PCIT Vs Parivar Television Private Limited (Gujarat High Court)
The Gujarat High Court considered a Tax Appeal under Section 260-A of the Income Tax Act, 1961, challenging the order of the Income Tax Appellate Tribunal (ITA No. 1738/AHD/2016) for the block period 01.04.1995 to 19.12.2001. The main questions were whether the Tribunal was justified in deleting a penalty under Section 271D amounting to Rs. 2.79 crore, whether it erred in not upholding the CIT(A)’s findings, and whether the Tribunal incorrectly based its decision on the absence of recorded satisfaction in the assessment order rather than on merits.
Read SC Judgment: Section 271D Penalty Deleted as No Satisfaction Recorded in Assessment: SC
A search under Section 132 was conducted at the business premises of Parivar Television Pvt Ltd on 19.12.2001 as part of the Jayraj Group investigations. A notice under Section 158BC was issued on 02.01.2003 for filing block return, and the Block Assessment Order dated 31.12.2003 computed undisclosed income of Rs. 1.09 crore. The order did not mention initiation of penalty proceedings under Section 271D. Subsequently, the Assessing Officer referred the matter for penalty proceedings on 14.05.2004, and the Additional Commissioner levied a penalty under Section 271D on 20.06.2005. The CIT(A) upheld the penalty, but the Tribunal, following the Supreme Court decision in CIT vs Jai Laxmi Rice Mills (2015) 64 taxmann.com 75, deleted the penalty on the ground that no satisfaction had been recorded for initiating proceedings under Section 271D in the assessment order.
