ITAT allowed the appeal and set aside the penalty proceedings...

ITAT allowed the appeal and set aside the penalty proceedings under s.271D. The Tribunal held that valid initiation of penalty under s.271D requires the Assessing Officer to record a satisfaction in the assessment order that a transaction contravenes s.269SS; such satisfaction is mandatory. In the present assessment under s.153C, the AO did not record any satisfaction regarding contravention of s.269SS. Consequently, the penalty proceedings were held invalid for lack of statutory satisfaction, and the levy of penalty under s.271D could not be sustained against the assessee.