Recorded satisfaction is essential for section 271D penalty; absence of it makes the penalty unsustainable.

Penalty under section 271D for alleged contravention of section 269SS requires jurisdictional satisfaction recorded by the Assessing Officer in the assessment order. Where the assessment order contains no such satisfaction, the penalty proceedings cannot be sustained. The same jurisdictional principle applied to the related penalty framework under sections 271D and 271E. On these facts, the penalty was liable to be deleted for want of recorded satisfaction.

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Issues: Whether penalty under section 271D of the Income-tax Act, 1961 could be sustained when the assessment order did not record satisfaction for initiating penalty proceedings for alleged contravention of section 269SS of the Income-tax Act, 1961.

Analysis: Penalty under section 271D is attracted only where there is a contravention of section 269SS and the jurisdiction to initiate such penalty must rest on satisfaction recorded by the Assessing Officer in the assessment order. The assessment order in the present case contained no such satisfaction. The legal position was treated as settled by the binding principle that penalty proceedings of this nature cannot survive without the requisite jurisdictional satisfaction, and the allied reasoning applied to penalties under sections 271D and 271E was treated as equally applicable.

Conclusion: The penalty under section 271D could not be sustained for want of recorded satisfaction in the assessment order and was liable to be deleted.

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