TaxTMI 
TaxTMI 
2025 (4) TMI 2181
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....the legal position. 4. The Pr.CIT, (Central), Hyderabad, erred in giving directions to the A.O, asking him to record satisfaction, for non-compliance under the provisions of u/s.269SS/269ST of the Act. 5. The order of the Pr.CIT, (Central), Hyderabad, dated. 13.02.2024, holding that the approval passed u/s.153D by the Addl Commissioner, Central, Hyderabad, is contrary to the legal position, as the approval of the Addl. Commissioner is not the subject matter of the assessment order. 6. The Pr.CIT, (Central), Hyderabad, erred in giving directions to the Additional CIT, Central, Hyderabad for recording of satisfaction in non-compliance under the provisions of u/s.269SS / 269ST of the Act, as the same not the subject matter in the assessment order. 7. Any other grounds which the Assessee may urge either before or at the time of the hearing." 3. The brief facts of the case are that, the assessee is an individual, filed her Return of Income ("ROI") for A.Y. 2020-21 on 17.10.2016 declaring total income at Rs. 13,33,840/-. A search and seizure operation u/s.132 of the Act was conducted in the case of M/s. Suresh Productions group on 27.11.2019, wherei....
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....Jurisdictional High Court in the case of Srinivasa Reddy Reddeppagari Vs JCIT, Central Range-2, Hyderabad in Writ Petition W.P.No.44285 of 2022. 3.1 Hence, the Ld. PCIT found that, the order passed by the Ld. AO was erroneous in so far as the same is prejudicial to the interest of the revenue. Accordingly, the Ld. PCIT treated the order passed by the Ld. AO and the approval granted by Addl. CIT, as erroneous and prejudicial to the interest of the revenue, and issued show cause notice u/s.263 of the Act on 28.12.2023 to the assessee. After considering the submission of the assessee the Ld. PCIT passed order u/s.263 of the Act on 13/02/2024 setting aside the order of Ld. AO and order of approval of Ld. Addl. CIT with a direction to the Ld. AO to record the satisfaction and to take consequential action. 4. Aggrieved with the order of Ld. PCIT, the assessee is in appeal before us. The Learned Authorised Representative ("Ld. AR") relying on the decision of co-ordinate bench of ITAT in the case of Sri Adithya Homes Pvt. Ltd. Vs. ACIT in ITA No.230 & 231/Hyd/2023 dated 21.07.2023, submitted that, instead of issuing direction to the Ld. AO to record the satisfaction, the Ld. PCIT him....
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....the Ld. DR prayed before the bench to uphold the order of Ld. PCIT. 6. We have heard the rival contentions and also gone through the record in the light of the submissions made by either side. In the present case, the Ld. AO has made an addition of Rs. 9 Crores on account of on money received by the assessee over and above the amount recorded in books of account of the assessee on account of sale of property. The Ld. AO did not record any satisfaction in his order for levy of penalty u/s271D of the Act on account of contravention of provisions of section 269SS of the Act. Consequently, the Ld. PCIT exercised his jurisdiction u/s.263 of the Act and directed the Ld. AO to record his satisfaction for initiation of penalty u/s.271D of the Act. The first argument of the assessee before us is that, the Ld. PCIT has no power u/s.263 of the Act to issue direction to Ld. AO to record satisfaction. The Ld. AR argued that, the Ld. PCIT himself should have record satisfaction and initiate the penalty proceedings. In support of their submission, the Ld. AR relied on the decision of co-ordinate bench of ITAT in the case of Sri Adithya Homes Pvt. Ltd. Vs. ACIT (supra), the relevant portion of ....
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....R is that, if the alleged amount has been treated as income in the hands of the assessee, then, the same loses the character of loan / deposit and hence the provision of section 269SS of the Act are not applicable to the assessee and accordingly, there cannot be any levy of penalty u/s. 271D of the Act in the hands of the assessee. In their alternate submission, the Ld. AR submitted that, the power of levy of penalty u/s.271D of the Act lies on the Learned Joint Commissioner of Income Tax ("Ld. JCIT") and it is the Ld. JCIT who has to record satisfaction. There is no occasion of any satisfaction to be recorded by the Ld. AO. Hence, the allegation of the Ld. PCIT for invocation of section 263 that no satisfaction has been recorded by the Ld. AO is not sustainable and the order passed by the Ld. PCIT is liable to be quashed. 6.3 As far as the contention of Ld. AR that, if the alleged amount is added as income, it loses the character of loan / deposit, the Ld. DR brought to our notice to the provisions contained in section 269SS of the Act, which is to the following effect : " 269SS. [Mode of taking or accepting certain loans, deposits and specified sum. [Substituted by Fi....
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....ng Regulation Act, 1949, (10 of 1949); (iii) "loan or deposit" means loan or deposit of money; (iv) "specified sum" means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place.]" 6.4 On perusal of the provisions of section 269SS of the Act, we found that, section 269SS covered "specified sum" apart from loan and deposit and the case of the assessee is covered under "specified sum" which is defined under Explanation (iv) to section 269SS of the Act. Hence, the contention of the Ld. AR that if the alleged amount is taken as income, it loses the character of loan / deposit and no penalty can be levied u/s.271D of the Act, is not accepted, because the alleged addition in the case of the assessee does not fall under loan / deposit, it fall under the category of "specified sum". Further, nowhere under section 269SS of the Act, it has been mentioned that, if the alleged amount is added as income, the same will be treated out of the purview of section 269SS of the Act. Hence, we do not find any merit in the contention of the assessee and accordingly, reject this contention....