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2023 (11) TMI 698 - AT - Income TaxPenalty u/s. 271D - mandation of recording satisfaction - as pr AO no reasonable cause for acceptance of cash by the assessee company from one of its Directors and considered that it is a fit case for levy of penalty - contravention of the provisions of section 269SS - HELD THAT:- Admittedly, in the quantum proceedings both in the case of the assessee company and in the case of Sri Arunachalam Manickavel [2018 (11) TMI 1325 - ITAT VISAKHAPATNAM] the Hon’ble Tribunal has held in favour of the assessee. Further, the reliance placed by the Ld. AR on the judgment of the Hon’ble Supreme Court in the case of CIT vs. Jai Laxmi Rice Mills Ambala City [2015 (11) TMI 1453 - SUPREME COURT] wherein the Hon’ble Supreme Court has held that the Ld. AO has to record his satisfaction for the purpose of initiating penalty proceedings under the Act. Also decided in Kanchumarthi Venkata Sita Ramachandra Rao [2022 (9) TMI 53 - ITAT VISAKHAPATNAM] when there is no satisfaction report recorded by the Ld. AO in the assessment record, no penalty could be levied. As, in the instant case, the Hon’ble jurisdictional Bench of the Tribunal has deleted the additions both under the protective basis and the substantive basis as the creditworthiness and genuineness of the source of the funds were proved beyond doubt. Considering all we are of the considered view that the penalty order u/s. 271D passed by the Ld. AO without recording proper satisfaction, deserves to be quashed - Decided in favour of assessee.
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