RELIANCE RITU KUMAR PRIVATE LIMITED (EARLIER KNOWN AS RITIKA PRIVATE LIMITED),TILAK MARK, DELHI vs. ADDL. CIT CENTRAL RANGE-1, DELHI, DELHI

PER M. BALAGANESH, A. M.: 1. The appeal in ITA No.293/Del/2024 for AY 2018-19, arises out of the ld. Commissioner of Income Tax (Appeals)-23, New Delhi [hereinafter referred to as ‘ld. CIT(A)’, in short] in Appeal No. CIT(A),Delhi-23/10309-2017-18 dated 29.11.2023 against the order of assessment passed u/s 271DA of the Income-tax Act, 1961 (hereinafter referred to as ‘the Act’) dated 30.03.2022 by the Assessing Officer, Addl. CIT, Central Range-1, Delhi (hereinafter referred to as ‘ld. AO’). Identical issue is involved in both these appeals and hence they are taken up together and disposed of by this common order for the sake of convenience.

ITA No. 293 & 294/Del/2024
Reliance Ritu Kumar Pvt. Ltd
2. The only identical issue involved in both these appeals is as to whether the learned CITA was justified in confirming the levy of penalty under section 271 DA of the Act in the facts and circumstances of the instant case.
3. We have heard the rival submissions and perused the materials available on record. The assessee company is a top brand fashion designer of national and international repute. A search and seizure operation was conducted under section 132
of the Act on 29-05-2018 at the premises of M/s Ritika Private Limited (presently known as Reliance Ritu Kumar Private Limited). During the course of search and seizure operations, it was found from the seized documents that assessee company had grossly violated the provisions of section 269 ST of the Act by way of cash receipts of Rs 2
lakhs or more from a single person by splitting the invoices against sale of goods at its stores. The assessment order for the assessment year 2018-19 was passed on 8-4-2021
and for assessment year 2019-20 on 11-4-2021. In the said assessment order, there was no mention regarding initiation of penalty proceedings under section 271 DA of the Act. A reference for initiating penalty proceedings under section 271 DA of the Act was received from the assessing officer by the Learned Additional Commissioner of Income Tax, Central Range 1, New Delhi vide letter dated 30-9-2019 for violation of provisions of section 269 ST of the Act, thereby warranting levy of penalty under section 271 DA of the Act. It is not in dispute that the assessee had made certain cash sales more than 2 lakhs by splitting the bills during the years under consideration and had violated the provisions of section 269 ST of the Act. However, on perusal of the quantum assessment order framed under section 153A read with section 143(3) of the Act on 8-4-2021 for assessment year 2018-19 and that framed for the assessment year
2019-20 on 11-4-2021, we find that there is absolutely no mention of recording satisfaction by the assessing officer that assessee had violated the provisions of section 269 ST of the Act. Now, the short question that arises for our consideration is as to whether such non-recording of satisfaction in the quantum assessment order would be fatal to the levy of penalty under section 271 DA of the Act.

ITA No. 293 & 294/Del/2024
Reliance Ritu Kumar Pvt. Ltd
4. In this regard, the learned DR vehemently submitted that there is no requirement of recording the satisfaction in the quantum assessment order as the section does not prescribe requirement of recording such satisfaction. The learned DR submitted that in the event of no additions made by the assessing officer in the quantum assessment proceedings, there would be no need to record any satisfaction by the assessing officer regarding initiation of penalty under section 271 DA of the Act and more so, this levy of penalty is in violation of provisions of 269ST of the Act, which has got absolutely no relevance to the determination of total income of the assessee. In other words, irrespective of the fact as to whether any addition has been made in the quantum assessment order or not, if there is any violation found in the provisions of section 269 ST of the Act, the levy of penalty under section 271 DA of the Act would be automatic subject to subject to assessee furnishing of reasonable cause in terms of section 273 B of the Act. In fact, the learned DR also submitted that there need not be any assessment proceedings at all for the purpose of levy of penalty under section 271
DA of the Act as the said information could emanate even from the external parties like sub