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TMI Blog2025 (1) TMI 653X X X X Extracts X X X X X X X X Extracts X X X X ..... the legality and validity of the order passed under section 271D of the Income Tax Act, 1961 (for short "the Act") on the ground that recording of satisfaction is a prerequisite condition for initiation of penalty under section 271D of the Act, but in this case no such satisfaction was recorded prior to the initiation of the penalty proceedings nor passing the penalty order. Assessee placed reliance on the decisions of the Tribunal in the case of Sultan begum vs. ACIT in ITA No. 514 /Hyd/ 2023 for the assessment year 2017-18 by order dated 18/12/2023 and Sh. Umakant Sharma vs. JCIT in ITA No. 364 to 366/IND/2022 by order dated 19/7/2023, which was rendered following the binding precedent of the Hon'ble Supreme Court in the case of CIT vs. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ollowing the binding precedent of the Hon'ble Apex Court in the case of Jai Lakshmi rice Mills (supra) Hon'ble High Court observed as under. For the sake of completeness, I deem it just and necessary to extract hereunder the relevant observations and findings of the Hon'ble High Court,- "14. Issue raised in the writ petition is whether without satisfaction being recorded in the assessment order, penalty can be levied by the Joint Commissioner under Section 271D of the Act ? 15. Insofar the present case is concerned, we find that in the assessment order dated 24.03.2022 passed under Section 153A of the Act, return of income filed by the petitioner was accepted by the assessing officer and accordingly, the total income was assessed. I ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing relevant is extracted hereunder: Penalty for failure to comply with the provisions of section 269SS. 271D. (1) If a person takes or accepts any loan or deposit [or specified sum] in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit [or specified sum] so taken or accepted.] [(2) Any penalty imposable under sub- section (1) shall be imposed by the [Joint] Commissioner.] 19. Thus, what sub-section (1) of Section 271D provides for is that if a person takes or accepts any loan or deposit or specified amount in contravention of the provisions of Section 269SS, he shall be liable to pay by way of penalty, a sum equal to the amount of the loan o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ] so repaid.] [(2) Any penalty imposable under sub-section (1) shall be imposed by the [Joint] Commissioner.] 21. Thus, sub-section (1) of Section 271E of the Act provides that if a person repays any loan or deposit or specified advance referred to in Section 269T of the Act otherwise than in accordance with the provisions of that section, he shall be liable to pay by way of penalty a sum equal to the amount of the loan or deposit or specified advance so repaid. Sub-section (2) clarifies that any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner. 22. From an analysis of Sections 271D and 271E of the Act, it is seen that both the provisions are pari materia to each other. While Section 271D of the Act wou ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on 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 under Section 271E of the Act, though in that order the Assessing Officer wanted penalty proceeding to be initiated under Section 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. These appeals are, accordingly, dismissed. 24. Reverting back to the facts of the present case, we find that petitioner had submitted reply to the show cause notice on 02.06.2022. In his reply, petitioner mentioned that no satisfaction was recorded by the assess ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ion 271E of the Act. We have already discussed above that provisions of Section 271E and 271D of the Act are in pari materia. When there is a decision of the Supreme Court, it is the bounden duty of an adjudicating authority, be it an income tax authority or any other civil authority or for that matter any court in the country, to comply with the decision of the Supreme Court. 26. Article 141 of the Constitution of India is clear that law declared by the Supreme Court shall be binding on all courts within the territory of India. This is further clarified in Article 144, which says that all authorities, civil and judicial, in the territory of India shall act in aid of the Supreme Court. We are therefore, of the unhesitant view that respond ..... X X X X Extracts X X X X X X X X Extracts X X X X
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