IN THE HIGH COURT OF PUNJAB AND HARYANA AT CHANDIGARH. C.M. No.2264-CII of 2011 in/and I.T.A. No.388 of 2004 Date of decision: 9.2.2011 The Commissioner of Income Tax. -----Appellant. Vs. M/s Durga Traders. -----Respondent CORAM:- HON'BLE MR. JUSTICE ADARSH KUMAR GOEL HON'BLE MR. JUSTICE AJAY KUMAR MITTAL Present:- Mr. Yogesh Putney, Sr. Standing Counsel for the appellant. Mr. Avneesh Jhingan, Advocate for the respondent. --- ADARSH KUMAR GOEL, J. On joint request, hearing is preponed for today. Heard on merits. This appeal has been preferred by the revenue under Section 260-A of the Income Tax Act, 1961 (for short, “the Act”) against the order of the Income Tax Appellate Tribunal, Chandigarh in I.T.A. No.120/Chandi/2003 for the assessment year 1991-92 proposing to raise following substantial questions of law:- “Whether on the facts and in the circumstances of the case, the ITAT was right in cancelling the penalty levied under Section 271(1)(c) by applying the ratio in the case of Munish Iron Store, 263 ITR 484, when there existed satisfaction of the Assessing Officer with regard to the concealment of income on account of I.T.A. No.388 of 2004 under valuation of closing stock of the rice in the assessment order itself when he initiated penalty proceedings u/s 271(1)(c).” It is not disputed that the matter is covered by order of this Court in CIT v. Pearey Lal and Sons (EP) Ltd. [2009] 308 ITR 438, wherein it was held that a formal order of satisfaction was not required to be recorded, as held by the Tribunal in the impugned order. Accordingly, we set aside the impugned order of the Tribunal and remand the matter to it for a fresh decision on merits in accordance with law. Parties may appear before the Tribunal for further proceedings on 18.4.2011. (ADARSH KUMAR GOEL) JUDGE February 09, 2011 ( AJAY KUMAR MITTAL ) ashwani JUDGE 2