Cash loan penalty requires AO's satisfaction, mere referral insufficient.

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....The High Court held that for levying penalty u/s 271D for violation of Section 269SS, the Assessing Officer must record satisfaction that the provisions were violated. Mere referral by the Assessing Officer to the Joint Commissioner without recording such satisfaction is insufficient. The Court relied on the Supreme Court's decision in Jai Laxmi Rice Mills, setting aside the penalty order u/s 271D as the Assessing Officer did not record any finding of violation of Section 269SS during assessment proceedings. The Court drew a presumption that the department accepted the assessee's explanation denying cash loan, precluding levy of penalty.....