TaxTMI 
TaxTMI 
2020 (10) TMI 619
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....e Act') for Assessment Year 2012-13. 2. When the matter was called out for hearing the Ld. AR for the assessee at the outset submitted that the controversy in the present case revolves around imposition of penalty of Rs. 9,79,104/- under Section 271E of the Act for alleged breach of provisions of Sec. 269T of the Act. Adverting to the facts, the Ld. AR for the assessee submitted that the assessment under Section 143(3) dated 20.02.2015 was carried out in the instant case without any additions. Thereafter impugned penalty orderunder Section 271E dated 29.10.2015 was passed by the competent authority namely Joint Commissioner of Income Tax (JCIT) whereby it is alleged that assessee has paid an aggregate sum of Rs. 8,77,252/- in contraventi....
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....and pointed out that the outstanding for these parties are being carried forward from the earlier years on account of purchase of tobacco products from the partnership firm in which these parties are having substantial interest. The Ld. AR submitted that part of the payment was made in the earlier years where as the remainder amount in question was paid in cash during the year. It was, thus, contended that the payment so made was on account of discharge of liabilities towards purchase in the earlier years which cannot be branded as loan and/or deposits contemplated under Section 269T of the Act. In a rejoinder to the argument on behalf of the Revenue, the Ld. AR mentioned that although the outstanding liability was shown under the 'head loa....
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.... the instant case, in the rank of ITO could not have formulated any 'satisfaction', even if, he so desired while framing the assessment order. Such order could have been contrary to the very scheme of the Act. The Ld. DR thereafter pointed out that, in any case, an 'Office Note' was prepared recommending the Joint Commissioner with a proposal to consider the imposition of penalty under Section 271E of the Act for alleged default as observed by him. Therefore, such 'Office Note' would prove that the satisfaction contemplated by the Hon'ble Supreme Court and the Co-ordinate Bench relied upon on behalf of the assessee was actually present in this case. It was thus, contended that legal objection raised by the assessee for penalty order under S....
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.... the person who is competent to impose penalty and not a lower ranking authority. The law provides for imposition of penalty by an officer of the rank of the Joint Commissioner. Thus, the AO is statutorily debarred for forming any 'satisfaction' either at the time of assessment order or subsequent thereto. The AO, however, has sent the Office Note to the competent authority for requisite action. Thus, the assent of mind of AO is discernible from such conduct. Hence, the ratio of decision of the Hon'ble Supreme Court would not apply to the facts of the case. Thus, we find considerable merit in all the plea raised on behalf of the Revenue in this regard as noted in paragraph 3 hereinabove. We, thus, see no merit in the legal objection raised ....