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TMI Blog2023 (12) TMI 1409X X X X Extracts X X X X X X X X Extracts X X X X ..... 11) TMI 1453 - SUPREME COURT ] satisfaction must be recorded in the original assessment order for the purpose of initiation of penalty proceedings under section 271E of the Act, the same is equally applicable for initiation of penalty proceedings under section 271D - Decided in favour of assessee. - SHRI K. NARASIMHA CHARY, JUDICIAL MEMBER For the Assessee: Shri Mohd. Afzal, AR For the Revenue: Shri Waseem UR Rehman, DR ORDER Aggrieved by the order dated 06/09/2023 passed bys the learned Commissioner of Income Tax (Appeals)- National Faceless Appeal Centre (NFAC), Delhi ( Ld. CIT(A) ), in the case of Sultana Begum ( the assessee ) for the assessment year 2017-18, assessee preferred this appeal. 2. Brief facts of the case are that during the financial year relevant to assessment year 2017-18, assessee sold her property in Plot No. 135 in Sy. No. 172/13 172/14 situated at Setwindabad Colony, Hydernagar Village, Balanagar Mandal, RR District and accepted the sale consideration in cash in contravention to the provision of section 269SS of the Income Tax Act, 1961 ( the Act ), learned Assessing Officer levied penalty of Rs. 14 lakhs under section 271D of the Act. 3. In appeal, learned ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e penalty levied under section 271D of the Act by holding that without any assessment proceedings in the case of the assessee such penalty is not valid and liable to be quashed. 7. Further, this question has directly and substantially been dealt with by the Hon ble jurisdictional High Court in the case of Srinivasa Reddy Reddeppagari (supra). In that case, while referring to the decision of the Hon ble Apex Court in the case of Jai Laxmi Rice Mills (supra), the Hon ble High Court held that the provisions under section 271E and 271D of the Act are in pari materia and since in terms of the decision in Jai Laxmi Rice Mills (supra), satisfaction must be recorded in the original assessment order for the purpose of initiation of penalty proceedings under section 271E of the Act, the same is equally applicable for initiation of penalty proceedings under section 271D of the Act. Hon ble High Court further observed that when there is a decision of the Supreme Court, it is the bounden duty of an adjudicating authority, be in an income tax authority or any other civil authority or for that matter any court in the country, to comply with the decision of the Supreme Court. For the sake of compl ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... deposit [or specified sum] so taken or accepted.] [(2) Any penalty imposable under subsection (1) shall be imposed by the [Joint] Commissioner.] 19. Thus, what sub-section (1) of Section 271D provides for is that if a person takes or accepts any loan or deposit or specified amount in contravention of the provisions of Section 269SS, he shall be liable to pay by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted. Sub-section (2) clarifies that any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner. 20. It would be useful to refer to Section 271E of the Act also at this stage which deals with penalty for failure to comply with the provisions of Section 269T of the Act. Be it stated that Section 269T of the Act provides that no branch of a banking company or a cooperative bank and no other company or cooperative society and no firm or other person shall repay any loan or deposit made with it or any specified advance received by it otherwise than by an account payee cheque or account payee bank draft drawn in the name of the person who had made the loan or deposit or who had paid the specified advance o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... tion 271E of the Act. It was noticed that the penalty order was passed before the appeal of the assessee was allowed by the Commissioner of Income Tax (Appeals). It was in that context that Supreme Court held as follows: The Tribunal as well as the High Court has held that it could not be so for the simple reason that when the original assessment order itself was set aside, the satisfaction recorded therein for the purpose of initiation of the penalty proceeding under Section 271E would also not survive. This according to us is the correct proposition of law stated by the High Court in the impugned order. As pointed out above, insofar as, fresh assessment order 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. 24. Reverting back to the facts of the present case, we find that petitioner had submitted reply to the show cause not ..... X X X X Extracts X X X X X X X X Extracts X X X X
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