court in Ms. Madhushree Gupta''s case (supra).