9911796707
TMI Blog2025 (1) TMI 612X X X X Extracts X X X X X X X X Extracts X X X X ..... In the present case, on perusal of the assessment order u/s 143(3) dated 31.10.2019, it is seen that no such satisfaction has been recorded by the AO in the said assessment order. Hence, having regard to the failure of the AO to record his satisfaction in the assessment order with regard to the violation of the provisions of Sec. 269SS, it is held that the penalty proceedings u/s. 271D of the Act have not been validly initiated and consequently, the penalty order passed by the Addl. CIT is held to be bad in Law. Assessee appeal allowed. - Shri ABY T. Varkey, Judicial Member And Shri S.R.Raghunatha, Accountant Member For the Appellant : Mr. R. Viswanathan, FCA For the Respondent : Ms. R. Anita, Addl.CIT ORDER PER ABY T. VARKEY, JM: This is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Act. Thereafter, penalty proceedings u/s.271D of the Act was initiated by the Addl.CIT and show cause notice was issued u/s.271D r.w.s.274 of the Act dated 24.02.2021 for violation of sec.269SS of the Act. In the show cause notice, the assessee was asked as to why penalty u/s.271D of the Act should not be levied for violating sec.269SS of the Act. The assessee objected to the proposal to levy penalty which submission has been reproduced by the Addl.CIT at Para No.4 of his order. However, the Addl.CIT was not satisfied with the explanation given by the assessee that the buyer was an agriculturist and that he was forced to accept the cash, since it was beyond banking hours and that the source of Rs. 23 lakhs deposited was out of the sale ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... contention, he drew our attention to the assessment order passed by the AO u/s.143(3) dated 31.10.2019, which is found placed at Page Nos.54-59 of the Paper Book, and brought to our notice that there is no satisfaction recorded by the AO about violation of sec.269SS of the Act [i.e. assessee receiving specified sum/loan or deposit] which attract penalty u/s.271D of the Act. In the absence of satisfaction recorded by the AO in the course of framing assessment order as to the violation by assessee u/s.269SS of the Act, the Ld.AR asserted that impugned penalty levied by the Addl.CIT is bad in law and in support of such a contention cited the decision of the Hon ble Supreme Court in the case of CIT v. Jai Laxmi Rice Mills reported in [2015] 37 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... u/s 271D of the Act. The Hon'ble High Court held that the provisions of secs 271D 271E are pari materia to each other and the decision of the Hon'ble Supreme Court in Jai Laxmi Rice Mills case is applicable to penalty u/s 271D also. The relevant portion of the decision of the Hon'ble High Court is extracted as under: 22. From an analysis of Sections 271D and 271E of the Act, it is seen that both the provisions are pari materia to each other. While Section 271D of the Act would be attracted on a person accepting loan or deposit or specified sum in contravention of Section 269SS of the Act, penalty under Section 271 E of the Act would be imposable on a person who makes or repays the loan or deposit or specified advance in contrave ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... icer 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. 24. Reverting back to the facts of the present case, we find that petitioner had submitted reply to the show cause notice on 02.06.2022. In his reply, petitioner mentioned that no satisfaction was recorded by the assessing officer in the assessment order as to infraction of Section 269SS of the Act. Therefore, no penalty could be levied under Section 271D of the Act without recorded satisfaction. In this connection, reference was made to the decision of the Supreme Court in Jai La ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... thority or any other civil authority or for that matter any court in the country, to comply with the decision of the Supreme Court. 9. Following the Hon ble Courts decisions (supra), this Tribunal in several cases [T Shiju v. JCIT in ITA No.2829/Chny/2018 dated07.06.2019] has held that recording of satisfaction by the AO in the assessment order regarding the violation of the provisions of section 269SS is a mandatory requirement for valid initiation of penalty proceedings us 271D of the Act and no penalty could be levied if the AO failed to record such satisfaction in the assessment order. In the present case, on perusal of the assessment order u/s 143(3) dated 31.10.2019, it is seen that no such satisfaction has been recorded by the AO in ..... X X X X Extracts X X X X X X X X Extracts X X X X
|
