PAWAN KUMAR JAIN S/O SHRI NATHU LAL JAIN vs. ADDITIONAL/JOINT COMMISSIONER OF INCOME TAX CENTRAL

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CW/3537/2025HC RajasthanRJHC02019993202503 April 2025Bench: MANINDRA MOHAN SHRIVASTAVA,ANAND SHARMA2 pages
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What did the High Court hold?

The Tribunal held that the penalty proceedings initiated in this case are liable to be quashed. The reasoning was based on the petitioner's submission that the assessment order dated 22.02.2024 did not record the satisfaction required under Section 271D of the Income Tax Act, 1961. This was further supported by the precedent set by a Division Bench of the same court in Sunil Agrawal Vs. Assistant Commissioner of Income Tax, which held that penalty proceedings are quashable in the absence of recorded satisfaction. The Tribunal found that the respondents' counsel could not dispute this factual and legal position. Consequently, the penalty proceedings were quashed. The operative direction was to quash the penalty proceedings and allow the petition.

What were the facts?

The petitioner, Pawan Kumar Jain, challenged penalty proceedings initiated against him. The petitioner's counsel argued that the assessment order dated 22.02.2024 did not record the satisfaction required under Section 271D of the Income Tax Act, 1961, for initiating penalty proceedings. The counsel further contended that the issue is covered by a previous Division Bench order in Sunil Agrawal Vs. Assistant Commissioner of Income Tax, which held that penalty proceedings are liable to be quashed in the absence of such satisfaction, even if proceedings under Section 271(1)(c) were directed. The respondents' counsel could not dispute the factual and legal position presented by the petitioner.

What were the issues?

1. Whether penalty proceedings initiated under Section 271D of the Income Tax Act, 1961, are liable to be quashed in the absence of the Assessing Officer recording the satisfaction required by the said section, despite a direction for initiation of proceedings under Section 271(1)(c)? Assessee's Contention: The petitioner argued that the assessment order dated 22.02.2024 lacked the mandatory satisfaction required under Section 271D of the Act for initiating penalty proceedings. They relied on the Division Bench order in D.B. Civil Writ Petition No. 1102/2025 (Sunil Agrawal Vs. Assistant Commissioner of Income Tax) which held that penalty proceedings are quashable if no satisfaction is recorded, even if proceedings under Section 271(1)(c) were directed. Revenue's Contention: The respondents' counsel did not dispute the factual statement or the legal position presented by the petitioner.

Which sections of the Income-tax Act were involved?

Section 271D,Section 271(1)(c)

AI-generated summary — verify with the full judgment below

[2025:RJ-JP:14988-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 3537/2025 Pawan Kumar Jain S/o Shri Nathu Lal Jain, Aged About 49 Years, C/o Chanda Lal Kalyan Mal And Sons, 1, Near Jaipur Glass Factory, Tonk Road, Jaipur-302015 ----Petitioner Versus 1. Additional/joint Commissioner Of Income Tax Central, 4Th Floor, Jeevan Nidhi-2, Lic Building, Ambedkar Circle, Jaipur-302005 2. Deputy Commissioner Of Income Tax, Central Cirlce-1, 4Th Floor, Jeevan Nidhi-2, Lic Building, Ambedkar Circle, Jaipur-302005 3. Principal Commissioner Of Income Tax (Central), New Central Revenue Building, Bhagwan Das Road, Jaipur, Rajasthan 302005 ----Respondents For Petitioner(s) : Mr. Tanuj Agrawal For Respondent(s) : Mr. Siddharth Bapna with Mr. Meyhul Mittal HON'BLE THE CHIEF JUSTICE MR. MANINDRA MOHAN SHRIVASTAVA HON'BLE MR. JUSTICE ANAND SHARMA Order 03/04/2025 1. Learned counsel for the petitioner submits that the issue raised in this petition is squarely covered by order dated 30.01.2025 passed by a Division Bench of this Court in D.B. Civil Writ Petition No. 1102/2025-Sunil Agrawal Vs. Assistant Commissioner of Income Tax and batch of petitions wherein it has been held that where no satisfaction is recorded, as required under Section 271E of the Act and even though AO has directed (Uploaded on 04/04/2025 at 04:43:13 PM) (Downloaded on 30/10/2026 at 09:39:59 AM)

[2025:RJ-JP:14988-DB] (2 of 2) [CW-3537/2025] initiation of proceedings under Section 271(1)(c) of the Act, the penalty proceedings are liable to be quashed in the absence of satisfaction. He would submit that on facts also, in the assessment order dated 22.02.2024, no such satisfaction as required under the law for initiation of proceedings under Section 271D of the Act of 1961 has been recorded. Therefore, the penalty proceedings are liable to be quashed. 2. Learned counsel for the respondents is not in a position to dispute the factual statement and the legal position, as stated hereinabove. 3. In that view of the matter, the penalty proceedings initiated in this case are also liable to be quashed and, accordingly, the same is quashed. 4. The petition is, accordingly, allowed. (ANAND SHARMA),J (MANINDRA MOHAN SHRIVASTAVA),CJ N.Gandhi/Neeru/15 Powered by TCPDF (www.tcpdf.org) (Uploaded on 04/04/2025 at 04:43:13 PM) (Downloaded on 30/10/2026 at 09:39:59 AM)

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