TaxTMI 
TaxTMI 
2024 (1) TMI 25
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....section 271D of the Act. 3. In appeal, learned CIT(A) confirmed the penalty, observing that since the assessee violated the provisions of section 269SS of the Act, and received the specified sum exceeding to Rs. 20,000/- otherwise than account payee cheque or bank draft in cash, learned Assessing Officer was justified in imposing penalty at Rs. 31,22,000/- under section 271D of the Act and penalty levied by the learned Assessing Officer was to be confirmed. Accordingly, the order levying penalty under section 271D of the Act was confirmed. Consequently, learned CIT(A) dismissed the appeal. 4. Assessee filed the present appeal and contended that the impugned order is erroneous and bad in law inasmuch as the penalty under section 271D of the Act was levied and sustained without satisfaction being recorded in the assessment order. Learned AR relied upon the decisions in the cases of CIT vs. Jai Laxmi Rice Mills 379 ITR 521, Mohd. Atiq vs. ITO 46 ITR 452, ITO vs. Bisheshwar Lal 76 ITR 653, CIT vs. Padampat Singhania (HUF) 280 ITR 14, Vijayaben G. Zalavadia vs. JCIT in ITA Nos.458 to 463/Ahd/2020 and Srinivasa Reddy Reddeppagari vs. JCIT in W.P.No.44285 of 2022, dated 26/12/2022. ....
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....the sake of completeness, I deem it just and necessary to extract hereunder the relevant observations and findings of the Hon'ble High Court,- "14. Issue raised in the writ petition is whether without satisfaction being recorded in the assessment order, penalty can be levied by the Joint Commissioner under Section 271D of the Act ? 15. Insofar the present case is concerned, we find that in the assessment order dated 24.03.2022 passed under Section 153A of the Act, return of income filed by the petitioner was accepted by the assessing officer and accordingly, the total income was assessed. In the return of income, petitioner had admitted receiving total income of Rs. 80,84,180.00 which was also accepted by the assessing officer. 16. Subsequently, respondent No.1 took the view that petitioner had sold immovable properties for a total sale consideration of Rs. 92,13,000.00 out of which he had accepted cash to the tune of Rs. 87,80,000.00 which was in violation of Section 269SS of the Act, attracting penalty under Section 271D of the Act. 17. Before we advert to the reply submitted by the petitioner, we may mention that under Section 269SS of the....
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....wn in the name of the person who had made the loan or deposit or who had paid the specified advance or by use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed, if such an amount is twenty thousand rupees or more. As in the case of Section 269SS, Section 269T of the Act also does not apply to the Government, banking company, post office savings bank etc. Section 271E of the Act reads as under: Penalty for failure to comply with the provisions of section 269T. 271E. [(1)] If a person repays any [loan or] deposit [or specified advance] referred to in section 269T otherwise than in accordance with the provisions of that section, he shall be liable to pay, by way of penalty, a sum equal to the amount of the [loan or] deposit [or specified advance] so repaid.] [(2) Any penalty imposable under sub-section (1) shall be imposed by the [Joint] Commissioner.] 21. Thus, sub-section (1) of Section 271E of the Act provides that if a person repays any loan or deposit or specified advance referred to in Section 269T of the Act otherwise than in accordance with the provisions of that section, he shall be liabl....
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....d. These appeals are, accordingly, dismissed. 24. Reverting back to the facts of the present case, we find that petitioner had submitted reply to the show cause notice on 02.06.2022. In his reply, petitioner mentioned that no satisfaction was recorded by the assessing officer in the assessment order as to infraction of Section 269SS of the Act. Therefore, no penalty could be levied under Section 271D of the Act without recorded satisfaction. In this connection, reference was made to the decision of the Supreme Court in Jai Laxmi Rice Mills Ambala City (1 supra) wherein it was clarified that provisions of Section 271E are in pari materia with the provisions of Section 271D of the Act. However, this aspect of the matter was not considered by respondent No.1 while passing the impugned order. Respondent No.1 relying upon the Kerala High Court decision in Grihalaxmi Vision (2 supra) noted that competent authority to levy penalty is the Joint Commissioner. He has also referred to an earlier decision of the Supreme Court in CIT V. Mac Data Ltd.3 wherein it was observed that assessing officer has to satisfy himself as to whether penalty proceedings should be initiated or not. Asse....