Section 271D & 271E Penalty proceedings are independent of assessment proceedings

DCIT Vs C. Gangadhara Murthy (ITAT Bangalore) Conclusion: Penalty proceedings under section 271D or 271E were independent proceedings and had nothing to do with assessment proceedings or its outcome. Therefore, CIT(A) was not justified in cancelling the orders imposing penalty on the ground that the assessment proceedings, during the course of which, penalty u/s.271D and 271E were initiated had been held to be invalid. Held: AO noticed that assessee had taken cash loans in violation of the provisions of Sec.269SS and repaid cash loans in violation of the provisions of Sec.269T and hence penalt...