2026 (9) TMI 31

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....penalty orders passed u/s 271D of the Act both dated 19.12.2029 and 13.03.2020. 2. Heard both the parties and perused the materials available on record. It is observed that the Ld. CIT(A) has dismissed the appeal of the assessee for non-prosecution, however, the assessee has challenged the initiation of proceedings u/s 271D of the Act, therefore, this being a legal ground is taken up for hearing and decided first. 3. Before us, Ld.AR for the assessee submits that in the instant case no assessment proceedings u/s 143(3) were ever taken up and no assessment order was passed thus no satisfaction whatsoever was recorded by the AO for the initiation of the present penalty proceedings. The penalty proceedings were actually initiated by the ....

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.... was information available with the Assessing Officer that the assessee has violated the provisions of section 271D, therefore the AO has moved the proposal to Addl. CIT who had invoked the proceedings u/s 271D of the Act and thereafter passed the order and levied the penalty. It is therefore, submitted by ld. Sr. DR that proceedings have rightly been initiated u/s 271D of the Act and consequent penalty has rightly been imposed by JCIT which orders deserves to be upheld. 4. Heard both the parties at length and perused the materials available on record. From the perusal of the penalty order passed by the JCIT dated 19.12.2019, it is observed that there was no assessment order u/s 143(3) of the Act was ever passed in the instant case and o....

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....by the Tribunal. The Tribunal while deleting the penalty recorded that the return of the assessee was processed as on 31.12.2003 and the notice u/s 274 read with section 271E of the Act was issued on 12.06.2007. Such notice was issued when there was no proceedings pending before the Assessing Officer. Relying upon Delhi High Court judgment in Commissioner of income Tax v. Standard Brands Ltd. (2006) 285 ITR 295, the Tribunal further observed that action for penalty may be permissible only after regular assessment has been framed and since no regular assessment order had been passed in this case, the recourse to penalty proceedings under Section 271E were not justified. The findings recorded by the Tribunal read thus:- Havi....

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.... the default, if any, was of technical nature. The explanation being plausible one, it cannot be said that there was no reasonable cause within the meaning of Section 273B of the Act. No substantial question of law arises in this appeal." 5. Considering the facts in the instant case, no regular scrutiny assessment order was passed u/s 143(3) nor any reassessment proceeding u/s 147 of the Act was initiated, and when the notice u/s 271D was issued, no proceedings were pending before the AO. Therefore, penalty proceeding initiated by the JCIT u/s 271D of the Act is not justified, thus, by following the aforesaid judgments of the Hon'ble Punjab & Haryana High Court and Hon'ble Jurisdictional High Court, we hold that the penalty proceedings i....