AZAD COACH BUILDERS PRIVATE LIMTIED,BANGALORE vs. INCOME TAX OFFICER, WARD-1(1)(2), BANGALORE

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ITA 1978/BANG/2024Status: DisposedITAT Bangalore05 August 2025AY 2012-13Bench: SHRI NARENDER KUMAR CHODHRY (Judicial Member), SHRI WASEEM AHMED (Accountant Member)1 pages

In favour of the assessee: the assessee's appeal was allowed. From the AI summary of this appeal.

AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that since no satisfaction was recorded in the assessment order regarding the initiation of penalty proceedings, the penalty levied was unsustainable.

What were the facts?

The assessee's income was accepted in the assessment order. Subsequently, the AO levied a penalty under Section 271D for violation of Section 269SS. The CIT upheld the penalty. The assessee appealed, arguing that no satisfaction was recorded for initiating penalty proceedings.

What were the issues?

Whether a penalty under Section 271D can be levied without recording satisfaction for its initiation in the assessment order.

Which sections of the Income-tax Act were involved?

Section 271D,Section 269SS,Section 250

AI-generated summary — verify with the full judgment below

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Income Tax Appellate Tribunal, ‘B’ BENCH, BANGALORE

Before: SHRI NARENDER KUMAR CHODHRY & SHRI WASEEM AHMED

For Appellant: Shri Ravishankar S.V, Advocate
For Respondent: Shri Balusamy N, JCIT (DR)
Hearing: 05.08.2025Pronounced: 05.08.2025

Azad Coach Builders Pvt. Limited, Vs. The Income Tax Officer, 27th KM, Mysore Road, Ward - 1(1)(2), Bangalore. Sheshagirihalli, Bangalore – 562 109. . PAN – AABCA 4311 Q APPELLANT RESPONDENT Assessee by : Shri Ravishankar S.V, Advocate Revenue by : Shri Balusamy N, JCIT (DR) Date of hearing : 05.08.2025 Date of Pronouncement : 05.08.2025 O R D E R PER SHRI NARENDER KUMAR CHODHRY, JUDICIAL MEMBER:

This appeal has been preferred by the assessee against the order dated 04/10/2024 impugned herein passed by the National Faceless Assessment Center (NFAC), Delhi/Ld. Commissioner of Income Tax (Appeal) [in short ‘Ld. Commissioner’] u/s 250 of the Income-tax Act 1961 (in short, ‘the Act’) for the assessment year 2012-13.

2.

In this case, vide order dated 26/03/2024 u/s 143(3) of the Act, the assessment of the assessee was completed and the returned income to the tune of Rs.9,26,050/- as declared by the assessee by filing its return of income for the assessment year under consideration on 12/02/2013, was accepted.

4.

The assessee being aggrieved challenged the said penalty by filing first appeal before the Ld. Commissioner but could not get any relief, as the Ld. Commissioner vide impugned order affirmed the penalty by dismissing appeal filed by the assessee.

5.

Thus, the assessee being aggrieved has preferred the instant appeal and claimed that in the assessment order, the AO has not recorded any satisfaction/not initiated any penalty proceedings simultaneously and thus, violated the provision of law as well as the principle of natural justice and, therefore, the penalty levied is unsustainable, specifically in view of the judgment passed by Hon’ble ITAT in the case of CIT Punchkula Vs. Jayalakshmi Rice Mills Ambala City (2015) 64 taxmann.com 75 (SC), wherein it was held as under:-

“5. As pointed out above, insofar as, fresh assessment order is concerned, there was no satisfaction recorded regarding penalty proceeding under Section 2711, of the Act, though in that order the Assessing Officer wanted penalty proceeding to be initiated under Section 271(l)(c) of the Act. Thus, insofar as penalty under Section 2711? is concerned, it was without any satisfaction and, therefore, no such penalty could he levied. these appeals are, accordingly, dismissed.

6.

On the contrary, the ld. DR rebutted the claim of the assessee by supporting the orders passed by the authorities.

7.

Having heard the authorities and perused the materials available on record. As observed above, admittedly, the AO in the assessment order dated 26/03/2014 has not recorded any satisfaction for initiation of any penalty proceedings u/s 271D of the Act or any other provision of the Act, .

Page 3 of 3 however, vide penalty order dated 30/03/2016, has levied the penalty of Rs.25,84,920/- u/s 271D of the Act for violation of the provision of sec. 269SS of the Act and, therefore, we are in concurrence with the claim of the ld. Counsel for the assessee that in view of the dictum laid down by the Hon’ble Apex Court in the case of CIT, Panchkual (Supra) to the effect “that where there is no satisfaction was recorded regarding penalty in the Assessment order, then no penalty could be levied”, we are inclined to delete the penalty under consideration, thus the penalty is deleted by allowing the appeal of the assessee.

8.

In the result, the appeal filed by the assessee stands allowed.

Order pronounced in court on 05th day of August, 2025

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