Rameshwar Prashad Sharma Vs JCIT (ITAT Delhi)
Assessment Order, No Penalty: ITAT Quashes 271D Penalty for Lack of Satisfaction; ITAT Cancels Cash Transaction Penalty Because AO Failed to Record Satisfaction in Assessment; Section 271D Penalty Invalid Without Regular Assessment, Rules ITAT Delhi; ITAT Quashes Penalty on Property Cash Transaction Due to Procedural Defect
Summary: The ITAT Delhi held that penalty under Section 271D for alleged violation of Section 269SS cannot survive where no assessment proceedings or assessment order existed recording satisfaction regarding the default. In the present case, the penalty was imposed merely on the basis of information relating to acceptance of cash exceeding ₹20,000 in a property transaction, without any regular assessment being framed against the assessee. The Tribunal relied on earlier judicial precedents, including the decision in Umakant Sharma and rulings affirmed by higher courts, to reiterate that initiation of penalty proceedings under Sections 271D/271E requires satisfaction recorded during assessment proceedings. Since the Revenue failed to establish any assessment order containing findings regarding contravention of Section 269SS, the Tribunal held that the penalty proceedings lacked legal foundation. Accordingly, the impugned penalty was quashed and the assessee’s appeal was allowed.
Core Issue: The core issue before the Tribunal was whether penalty proceedings under section 271D for alleged contravention of section 269SS could be validly initiated and sustained in absence of any assessment proceedings, assessment order, or satisfaction recorded by the Assessing Officer regarding such default during assessment proceedings.
