Meghana Avenues Private Limited Vs CIT (Appeals) (Telangana High Court)
Summary
The Telangana High Court examined whether penalty proceedings under Section 271D of the Income Tax Act could be initiated by the Joint Commissioner of Income Tax without any satisfaction being recorded by the Assessing Officer in the assessment order regarding violation of Section 269SS of the Act. The writ petition challenged the appellate order dated 04.06.2025 passed by the National Faceless Appeal Centre (NFAC), which had upheld a penalty order dated 19.10.2022 imposing penalty of ₹40.50 lakh under Section 271D read with Section 274 of the Act.
The assessee had filed its return for AY 2017-18 declaring income of ₹8.60 lakh. During demonetization, cash deposits of ₹14.38 lakh in bank accounts led to reopening of assessment proceedings under Section 147. After examining the records and explanations furnished by the assessee, the reassessment order dated 15.03.2022 accepted the returned income and recorded that no adverse inference was drawn.
Subsequently, the Joint Commissioner issued notice under Section 274 read with Section 271D alleging violation of Section 269SS on the ground that the assessee had accepted cash amounts exceeding the prescribed limit from customers towards sale of plots and residential houses. Penalty proceedings culminated in levy of ₹40.50 lakh penalty, which was affirmed by the NFAC.
