RAVI SHANKAR JHANWAR SON OF SHRI GHASI LAL JHANWAR vs. ASSISTANT COMMISSIONER OF INCOME TAX

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CW/500/2025HC RajasthanRJHC02001645202524 March 2025Bench: AVNEESH JHINGAN,MANEESH SHARMA2 pages
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What did the High Court hold?

The High Court allowed the writ petition. The Tribunal found that the petitioner's argument, supported by the High Court's own decision in Sunil Agrawal and the Supreme Court's judgment in Jai Laxmi Rice Mills, was valid. The core reasoning was that penalty proceedings under Section 271D cannot be initiated without the requisite satisfaction being recorded in the assessment order. Since the assessment order did not record such satisfaction for Section 271D proceedings, and instead mentioned separate initiation of proceedings under Section 271AAC, the notice issued under Section 271D was deemed invalid. The ratio decidendi is that the prerequisite of recording satisfaction in the assessment order is mandatory for initiating penalty proceedings under Section 271D. Consequently, the impugned notice dated 08.07.2024 was quashed. No issue was expressly left undecided.

What were the facts?

The petitioner, Ravi Shankar Jhanwar, filed a writ petition challenging a notice dated 08.07.2024 issued under Section 271D of the Income Tax Act, 1961. The petitioner had filed a return for Assessment Year 2018-2019. Following a search conducted on 23.11.2021, a notice under Section 148 was issued, leading to an assessment order dated 31.03.2023. Subsequently, the Joint Commissioner of Income Tax, Central Jodhpur, issued the impugned notice under Section 271D for levying penalty. The petitioner's prior writ petition concerning this matter was decided on 30.01.2025.

What were the issues?

1. Whether penalty proceedings under Section 271D of the Income Tax Act, 1961, can be initiated in the absence of satisfaction recorded in the assessment order for such initiation, when the assessment order mentions initiation of penalty proceedings under Section 271AAC of the Act separately? Assessee's Contention: The petitioner argued that there was no satisfaction recorded in the assessment order for initiating proceedings under Section 271D. They relied on the decision of the High Court in D.B. Civil Writ Petition No.1102/2025 (Sunil Agrawal vs. Assistant Commissioner of Income Tax & Anr.) and connected matters, which allowed similar writ petitions. This decision, in turn, relied on the Supreme Court's ruling in Commissioner of Income Tax vs. Jai Laxmi Rice Mills [(2015) 379 ITR 521 (SC)], holding that penalty proceedings cannot be initiated without recorded satisfaction in the assessment order. Revenue's Contention: The learned counsel for the respondents was not in a position to distinguish the present case from the citation relied upon by the petitioner.

Which sections of the Income-tax Act were involved?

Section 271D,Section 148,Section 271AAC

AI-generated summary — verify with the full judgment below

[2025:RJ-JP:13256-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 500/2025 Ravi Shankar Jhanwar Son Of Shri Ghasi Lal Jhanwar, Aged About 63 Years, Resident Of 8, Barkat Nagar Tonk Road, Jaipur 302018 ----Petitioner Versus 1. Assistant Commissioner Of Income Tax, Central Circle-4, Jaipur Having Its Address At Room No. 416, 4Th Floor, Jeevan Nidhi, Lic Building, Ambedkar Circle, Jaipur 2. Joint Commissioner Of Income Tax, Central Jodhpur, Aayakar Bhawan, Paota, C-Road, Jodhpur. ----Respondents For Petitioner(s) : Mr. Siddharth Ranka with Ms. Apeksha Bapna & Mr. Rohan Chatter For Respondent(s) : Mr. Siddharth Bapna with Mr. Meyhul Miittal HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE MANEESH SHARMA Order 24/03/2025 AVNEESH JHINGAN, J (ORAL): 1. This petition is filed seeking quashing of notice dated 08.07.2024 issued under Section 271D of the Income Tax Act, 1961 (for short ‘the Act’). 2. The brief facts are that the petitioner filed return for Assessment Year 2018-2019. Search was conducted at the premises of Radha Mohan Tola on 23.11.2021 on the basis of which notice under section 148 of the Act was issued and the proceedings culminated in assessment order dated 31.03.2023.

[2025:RJ-JP:13256-DB] (2 of 2) [CW-500/2025] Joint Commissioner of Income Tax, Central Circle, Jodhpur issued notice u/s 271D of the Act for levying penalty. Hence, the present petition. 3. Learned counsel for the petitioner submits that there was no satisfaction recorded in the assessment order for initiating proceedings u/s 271D of the Act, however, it was recorded that the penalty proceedings u/s 271AAC of the Act shall be initiated separately. Reliance is placed upon decision of this Court dated 30.01.2025 in D.B. Civil Writ Petition No.1102/2025; Sunil Agrawal vs. Assistant Commissioner of Income Tax & Anr. and connected matters, in which the petition filed by the petitioner (in the present case) was also decided. The contention is that the writ petitions were allowed relying upon the decision of the Supreme Court in Commissioner of Income Tax vs. Jai Laxmi Rice Mills reported in [(2015) 379 ITR 521 (SC)] to the effect that in absence of satisfaction having been recorded in the assessment order, penalty proceedings cannot be initiated. 4. Learned counsel for the respondents is not in a position to distinguish the present case from the citation relied upon. 5. The writ petition is allowed in terms of the order dated 30.01.2025 passed in D.B.C.W.P. No.1102/2025 and the impugned notice is quashed. (MANEESH SHARMA),J (AVNEESH JHINGAN),J Riya/Deepa-91

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