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2019 (12) TMI 1569 - AT - Income TaxPenalty u/s.271D - default u/s 269SS - Mandation of recording satisfaction for initiation of penalty proceedings - as per AO assessee had accepted deposits exceeding ₹ 20,000/- otherwise the account payee cheques or bank drafts in contravention of provision of section 269SS - HELD THAT:- Hon'ble Apex Court in the case of CIT vs. Jai Laxmi Rice Mills [2015 (11) TMI 1453 - SUPREME COURT] dealing with the levy of penalty under section 271D of the Act, has held that if there is no satisfaction recorded in the order of assessment regarding initiation of penalty proceedings under section 271D of the Act, then no penalty thereunder could be levied. As in the case in hand no satisfaction for initiation of penalty proceedings under sections 271D and 271E of the Act has been recorded in the orders of assessment. In this factual matrix of the case and respectfully following the decision of the Hon'ble Apex Court in the case of Jai Laxmi Rice Mills (supra), we hold that since admittedly no satisfaction has been recorded for initiating penalty proceedings under sections 271D and 271E of the Act in the case on hand in the order of assessment for A.Y. 2000-01, therefore no penalty thereunder could be levied. In this view of the matter we cancel the penalty of 1,45,000/- each levied under sections 271D and 271E of the Act for A.Y. 2000-01. Consequently the assessee’s additional grounds are allowed in both the appeals. Since the position in the present case is identical as no satisfaction has been recorded by the ld.AO before initiating penalty u/s.271D of the I.T.Act, therefore while relying upon the judgments as mentioned above, we hold that since no satisfaction had been recorded for initiating penalty proceedings u/s.271D of the Act in the case in hand, therefore, no penalty could be levied. - Decide in favour of assessee.
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