TMI Blog2023 (10) TMI 707X X X X Extracts X X X X X X X X Extracts X X X X ..... ded therein for the purpose of initiation of the penalty proceedings under Section 271E would also not survive. This according to us is the correct proposition of law stated by the High Court in the impugned order. As pointed out above, insofar as, fresh assessment order is concerned, there was no satisfaction recorded regarding penalty proceeding u/s 271E of the Act, though in that order the Assessing Officer wanted penalty proceeding to be initiated u/s 271(1)(c) of the Act. Thus, insofar as penalty under Section 271E is concerned, it was without any satisfaction and, therefore, no such penalty could be levied. - HONOURABLE MR. JUSTICE BIREN VAISHNAV And HONOURABLE MRS. JUSTICE MAUNA M. BHATT MR. NIKUNT RAVAL, SENIOR STAND ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... es covering the residential as well as business premises of the assessee group in December 2001 and January 2002. 3.2 The business premises of M/s. Parivar Television Pvt Ltd was also searched u/s. 132(1) of the Act on 19.12.2001 in connection with Jayraj Group. 3.3 A notice u/s. 158 BC was issued on 02.01.2003 to the assessee requesting it to file Block return of income for the taxable income including the undisclosed income for the block period. 3.4 A Block Assessment Order was passed on 31.12.2003, which reads as under:- 6. In view of the above discussion, the total undisclosed income of the assessee is computed as under: Undisclosed income as per return filed u/s. 158BC Return ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re. The Assessing Officer at the time of passing the assessment order has not initiated any kind of penalty. Subsequent of passing the assessment order, a reference was made by the Assessing Officer for initiation of penalty proceedings vide reference dated 14/05/2004 for initiation of penalty under Section 271D for violation of Section 269SS in respect of various deposits/ loan received by the assessee in cash in excess of Rs. 20,000/-, during the relevant financial year. The Additional Commissioner of Income Tax levied penalty under Section 271D vide his order dated 20/06/2005. On further appeal before the ld. CIT(A), the order of penalty under section 271D was upheld vide order dated 24.03.2006. however, on further appeal before Tribunal ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... relates to taking or accepting loan in cash in excess of Rs. 20,000/- in cash in contravention of Section 269SS. The ld. AR further submits that the Coordinate Bench of Surat Tribunal while following the order of Hon ble Apex Court in Jai Laxmi Rice Mills (supra), deleted the similar penalty under Section 271D. 9. The ld. AR further submits that he has already filed his submission on first additional ground of appeal which relates to time limit for passing the penalty order as prescribed under Section 275, as well as he has also filed his written submission on merit on the case. The ld. AR for the assessee submits that in case, the second additional ground of appeal is allowed, the other contention raised by assessee would become acad ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d be levied. We further find that by following the order of Hon ble Apex Court in CIT Vs Jai Laxmi Rice Mills (supra), the Coordinate Bench of Tribunal in The Nizar Taluka Sahkari Kharid Vechan Sangh Ltd. Vs JCIT in ITA No. 3157/Ahd/2015 dated 13/12/2019 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 27D dated 20/06/2005 is set aside/quashed. 6 In the case of Commissioner of Income-Tax, Panchkula vs. Jai Laxmi Rice Mills Ambala City., reported in [2 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... n of penalty proceedings under Section 271E of the Act was recorded. It so happened that on the basis of the original assessment order dated 26.02.1996, show cause notice was given to the assessee and it resulted in passing the penalty order dated 23.09.1996. Thus, this penalty order was passed before the appeal of the assessee against the original assessment order was heard and allowed thereby setting aside the assessment order itself. It is in this backdrop, a question has arisen as to whether the penalty order, which was passed on the basis of original assessment order and when that assessment order had been set aside, could still survive. 4. The Tribunal as well as the High Court has held that it could not be so for the simple rea ..... X X X X Extracts X X X X X X X X Extracts X X X X
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