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2021 (9) TMI 1535 - AT - Income TaxPenalty u/s 271D - allegation of non recording of satisfaction by AO before initiation of any penalty - HELD THAT - As perused the assessment order passed by the AO the assessment order is conspicuously silent on recording of any satisfaction by the assessing officer for the purpose of initiative the penalty u/s 271D. In our considered opinion the recording of satisfaction by the AO is essential for initiation of any penalty u/s 271D of the act and failure to record, the satisfaction in the manner provided by the law and more particularly in the light of the judgement, is fatal, and accordingly the penalty proceedings initiated against the assessee by the assessing officer and confirmed by the CIT(A) are required to be quashed - Appeal of assessee allowed.
Issues involved:
1. Appeal against penalty order under section 271D of the Income Tax Act. Analysis: 1. The appellant challenged the penalty order confirmed by the CIT(A) based on the grounds mentioned in the appeal memo. The assessing officer did not record the satisfaction required for initiating the penalty under section 271D, as pointed out by the Ld.AR. Citing a Supreme Court decision, it was argued that without such recorded satisfaction, penalty proceedings would not be valid. 2. The CIT(A) upheld the order of the assessing officer, leading to the appellant's appeal before the ITAT. The Ld. AR reiterated the absence of recorded satisfaction in the assessment order as the basis for quashing the penalty proceedings. 3. The ITAT considered the arguments from both parties and reviewed the assessment order, noting the lack of recorded satisfaction by the assessing officer for initiating the penalty under section 271D. Emphasizing the importance of this recording as per the law and relevant judgments, the ITAT deemed the absence of satisfaction as fatal to the penalty proceedings. Consequently, the penalty initiated by the assessing officer and confirmed by the CIT(A) was ordered to be quashed, thereby allowing the appellant's appeal. 4. The decision was pronounced in open court on 24/09/2021 by the ITAT, thereby concluding the matter in favor of the appellant.
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