TaxTMI 
TaxTMI 
2026 (8) TMI 755
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....dition of Rs. 86.50 lakhs towards undisclosed consideration with respect to property on the basis of certain papers found during the course of the said search. It was held that the assessee had received the amount of Rs. 86.50 lakhs in cash and thereby it was held that this was violative of the provision of Section 269SS of the Act. Thereafter, the Ld. AO imposed a penalty u/s 271D of the Act on the like amount. 1.2 The aggrieved assessee approached the Ld.CIT(A) where he could succeed on the basis of the finding that in the quantum matter the ITAT in the assessee's own case [ITA 5652/Del/2024, order dated 03.06.2025], had observed as under: - "5. We adopt the above extracted detailed discussion mutatis mutandis to conclude that....
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....itation for levying the impugned penalty deserved to be calculated form the date on which the Addl./JCIT had initiated the said proceedings. The Ld. DR drew our attention to CBDT Circular No.10/2016 dated 26.04.2016 and another Circular No.9/DV/2016 dated 26.04.2016 to canvass the point that the violation u/s 269SS of the Act was independent of the quantum matter. The Ld. DR also argued and pointed out that Section 275 would indicate that the penalty would be barred by limitation only from the date on which the Addl./JCIT had initiated the same. 2.1 Per contra, the Ld. AR relied on the findings given in the impugned order, from which, for the sake of convenience, the relevant portions deserve to be extracted as under: - "6.4 Thu....
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....is concerned, there was no satisfaction recorded regarding penalty proceeding under Section 271E of the Act, though in that 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." 6.5 Reading of the order passed by Hon'ble Supreme Court makes it clear that the recording of satisfaction of the AO regarding violation of statutory provision and consequent warrant of imposition of penalty is sine qua non for the validity of penalty order. In the present case, since the assessment order dated 01.03.2023 ....
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....before him. In the case of Pr. CIT vs. Rishikesh Buildcon (P) Ltd. reported as (2023) 451 ITR 108 (Delhi), it has been held by jurisdictional High Court that: "7. The relevant admitted facts for determining the controversy in the present appeals are: a. The quantum proceedings with respect to the three Assessee(s) were completed in December, 2008 and the penalty proceedings against the Assessee(s), inter alia under section 271D of the Act for violating the provision of Section 269SS of the Act, had been initiated by the AO at the time of the completion of the said assessment. b. The SCNs under section 271D of the Act were issued by prescribed authority on 24th March, 2009. c. The penalty order(s) were pas....
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....nciple was adopted by Hon'ble Delhi High Court in the case of Pr. CIT vs. Thapar Homes Ltd. reported as (2024) 159 taxmann.com 450 (Delhi). It is therefore, held that limitation for imposition of penalty cannot be reckoned from the date of issuance of penalty notice issued by the JCIT or Addl., CIT, as the case may be, but from the date of completion of assessment order where satisfaction for initiation of penalty is recorded by the AO. The Impugned order is thus held to be barred by limitation." 3. We have carefully considered the rival submissions and have gone through the records before us. It is now a settled position after the case of Jai Laxmi Rice Mills (supra) that a penalty u/s 271D of the Act cannot survive in case the quan....