TMI Blog2023 (12) TMI 403X X X X Extracts X X X X X X X X Extracts X X X X ..... a prerequisite for initiation of penalty u/s. 271D of the Act. We are of the considered opinion that issuing a notice u/s. 274 r.w.s 271D of the Act is nothing but an afterthought of the Ld. AO. As case of CIT Vs Jai Laxmi Rice Mills [ 2015 (11) TMI 1453 - SUPREME COURT] we are of the considered view that the penalty order passed u/s. 271D deserves to be quashed. Appeal of the assessee is allowed. - Shri Duvvuru Rl Reddy, Hon ble Judicial Member And Shri S Balakrishnan, Hon ble Accountant Member For the Appellant : Sri GVN Hari, AR For the Respondent : Sri Madhukar Aves, Sr. AR ORDER PER DUVVURU RL REDDY, JUDICIAL MEMBER : This appeal filed by the assessee against the order of the Ld. Commissioner of Incom ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o file the appeal within the stipulated time. In our considered opinion, the explanation given by the assessee constitutes reasonable and sufficient cause and therefore we hereby condone the delay of 34 days in filing the appeal and proceed to adjudicate the appeal on merits. 4. Briefly stated the facts of the case are that the assessee, an individual, is engaged the business activity by operating a Xerox Shop and e-filed his return of income for the AY 2017-18 on 31/07/2017 declaring a total income of Rs. 3,55,510/-. The return was processed u/s. 143(1) of the Act by the CPC, Bangalore on 7/11/2017 and subsequently the case was selected for limited scrutiny under CASS with the reasons to examine the issues of (i) Capital gain/loss on ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... , which was deposited in the bank account of the assessee since the other family members (daughters) are also staying with the assessee. The assessee also explained before the Ld. AO that the immovable property sold was an inherited property through intestate from his father. It was also submitted that his share of Rs. 10,49,500/- being 1/4th of the total sale consideration was admitted in his return of income and paid tax on capital gains at Rs. 1,43,459/-. The Ld. AO is in concord with the assessee s explanation and completed the assessment u/s. 143(3) of the Act and assessed the total income at Rs. 3,55,510/- vide the assessment order dated 20/09/2019. Thereafter, the Ld. JCIT, Range-1, Guntur issued a penalty show cause notice u/s. 274 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... case. 2. The Ld. CIT(A) is not justified in sustaining the penalty of Rs. 16,98,000/- levied u/s. 271D of the Act. 3. The Ld. CIT(A) ought to have considered that the case of appellant falls within the scope of reasonable cause provided u/s. 273B of the Act. 4. Any other grounds may be urged at the time of hearing. 6. Further, the assessee vide his letter dated 1/3/2023 raised the following Additional Grounds of Appeal: 1. The penalty levied u/s. 271D of the Act vide order dated 16/03/2022 is barred by limitation. 2. The penalty levied u/s. 271D of the Act is void-ab-initio and invalid in the absence of any satisfaction recorded in the assessment order. 7. At the outset, it is the main contention of the L ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d about the cash deposits made by the assessee amounting to Rs. 16,98,000/- and he convinced and accepted the explanation given by the assessee. Further, it is pertinent to mention that the Ld.AO has not recorded the satisfaction regarding the initiation of penalty proceedings while passing the assessment order u/s. 143(3) of the Act which is a prerequisite for initiation of penalty u/s. 271D of the Act. Under these circumstances, we are of the considered opinion that issuing a notice u/s. 274 r.w.s 271D of the Act is nothing but an afterthought of the Ld. AO. The ratio laid down in the case CIT Vs Jai Laxmi Rice Mills [379 ITR 0521] (SC), relied on by the Ld.AR the Hon ble Supreme Court has observed as follows: As pointed out above, i ..... X X X X Extracts X X X X X X X X Extracts X X X X
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