| Question And Answer | |
|---|---|
| Subject: | Penalty u/Sec. 271D |
| Category: | Income-Tax |
| Querist: | Prakash |
| Answered by: | KSA Legal Chambers, reserch team |
| Tags: | loan or deposit, penalty |
| Date: | July 19, 2023 |
Whether penalty levied u/Sec. 271D by the JCIt for contravention of provisions of sec 269SS on the basis of reference of AO made after 2 months of Completion of assessment completed u/sec. 143(3) of the Act. Is justified in law.
Assessee relied upon the decision of Pune ITAt in the case of DR Kulkarni ITA No 444/PN/2013
JCIT relied up on decision of MP Highcourt in the case of Nitin Agarwal wp no 536 of 2018 Indore Bench . On the ground that this is only HC decision
Whether order of JCIT is valid ? Is there any other decision of HC in support of client . Pl guide.
Penalty proceeding for violation of section 269SS of the Income Tax Act, 1961 has to be initiated by the assessing officer in the assessment order. Any initiation done after the assessment order is bad in law and not sustainable. The Hon’ble Supreme court in the case CIT v. Jai Laxmi Rice Mills Ambala City (2015) 379 ITR 521 (SC) held that no penalty under section 271D of the Income Tax Act, 1961 can be levied if satisfaction is not recorded in the assessment order by the assessing officer. The querist may rely on the judgement of the Apex Court . If there is only one High Court which is favourable to the assessee the same have to be followed by the Appellate Authority Refer CIT v. Vegetable Products Ltd ( 1973) 88 ITR 192 ( SC) , The Assessing Officer is bound to follow the decision of the High Court of the State whose jurisdiction he is functioning . Refer K. Subramanian , ITO v. Siemens India Ltd (1985) 156 ITR 11 ( Bom)( HC)