TIOL-DDT 1008 · Wednesday, 10 December 2008 · story 7 of 7

I am Satisfied - penalty under Income Tax Act

Power to impose penalty under Section 271 of the Act depends upon the satisfaction of the Income Tax Officer in the course of the proceedings under the Act. It cannot be exercised if he is not satisfied and has not recorded his satisfaction; mere absence of the words 'I am satisfied' may not be fatal but such a satisfaction must be spelt out from the order of the Assessing Authority as to the concealment of income or deliberately furnishing inaccurate particulars.

See Breaking News for this satisfying case, which is now of only academic interest.