Despite s. 271(1B), s. 271 (1)(c) penalty is not valid if AO’s satisfaction not recorded at stage of initiation

In Ram Commercial Enterprises 246 ITR 568 (Del) {affirmed in Rampur Engineering 309 ITR 143 (Del) (FB)}, the Delhi High Court held that if the AO did not record his satisfaction that the assessee had concealed particulars of his income before completion of the assessment proceedings, the initiation of penalty proceedings was bad in law and the order imposing penalty was invalid. To supersede this law, sub-sec (1B) was inserted in s. 271 by the Finance Act, 2008 with retrospective effect from 1.4.1998 to provide that if the assessment order contained a direction for initiation of penalty procee...