TaxTMI 
TaxTMI 
2026 (5) TMI 611
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....271D of the IT Act, as the AO in the assessment proceedings made the addition of Rs. 35,00,000/- u/s 69A of the IT Act, therefore, erred in confirming the order of the Addl.CIT levying penalty of Rs. 35,00,000/- u/s 271D of the IT Act. 2. The learned Commissioner erred in assuming that there is no reasonable cause in violation of provisions u/s 269SS, therefore, erred in confirming the order u/s 271D of the IT Act levying penalty of Rs. 35,00,000/-. 3. The learned Commissioner erred in confirming the order of 3 the Addl.CIT levying penalty of Rs. 35,00,000/- u/s 271D of the IT Act, in the facts and circumstances of the case. 4. The learned CIT ought to have appreciated that the learned Additional CIT levied penalty U/s 271D of the IT Act beyond the period provided in section 275 of the IT act, therefore, erred in levying penalty of Rs 35,00,000/- U/s 271D of the IT Act. 5. The learned CIT ought to have appreciated that receipt of Rs 35,00,000/- towards part of sale consideration of the property 5 sold is recorded in the sale deed, which is Registered before the Sub- Registrar Shamshabad therefore, erred in confirming the penalty levied U/s 271D o....
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....e sale consideration and registering the sale deed as per the market value. Thereafter, the purchasers of the property, viz., Sri Rachuri Venugopal and three others had approached her father and agreed to pay the entire sale consideration on sale of the property of Rs. 4.55 crores in official amount and to register the sale deed mentioning the entire amount of market value which was received in two parts, viz., (a) cheque: Rs. 3.15 crores; and (b) cash: Rs. 1.40 crores; (ii) that as the entire amount of sale consideration falling to the share of the assessee has been disclosed in the registered sale deed, which included the cash component of Rs. 35,00,000, the assessee ought not to be subjected to penalty for technical violation of the provisions of section 269SS of the Act; (iii) that the assessee could have accepted the amount as per the value of the stamp duty through cheque and not disclosed the amount received by her in cash, but being a sincere law abiding citizen she had insisted to receive the entire sale consideration officially and declare the same in the sale deed remaining under a bona fide belief that there was no violation of any provisions of the Income Tax Act, 1961....
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....06/2020, being the six months from the end of the month in which the penalty proceedings were initiated. Carrying his contention further, the Ld. AR submitted that as the penalty order under section 271D of the Act was passed on 29/03/2022, it was barred by limitation and thus liable to be quashed. 8. Per contra, Dr. Sachin Kumar, Learned Senior Departmental Representative (for short, "Ld. Sr-DR") vehemently objected to the contentions raised by the assessee's counsel. The Ld. Sr-DR submitted that as the Addl. DIT (Int. Taxation), Hyderabad had initiated the penalty proceedings vide the notice issued under section 274 r.w.s 271D of the Act, dated 22/09/2021; therefore, he remained well within his jurisdiction to impose the penalty under section 271D of the Act, latest by 31/03/2022. The Ld. Sr-DR submitted that the Addl. DIT (Int. Taxation), Hyderabad, had imposed the penalty under section 271D of the Act, vide his order dated 29/03/2022, which was well within the limitation prescribed by mandate of law. The Ld. Sr-DR to support his contention relied upon the order of the Hon'ble High Court of Kerala in Grihalakshmi Vision vs. Addl. CIT, ITA Nos. 83 & 86 of 2014, dated 07/08/201....
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....T (Int. Taxation), Hyderabad, under section 271D of the Act, dated 29/03/2022, was barred by limitation; the same cannot be sustained and is liable to be struck down. 10. We have thoughtfully considered the contentions advanced by the Learned Authorized Representatives of both parties in the backdrop of the material available on record. 11. Controversy involved in the present appeal lies in a narrow compass, i.e., as to whether the limitation for imposing the penalty under section 271D of the Act, in the present case, by the Addl. DIT (Int. Taxation), Hyderabad is to be reckoned from the date of reference by the AO in the course of the assessment proceedings, which had concluded vide the order passed under section 143(3) of the Act, dated 23/12/2019; or from the date of the notice issued by the Addl. DIT (Int. Taxation), Hyderabad, under section 274 r.w.s 271D of the Act, dated 22/09/2022. 12. Before proceeding further, we deem it apposite to cull out section 275(1) of the Act (as was then available on the statute), which reads, as under: (a) "in a case where the relevant assessment or other order is the subject-matter of an appeal to the Joint Commissioner (Appea....
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....e issue for which our indulgence has been sought by both the parties, i.e., as to whether the date of initiation of penalty proceedings for the purpose of section 275(1)(c) of the Act is to be reckoned from the date on which the reference is made by the AO to the Addl. DIT (Int. Taxation), Hyderabad, i.e., 23/12/2019 - the date of assessment order being taken as the outer limit; or the date when the notice under section 274 of the Act was issued by the Addl. DIT (Int. Taxation), Hyderabad, to the assessee, i.e., 22/09/2021. We find that the Hon'ble High Court of Kerala in Grihalakshmi Vision vs. Addl. CIT (2015) 379 ITR 100 (Kerala) has held that the date of initiation of penalty is the date on which the notice is issued by the JCIT. However, we find that the Hon'ble High Court of Karnataka in PCIT vs. K. Umesh Shetty (2025) 479 ITR 270 (Karnataka), vide its subsequent order dated 17/01/2025, had, after considering the judgment of the Hon'ble High Court of Kerala in the case of Grihalakshmi Vision vs. Addl. CIT (supra) had held that the reference made by the AO to the Addl. CIT is the date of initiation of penalty for the purpose of section 275(1)(c) of the Act. In our view, the de....