Maleckunnel Philip Varghese Vs DCIT (ITAT Cuttack)
No Satisfaction, No Penalty under section 271D & 271E of Income Tax Act, 1961 – ITAT Cuttack follows SC in Jai Laxmi Rice Mills
Cuttack ITAT quashed penalties levied u/s 271D & 271E on the ground that no satisfaction was recorded by the AO in the assessment order for initiating such penalty proceedings.
Assessee challenged the penalty on three primary grounds (i) absence of satisfaction recorded in assessment order; (ii) penalties barred by limitation; & (iii) no cash was actually paid or received during the year.
Before the Tribunal, Assessee challenged the penalties levied u/s.271D & 271E on the following three grounds :- i) No satisfaction has been recorded by AO in the assessment years for the purpose of levying/initiating penalty u/s.271D or 271E ii) penalties levied u/s.271D & & 271E were barred by limitation iii) assessee has not paid nor received any cash during the impugned assessment years.
Drawing the attention of Tribunal to the assessment order, it was submitted that there is no satisfaction recorded therein for the levy of penalty u/s.271D or 271E . Reliance was placed on Jai Laxmi Rice Mills Ambala City [2015] 64 taxmann.com 75 (SC) which was followed by Hon’ble Andhra Pradesh High Court in Grandhi Sri Venkata Amarendra, reported in [2024] 167 taxmann.com 352 & Hon’ble Rajasthan High Court in Sunil Agrawal [2025] 172 taxmann.com 54 (Rajasthan),
