IN THE HIGH COURT OF HIMACHAL PRADESH, SHIMLA Income-tax Appeal Nos. 60 of 2007 and 61 of 2007 Date of decision: 14.12.2009 (In both the appeals) Sham Sunder Aggarwal …Appellant. Versus The Commissioner of Income-tax, Solan. …Respondent. Coram The Hon’ble Mr.Justice Deepak Gupta, J. The Hon’ble Mr. Justice V.K.Ahuja, J. Whether approved for reporting? No. In both the appeals. For the appellant: Mr. Rajesh Garg and Mr. Dushyant Dadwal, Advocates. For the respondent: Ms. Vandana Kuthiala, Advocate. Per Deepak Gupta, J. Both these appeals have been admitted on the following identical question of law:- “Whether the Income-tax Appellate Tribunal was justified in holding that recording of satisfaction to initiate penalty proceedings is not mandatory if it can be inferred from the assessment order?” Section 271 (1B) has been inserted in the Income-tax Act, 1961 (here-in-after referred to as the Act) by the Finance Act of 2008. This provision has been given retrospective effect from 1.4.1989. It reads as follows:- “(1B) Where any amount is added or disallowed in computing the total income or loss of an assessee in any order of assessment or re-assessment and the said order contains a direction for initiation of penalty proceedings under clause (c) of sub-section 2 (1), such an order of assessment or reassessment shall be deemed to constitute satisfaction of the Assessing Officer for initiation of the penalty proceedings under clause (c) of sub- section (1).” A bare perusal of this provision which has been inserted now but w.e.f. 1.4.1989 clearly shows that the legislature has taken a decision that when the direction for initiation of penalty proceedings is contained in the order of assessment or re- assessment, that by itself, shall be deemed to constitute satisfaction of the Assessing Officer for initiation of penalty proceedings under Section 271 (1) (c) of the Act. It is not disputed before us that this amendment applies to both the cases. In view of the amendment made to the statute the question has to be answered in favour of the revenue and against the assessee. The appeals are accordingly dismissed. ( Deepak Gupta ), J. 14th December 2009 ( V.K.Ahuja ), J. ™