NIRMAL KUMAR BARDIYA, SON OF SAGARMAL KALYANMAL JAIN vs. ASSISTANT COMMISSIONER OF INCOME TAX

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CW/17570/2024HC RajasthanRJHC02095699202424 February 2025Author: AVNEESH JHINGAN,PRAMIL KUMAR MATHUR2 pages
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What did the High Court hold?

The High Court allowed the writ petition, quashing the impugned notice dated 04.10.2024 issued under Section 271D of the Income Tax Act, 1961. The Court's decision was based on the principle that for penalty proceedings under Section 271D to be initiated, there must be a satisfaction recorded in the assessment order by the Assessing Officer. The Court found that the assessment order in this case did not contain such a satisfaction. The Court followed its own previous decision in D.B. Civil Writ Petition No.1102/2025 (Sunil Agrawal vs. Assistant Commissioner of Income Tax & Anr.) and the Supreme Court's judgment in Commissioner of Income Tax vs. Jai Laxmi Rice Mills [(2015) 379 ITR 521 (SC)]. The ratio decidendi is that the absence of recorded satisfaction in the assessment order vitiates the initiation of penalty proceedings under Section 271D. The operative direction was to quash the notice.

What were the facts?

The petitioner, Nirmal Kumar Bardiya, filed his return for Assessment Year 2019-2020. A search was conducted at his premises, followed by proceedings under Section 143(2) of the Income Tax Act, 1961, which concluded with an assessment order dated 22.03.2024. Subsequently, the Joint Commissioner of Income Tax, Central Circle, Jodhpur, issued a notice dated 04.10.2024 under Section 271D of the Act for levying penalty. The petitioner filed a writ petition challenging this notice.

What were the issues?

1. Whether the notice issued under Section 271D of the Income Tax Act, 1961, is liable to be quashed in the absence of any satisfaction recorded in the assessment order for initiating such proceedings? Assessee's Contention: The petitioner argued that the assessment order did not record any satisfaction for initiating proceedings under Section 271D. While the order mentioned initiation of penalty proceedings under Section 271AAC separately, it lacked the prerequisite satisfaction for Section 271D. The petitioner relied on the High Court's decision in D.B. Civil Writ Petition No.1102/2025 (Sunil Agrawal vs. Assistant Commissioner of Income Tax & Anr.) and the Supreme Court's ruling in Commissioner of Income Tax vs. Jai Laxmi Rice Mills [(2015) 379 ITR 521 (SC)], which held that penalty proceedings cannot be initiated without recording satisfaction in the assessment order. Revenue's Contention: The learned counsel for the respondents was unable 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 143(2),Section 271AAC

AI-generated summary — verify with the full judgment below

Cause title — parties, addresses and appearances
[2025:RJ-JP:8190-DB] HIGH COURT OF JUDICATURE FOR RAJASTHAN BENCH AT JAIPUR D.B. Civil Writ Petition No. 17570/2024 Nirmal Kumar Bardiya, Son Of Sagarmal Kalyanmal Jain, Aged About 63 Years, Having His Address At 24, Bardiya Colony, Museum Road, Jaipur ----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 Circle, Jodhpur, Aayakar Bhawan, Paota, C-Road, Jodhpur ----Respondents For Petitioner(s) : Ms. Apeksha Bapna with Mr. Rohan Chatter for Mr. Siddharth Ranka For Respondent(s) : Mr. Siddharth Bapna with Mr. Meyhul Mittal HON'BLE MR. JUSTICE AVNEESH JHINGAN HON'BLE MR. JUSTICE PRAMIL KUMAR MATHUR

Order 24/02/2025 AVNEESH JHINGAN, J (ORAL):

1.

This petition is filed seeking quashing of notice dated 04.10.2024 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 2019-2020. Search was conducted at the premises of the petitioner, notice under section 143(2) of the Act was issued and the proceedings culminated in assessment order dated 22.03.2024. Joint Commissioner of Income Tax, Central

[2025:RJ-JP:8190-DB] (2 of 2) [CW-17570/2024] 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 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. (PRAMIL KUMAR MATHUR),J (AVNEESH JHINGAN),J Simple Kumawat /47

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