TaxTMI 
TaxTMI 
2026 (7) TMI 893
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....e are that a search & seizure operation was carried out u/s 132 at the business/residential premises of the assessee on 24.11.2021. thereafter, the assessment u/s 143(3) of the Act was completed vide order dated 20.01.2023 for the impugned assessment year wherein the assessee has admitted that the cash found during the course of search of INR 16,50,000/- represents the cash received from the sale of two properties situated at Plot No.171, Block-D, Sector-122, Noida and Flat No. T4/1104, 11th Floor, Tower-4, Sunworld Vanalika, Plot No. GH-01B, Sector-107, Noida which was over and above the sale consideration declared in the Sale Deeds and therefore, the said amount was offered for tax as part of sale consideration and due taxes were paid. Share of the assessee in the properties sold was 50%, therefore Rs. 8,25,000/- was offered by assessee and remaining 50% was offered by his wife Smt. Sumitra Malik, the other appellant before us. The AO in the assessment order has initiated the penalty proceedings u/s 271DA of the Act in terms of para 7 wherein the AO has made following observations:- 7. "Further, it is clear that the assessee has violated the provisions of section 269ST o....
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....rded satisfaction for initiation of penalty u/s271DA for violation of Section 269ST, which proceedings were dropped by JCIT. (ii) That the JCIT, suo moto, initiated and issued show cause Notice dated 27.03.2024 to levy penalty u/s 271D for violation of u/s269SS, even though no satisfaction was recorded by AO during assessment proceedings and accordingly initiation / issue of Notice and consequent levy of penalty is bad in law. (iii) That JCIT while issuing Notice u/s 271D, without appropriate satisfaction by AO : imposing penalty thereof, has erroneously sought to justify her actions by relying on Section 292B of the Act, which is wholly misplaced, as issues of jurisdiction are incurable and not applicable for the present proceedings. Ground No. 3. That, without prejudice to the above grounds, the CIT(A) erred in law and on facts in confirming the impugned penalty order which is barred by limitation in terms of Section 275(1)(c), for the reason that period commences from date of initiation of penalty by AO and not by JCIT, as held by various decisions of the jurisdictional High Court & Supreme court. Ground No. 4. The appellant craves the right to add, amend O....
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....on 31.07.2023. 8.1 Ld.AR alternatively submits that in the instant case, satisfaction for initiation of penalty proceedings u/s 271DA was recorded by the AO which was dropped by Ld. JCIT in terms of the order dated 27.03.2024 and thereafter, fresh proceedings were initiated for levy of penalty u/s 271D of the Act for violation of provision of section 269SS of the Act. It was submitted by ld. AR that no satisfaction was recorded by the AO during the pendency of assessment proceedings therefore, initiation of penalty proceedings u/s 271D of the Act by Ld. JCIT is contrary to the provisions of the Act and thus bad in law and accordingly, the consequent order passed deserves to be held as invalid and be quashed. For this, Ld.AR placed reliance on the judgement of Hon'ble Supreme Court in the case of JCIT vs Grandhi Sri Venkata Amarendra reported in [2026] 183 taxmann.com 545 (SC) wherein Hon'ble Supreme Court has confirmed the order of Hon'ble Andhra Pradesh High Court in [2026] 183 taxmann.com 323. Further reliance was placed on the judgement of Hon'ble Gujarat High Court in the case of PCIT vs Parivar Television (P.) Ltd. reported in [2025] 180 taxmann.com 109 and Hon'ble Rajastha....
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....occasion to Joint Commissioner to exercise his jurisdiction to levy penalty under section 271D - Whether there was gross delay of 350 days in filing SLP which had not been satisfactorily explained, even otherwise, court found no good reason to interfere with impugned order passed by High Court and, thus, SLP was to be dismissed - Held, yes [Paras 1 to 3] [In favour of assessee]." 11. Here it is important to note that no satisfaction was recorded by the AO for initiation of penalty proceedings u/s 271D of the Act which is a primary condition. The Hon'ble Supreme Court in the case of JCIT vs Grandhi Sri Venkata Amarendra (supra) has held as under:- 12. Similar view was expressed by Hon'ble Supreme Court in the case of CIT vs Jai Laxmi Rice Mills Ambala City reported in [2015] 64 taxmann.com 75 wherein Hon'ble Supreme Cout has observed as under:- 1. "In these appeals, we are concerned with the question as to whether penalty proceeding under Section 271D of the Income Tax Act (hereinafter referred to as "the Act") is independent of the assessment proceeding and this question arises for consideration in respect of Assessment Years 1991-1992 and 1992- 1993 under the follow....
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....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." 13. By following the aforesaid judgments of the Hon'ble Supreme Court in the case of Jai Laxmi Rice Mills Ambala City (supra), the Hon'ble Gujarat High Court in the case of Pariwar Television Ltd. (supra) has held the penalty proceedings initiated u/s 271D without any satisfaction recorded by the AO as invalid. Similar view is expressed by the Hon'ble Rajasthan High Court in the case of Sunil Agarwal (supra). Thus, by respectfully following the aforesaid judgements of Hon'ble Supreme Court, of various Hon'ble High Courts, we are of the considered view that the penalty proceedings initiated u/s 271D for violation of provision of section 269SS of the Act by JCIT, Central Range-5, Delhi is without jurisdiction as no satisfaction was recorded by the AO during the pendency of assessment proceedings and therefore, the penalty so levied u/s 271D of the Act without recording satisfaction by the AO which is sine qua non compulsory therefore, the penalty levied u/s 271D is hereby, delete....