Section 271D Penalty Proceedings Void if Quantum Assessment Quashed

Rudra Buildwell Projects P. Ltd. Vs DCIT (ITAT Delhi)

The Income Tax Appellate Tribunal (ITAT) Delhi has ruled in favor of Rudra Buildwell Projects Pvt. Ltd., deleting the penalty of ₹3,50,000 levied under Section 271D of the Income Tax Act, 1961. The penalty was originally imposed for alleged violation of Section 269SS, which prohibits acceptance of cash loans above a specified limit. However, the ITAT found that since the assessment under Section 153C was quashed, the penalty could not survive.

The penalty was imposed by the Assessing Officer (AO) on the grounds that the

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