CWT vs Maruti Udyog Ltd.

The revenue is aggrieved by an other dated 4-5-2006 passed by the Income Tax Appellate Tribunal, Delhi Bench ''A'' in ITA No. 105/Delhi/2005 relevant for the assessment year 1998-99.

Relying upon a decision of this court in Commissioner of Income Tax Vs. Ram Commercial Enterprises Ltd., , the Tribunal struck down the penalty proceedings initiated against the assessee on the ground that there was no satisfaction of the assessing officer recorded holding that the penalty proceeding should be initiated against the assessee.

We find that the decision of this court in Ram Commercial Enterprises Ltd.''s case (supra) has been approved by the Supreme Court in Dilip N. Shroff Karta of N.D. Shroff Vs. Joint Commissioner of Income Tax, Special Range Mumbai and Another, and Sri T. Ashok Pai Vs. Commissioner of Income Tax, Bangalore, .

Learned Counsel for the revenue makes an alternative submission that the satisfaction of the assessing officer can be discerned from the assessment order. He submits that another Bench of this court has in CIT v. Indus Valley Promoters Ltd. (2006) 155 Taxman 223 (Del) referred the following substantial question of law to a Larger Bench which according to the referring Bench was not considered in Ram Commercial Enterprises Ltd.''s case (supra):

Whether satisfaction of the officer initiating the proceedings u/s 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 authority''?

He accordingly submits that this court should await the decision of the Larger Bench.

Assuming the revenue were to succeed before the Larger Bench, and the question referred to it is answered in the affirmative, it would mean that it is sufficient that the satisfaction of the assessing officer for initiating penalty proceedings against an assessee u/s 271(1)(c) (which corresponds to Section 18(1)(c) of the Wealth Tax Act, 1957 of the Act is discernible from the assessment order itself and that such satisfaction need not be separately or expressly indicated in the assessment order. In that event the assessment order in the present case would have to be examined to find out if the satisfaction of the assessing officer is discernible. Therefore, without expressing any view on the issue pending consideration by the Larger Bench, and presuming that the question referred to it is answered in the affirmative, we proceed to examine the assessment order in the instant case in order to find out whether the satisfaction of the assessing officer that penalty proceedings should be initiated against the assessee u/s 271(1)(c) (which corresponds to Section 18(1)(c) of the Wealth Tax Act, 1957) of the Act is discernible therefrom.

We have gone through the assessment order dated 30-3-2001 a copy of which has been placed before us by learned Counsel for the assessee. We cannot find any mention anywhere of any satisfaction being recorded by the assessing officer that penalty proceeding should be initiated against the assessee. All that is stated in the concluding paragraph of the assessment order is as follows:

Assessed u/s 16(3) of the Wealth Tax Act. Initiate penalty u/s 18(1)(c). Charge interest and issue necessary forms.

No substantial question of law arises. Dismissed.