Grandhi Sri Venkata Amarendra Vs JCIT (Andhra Pradesh High court)
Andhra Pradesh High Court held that levy of penalty under section 271D of the Income Tax Act untenable since AO didn’t record any satisfaction to the effect that provisions of section 269SS of the Income Tax Act are violated.
Facts- During the search proceedings in the case of M/s. V.V.Balakrishna Rao, certain incriminating documents relating to the petitioner were found. AO concluded that the petitioner had financial transaction with Balakrishna Rao, outside the books and outside banking channels for the subject assessment year and it was concluded that the petitioner had accepted an amount of Rs.6,65,00,000/- as loan and repaid an amount of Rs.7,70,27,007/- on various dates. AO made addition of Rs.1,05,27,007/-, u/s. 69A of the Act, which according to AO is excess payment over and above the loans accepted. After passing of the assessment order AO, has referred the file to the Joint Commissioner of Income-tax, intimating the violations said to have been committed by the petitioner and for appropriate action. The learned Joint Commissioner of Income-tax, has initiated the penalty proceedings u/s. 271D of the Income Tax Act, and levied penalty of Rs. 6,65,00,000/-. Challenging the same, the present Writ Petition is filed.
