Recorded satisfaction requirement for section 271E penalty was missing, so the penalty was unsustainable.

Penalty under section 271E was found unsustainable where the assessment order under section 143(3) accepted the returned income but did not record any satisfaction that the assessee had violated section 269T or that penalty proceedings should be initiated. The absence of such recorded satisfaction meant the foundational requirement for commencing penalty action was missing, so the penalty was directed to be deleted.

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Issues: Whether penalty under section 271E could be sustained when the assessment order did not record satisfaction regarding violation of section 269T or initiation of penalty proceedings.

Analysis: The assessment order under section 143(3) accepted the returned income and contained no recorded satisfaction that the assessee had violated section 269T or that proceedings under section 271E were to be initiated. In the absence of such satisfaction in the assessment order, the foundation for penalty proceedings was missing.

Conclusion: The penalty proceedings under section 271E were held unsustainable in law and the penalty was directed to be deleted.

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