INCOME TAX OFFICER, INTL TAXATION, KAKINADA vs. SYAMALA SWAROOPA JAGARAPU, KAKINADA

ITA 315/VIZ/2026Status: DisposedITAT Visakhapatnam31 August 2026AY 2017-1817 pages
AI SummaryDismissed

What did the Tribunal hold?

The Tribunal held that the penalty levied under Section 271D of the Income Tax Act, 1961, is not sustainable for want of valid assumption of jurisdiction. The primary reason for this decision was the absence of satisfaction recorded by the Assessing Officer in the assessment order for initiating penalty proceedings. The Tribunal noted that the CIT(A) had deleted the penalty by relying on several binding precedents, including the Supreme Court's decision in CIT vs. Jai Laxmi Rice Mills, Ambala City, and the jurisdictional High Court's decision in Grandhi Sri Venkata Amarendra. The Tribunal found that the issue was no longer res integra in light of these judgments. The Tribunal also noted that in cases of divergent views, the view in favour of the assessee should be followed, citing Commissioner of Income Tax v. Vegetable Products Ltd. The penalty of Rs. 46.76 lacs imposed by the Addl/Joint Commissioner of Income Tax was struck down. The Tribunal refrained from adjudicating other contentions raised by the assessee, as they became infructuous due to the quashing of the penalty order. The cross-objection of the assessee was also dismissed as infructuous.

What were the facts?

The Revenue filed an appeal and the assessee filed a cross-objection against the order dated 07.01.2026 of the Commissioner of Income Tax (Appeals) - 10, Hyderabad. The appeal and cross-objection pertain to the Assessment Year 2017-18 and arise from a penalty order passed under Section 271D of the Income Tax Act, 1961. The penalty was levied for alleged violation of Section 269SS of the Act, which prohibits acceptance of cash exceeding a specified limit for certain transactions. The CIT(A) had deleted the penalty, leading to the present appeal by the Revenue. The procedural history indicates that the penalty was initially levied by the Assessing Officer (AO) and subsequently deleted by the CIT(A).

What were the issues?

1. Whether the CIT(Appeals) erred in deleting the penalty levied under Section 271D of the Income Tax Act, 1961, on the grounds that the Assessing Officer failed to record satisfaction in the assessment order for initiating penalty proceedings? Revenue's contentions: The penalty proceedings under Section 271D are independent of the assessment order, and there is no statutory requirement for the AO to record satisfaction in the assessment order for initiating such penalty proceedings. Reliance was placed on the decision of the ITAT, Cochin Bench in Subramanyam Harikumar Vs. JCIT, which followed the Kerala High Court's decision in Grihalakshmi Vision Vs. Addl.CIT. Assessee's contentions: The issue is covered by various binding decisions, including the jurisdictional High Court in Grandhi Sri Venkata Amarendra v. Jt. CIT and the Supreme Court in CIT vs. Jai Laxmi Rice Mills. The CIT(A) correctly followed these precedents. 2. Whether the CIT(Appeals) was justified in holding that Section 269SS of the Act does not apply to the assessee as the cash consideration was received as final payment at the time of registration, not as an 'advance'?

Which sections of the Income-tax Act were involved?

Section 271D,Section 269SS,Section 143(3),Section 273B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM

Heard together (2 matters)

ITA No.315/VIZ/2026
Co No.10/Viz/2026

Read from the judgment's own cause title. This page is filed under one of them.

PER SHRI VIJAY PAL RAO, VICE PRESIDENT :

20.08.

2026

This appeal filed by the Revenue and cross objection by the assessee are directed against the order dated 07.01.2026 of ITA 315/VIZ/2026 & CO 10/Viz/2026 Syamala Swaroopa Jagarapu

Commission

The order continues below.

Read the full judgment

A free account opens 10 full judgments a month. Re-reading one you have already opened does not count again.

Create a free accountSign in

See plans and prices

The summary, the parties, the sections and the citations above are open to everyone and always will be. Only the text of the order and the PDF are metered.

More judgments on Section 271D

All 1,725 judgments and leading authorities on Section 271D →

Recent GST High Court judgments

Search GST case law →