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2023 (1) TMI 366 - AT - Income TaxPenalty u/s 271D - limitation U/s 275(1)(c) - violation of Section 269SS in respect of various deposits/ loan received by the assessee in cash in excess of Rs. 20,000/- - HELD THAT:- On careful perusal of the assessment order, we find that there is no whisper or reference in the assessment order about initiation of penalty u/s 271D. We further find that there is no whisper about making a reference to the Joint Commissioner or Additional commissioner for levying such penalty. We find that in Jai Laxmi Rice Mills [2015 (11) TMI 1453 - SUPREME COURT], while considering the similar questions of law held that when no satisfaction recording regarding penalty proceedings under Section 271E, in the assessment order was recorded while passing the assessment order, no penalty could be levied. We further find that by following the order of Hon’ble Apex Court in CIT Vs Jai Laxmi Rice Mills [2015 (11) TMI 1453 - SUPREME COURT] the Coordinate Bench of Tribunal in The Nizar Taluka Sahkari Kharid Vechan Sangh Ltd [2019 (12) TMI 1569 - ITAT SURAT] also held that when no satisfaction has been recorded by the Assessing Officer before initiating penalty, no penalty under Section 271D could be levied. The order of Hon’ble Supreme Court, which is binding precedent by virtue of Article 141 of the Constitution of India and respectfully following the same the penalty order under section 271D dated 20/06/2005 is set aside/quashed. So far as submissions of ld CIT-DR for the revenue that non recording satisfaction of initiation is merely a curable defect, we are not convinced with such submission after clear cut finding of the Hon’ble Apex Court in CIT Vs Jai Laxmi Rice Mills [2015 (11) TMI 1453 - SUPREME COURT] In the result, the second additional ground of appeal is allowed.
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