Section 271E penalty cannot be imposed for Payment for purchases

B. P. Patel and Co. Vs ITO (ITAT Ahmedabad) It is elementary to say that the ‘satisfaction’ can only be formed by the person who is competent to impose penalty and not a lower ranking authority. The law provides for imposition of penalty by an officer of the rank of the Joint Commissioner. Thus, the AO is statutorily debarred for forming any ‘satisfaction’ either at the time of assessment order or subsequent thereto. Ld. AR mentioned that although the outstanding liability was shown under the ‘head loans’ in the balance sheet, such declaration by itself cannot be taken as sacrosanc...