TaxTMI 
TaxTMI 
2025 (1) TMI 648
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....alty levied by the Addl.CIT u/s. 271D of the Income Tax Act, 1961 (hereinafter in short 'the Act'). The Revenue has assailed the impugned action of the Ld.CIT(A) deleting the penalty whereas the assessee by filing the Cross-Objection is supporting the action of the Ld.CIT(A) as well as has raised a legal issue in support of its ground against jurisdiction of Addl.CIT passing the penalty order. 2. Since the assessee has also raised legal issue against the penalty levied by the Addl.CIT, by preferring Cross-Objection, the same is admitted, we relying on the decision of the Hon'ble Supreme Court in the case of National Thermal Power Co. Ltd. v. CIT reported in (1998) 229 ITR 383; and proceeding further, we note that the legal issue raised b....
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....ked in its book as "credit in the advance from Director's account". And explained that as they were unable to collect VAT from buyers as it was unaccounted transactions, it avoided indirect taxation also on it, and also admitted its inability to produce any evidence of such amount and offered it as "advance from Director's account". However, according to the Addl.CIT, since the assessee company failed to produce any documentary evidence to consider Rs. 5.70 Crs. as "advance from the Director's account" and such a transaction violated sec.269SS of the Act, it attracted penalty u/s. 271D of the Act. Therefore, he issued notice u/s. 274 r.w.s.271D dated 16.01.2018 informing the assessee his desire to levy of penalty u/s. 271D of the Act. And a....
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....of the Act while framing the assessment order dated 27.12.2017. In order to support such a contention, he drew our attention to the assessment order passed by the AO u/s. 143(3) dated 27.12.2017, which is found placed at Page Nos.3-5 of the Paper Book, and brought to our notice that there is no satisfaction recorded by the AO about violation of sec.269SS of the Act [i.e. assessee receiving loan or deposit violating said section] which attract penalty u/s. 271D of the Act. In the absence of satisfaction recorded by the AO as to violation by assessee u/s. 269SS of the Act, the Ld.AR asserted that impugned penalty levied by the Addl.CIT is bad in law and in support of such a contention cited the decision of the Hon'ble Supreme Court in the cas....
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....of the Act. The Hon'ble High Court held that the provisions of secs 271D 271E are pari materia to each other and the decision of the Hon'ble Supreme Court in Jai Laxmi Rice Mills case is applicable to penalty u/s 271D also. The relevant portion of the decision of the Hon'ble High Court is extracted as under: 22. From an analysis of Sections 271D and 271E of the Act, it is seen that both the provisions are pari materia to each other. While Section 271D of the Act would be attracted on a person accepting loan or deposit or specified sum in contravention of Section 269SS of the Act, penalty under Section 271 E of the Act would be imposable on a person who makes or repays the loan or deposit or specified advance in contrave....
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....hat order the Assessing Officer wanted penalty proceeding to be initiated under Section 271(1)(c) of the Act. Thus, insofar as penalty under Section 271E is concerned, it was without any satisfaction and, therefore, no such penalty could be levied. 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 dec....
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....djudicating authority, be it an income tax authority or any other civil authority or for that matter any court in the country, to comply with the decision of the Supreme Court. 9. Following the Hon'ble Courts decisions (supra), this Tribunal in several cases [T Shiju v. JCIT in ITA No.2829/Chny/2018 dated07.06.2019] has held that recording of satisfaction by the AO in the assessment order regarding the violation of the provisions of section 269SS is a mandatory requirement for valid initiation of penalty proceedings us 271D of the Act and no penalty could be levied if the AO failed to record such satisfaction in the assessment order. In the present case, on perusal of the assessment order u/s 143(3) dated 27.12.2017, it is seen that no s....