TMI Blog2017 (2) TMI 1494X X X X Extracts X X X X X X X X Extracts X X X X ..... rther satisfaction for levy of penalty the said order levying penalty u/s 271D could not have been passed - Decided against revenue. - ITA No.409 /Chd/2011 - - - Dated:- 16-2-2017 - HRI BHAVNESH SAINI AND MS. ANNAPURNA GUPTA, JJ. Appellant by : Shri Ravi Sarangal, CIT DR Respondent by : Shri Parikshit Aggarwal ORDER ANNAPURN A GUP TA,.J. This appeal filed by the Revenue is directed against the order of learned Commissioner of Income Tax (Appeals)-I, Ludhiana dated 28.1.2011 relating to assessment year 2007-08, passed against the order of the Assessing Officer levying penalty u/s 271D of the Income Tax Act, 1961 (in short the Act ). 2. The Revenue has raised following grounds of appeal : 1. The Ld. CIT( ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... The matter was carried in appeal before the Ld. CIT (Appeals) who deleted the penalty levied by holding that the assessee had not accepted any loan or deposit and, therefore, provisions sof section 269SS of the Act were not applicable. 4. Against the aforesaid order of the Ld. CIT (Appeals), the Revenue has now come up in appeal before us. During the course of hearing, the Ld. counsel for the assessee supported the order of the Ld. CIT (Appeals) and further brought to our notice that the original assessment order in which the penalty u/s 271D had been initiated, had been held invalid by the I.T.A.T., Chandigarh Bench in its order in the Cross Objection filed by the assessee in C.O.No.13/Chd/2011 vide order dated 22.12.2016. The Ld. couns ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... penalty and could, therefore, have passed assessment order on the basis of penalty initiated in the original assessment order. 6. We have heard the contentions of both the parties and perused the documents placed before us. We have also gone through the order of the Hon'ble Apex Court relied upon by the Ld. counsel for the assessee. On going through the aforementioned order we find that the Hon'ble Apex Court, on the question framed before it whether penalty proceedings under section 271D of the Income Tax Act were independent of assessment proceedings, negatived the same by categorically holding that when the original assessment order had been set aside, the satisfaction recorded therein for the purpose of initiation of the pen ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e penalty was initiated in the assessment order which was passed u/s 153A r.w.s.143(3) dated 21.8.2009. It is also not disputed that the said order has been annulled and rendered invalid by the Hon'ble I.T.A.T. in its order passed in the case of the assessee in C.O.No.13/Chjd/2011 dated 22.12.2016. The relevant findings of the I.T.A.T. at para 12 of the order are as follows : 12. In Cross Objection No. 13/Chd./20I1 pertaining to M/s Karan Empire Pvt. Ltd. and in ITA No. 1327/Chd./2010 filed by the assessee Sh. S. L. Arora for the assessment year 2007-08, an identical issue as was involved in the case of Sh. Rajiv Kumar, Mohali (supra) has been raised. Therefore, our findings given in the former part of this order in ITA No. 41/Chd. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case before the Hon'ble Apex Court the assessment had been set aside with the direction to frame afresh assessment while in the present case before us, the assessment order passed has been held to be invalid, the proposition laid down by the Hon'ble Apex Court still applies since the ultimate effect of the facts in both the cases still results in the original assessment order not surviving, as also the satisfaction recorded therein for the purpose of initiation of penalty proceedings u/s 271E/271D of the Act. Therefore, the proposition laid down by the Hon'ble Apex Court squarely applies in the present case following which we uphold the order of the Ld. CIT (Appeals) deleting the levy of penalty u/s 271D of the Act amounting to ..... X X X X Extracts X X X X X X X X Extracts X X X X
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