ANIL SHARMA, JAIPUR,JAIPUR vs. ITO, WARD-1(3), JAIPUR, JAIPUR
आयकर अपीलीय अधिकरण] जयपुर न्यायपीठ] जयपुर
IN THE INCOME TAX APPELLATE TRIBUNAL, JAIPUR BENCHES,”SMC” JAIPUR
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BEFORE: SHRI RATHOD KAMLESH JAYANTBHAI, AM & SHRI NARINDER KUMAR, JM vk;dj vihy la-@ITA No. 1480/JPR/2024
fu/kZkj.k o"kZ@Assessment Year : 2014-15
Ward-1(3),
Jaipur.
LFkk;hys[kk la-@thvkbZvkj la-@PAN/GIR No.: BJQPS9717Q vihykFkhZ@Appellant izR;FkhZ@Respondent fu/kZkfjrh dh vksj ls@Assessee by : Sh. Naman Maloo, C.A.
jktLo dh vksj ls@Revenue by: Sh. Gautam Singh Choudhary, JCIT lquokbZ dh rkjh[k@Date of Hearing
: 16/01/2025
mn?kks"k.kk dh rkjh[k@Date of Pronouncement: 16/01/2025
vkns'k@ORDER
PER: Narinder Kumar, Judicial Member
Assessee is before this Appellate Tribunal, feeling aggrieved by order dated 15.10.2024, passed by Learned CIT(A), NFAC, Delhi.
The matter pertains to the assessment year 2014-15. Vide impugned order, penalty imposed by the Assessing Officer u/s 271E of the Income Tax Act, 1961 (in short “the Act”) has been upheld.
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The Assessing Officer imposed penalty of Rs. 24,988/-, finding that the assessee had violated provisions of Section 269-T of the Act, by making repayment of a sum of Rs. 24,988/- in cash.
Hence, this appeal.
2. Arguments heard. File perused.
3. Ld. AR for the appellant has submitted that while passing order as regards quantum assessment, the Assessing Officer was required to record satisfaction about violation of provisions of Section 269T read with section 271E of the Act, as regards the above said repayment in cash, but no such satisfaction was recorded before passing the penalty order, which has been upheld by Ld. CIT(A).
Further, it has been contended that while recording satisfaction for initiation of penalty proceedings, in the assessment order, the Assessing
Officer nowhere recorded satisfaction that penalty proceeding u/s 271E of the Act were also going to be initiated against the assessee, and as such, the penalty order and the impugned order deserve to be set aside.
4. On the other hand, Ld. DR for the department has submitted that for the reasons recorded by Learned CIT(A), present appeal deserves to be dismissed, as it was found to be a case of violation of provisions of section 269T of the Act, attracting penalty u/s 271E of the Act.
5. A perusal of the assessment order dated 22.12.2016 would reveal that while parting with the assessment order at page 7 to 9 thereof, the Assessing Officer observed as under:-
“The assessee has not maintained the books of accounts & the net income of Rs.
9,04,840/- declared by the assessee exceeds the limit prescribed u/s 44AD of the Income Tax Act 1961. Hence penalty proceedings u/s 271A of the Income Tax
Act 1961 are being initiated separately.
The assessee has not audited the books of accounts hence the assessee's turnover is above one crore which is assessed at Rs. 1,61,11,776/-& the net income of the assessee exceeds the limit prescribed u/s 44AD of the Income Tax
Act 1961. Hence penalty proceedings u/s 2718 of the Income Tax Act 1961 are being initiated separately.
In this case the turnover of the assessee is Rs. 1,61,11,776/-which is above 1
crore. Hence the assessee is liable to maintain the books of accounts and audit of accounts of certain persons carrying on business or profession as per u/s 44AA/44AB of the Income tax Act, 1961. As such penalty proceedings u/s 271 A and u/s 2718 are initiated for non- maintenance of books of accounts and also for not getting the accounts audited. The assessee has furnished inaccurate particulars and has concealed income hence penalty proceedings u/s 271(1)(c) r.w. 274 are being initiated.
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Assessed u/s 143(3) of the Income tax Act, 1961 at a total income of Rs.
14,00,280/-, Charged interest u/s 234A, u/s 2348, u/s 2340 and u/s 234D and Interest withdrawn u/s 244A as per IINS 150 issued which is part of this order. As the assessee has not complied with the provisions of section 44AA and 44AB therefore penalty proceedings u/s 271A and 271B are being initiated. Penalty proceedings u/s 271(1)(c) are initiated for concealment and furnishing of inaccurate particulars in respect of income. Notice u/s 274 r.w 271(1)(c) issued.
Necessary forms and demand notice issued.”
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6. As is available from the relevant portions extracted above, from the assessment order pertaining to quantum proceedings, it is obvious that the Assessing Officer nowhere recorded satisfaction that it was a case of violation of provisions of section 269T of the Act, calling for initiation of penalty proceedings u/s 271E of the Act.
7. In Jai Laxmi Rice Mills Ambala City’s case (supra), Hon’ble Apex
Court, while dealing with penalty order u/s 271E of the Act, observed that in the fresh assessment order, no satisfaction was recorded regarding penalty proceedings u/s 271E of the Act, and that the Assessing Officer had expressed therein only for initiation of penalty proceedings u/s 271(1)(c) of the Act. Accordingly, it was held that the penalty levied u/s 271E of the Act could not be levied without recording of satisfaction in the assessment order as regards penalty under section 271E of the Act.
While applying the decision in Jai Laxmi Rice Mills Ambala City’s case (supra) to the present appeal, it is held that the Assessing Officer having not recorded satisfaction that it was a case calling for initiation of penalty proceedings u/s 271E of the Act, the penalty order dated
29.06.2018 deserves to be set aside. For the same reasons, the impugned order passed by the learned CIT(A) also deserves to be set aside.
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8. In view of the above findings, this appeal is hereby allowed and the impugned order passed by Learned CIT(A), NFAC upholding the penalty order u/s 271E of the Act, is hereby set aside.
File be consigned to the record room after the needful is done by the office.
Order pronounced in the open court on 16/01/2025. ¼jkBkSM+ deys'k t;UrHkkbZ ½
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(RATHOD KAMLESH JAYANTBHAI)
(NARINDER KUMAR) ys[kk lnL; @Accountant Member U;kf;d lnL;@Judicial Member
Tk;iqj@Jaipur fnukad@Dated:- 16/01/2025
*Santosh
आदेश की प्रतिलिपिअग्रेf’ात@ब्वचल वf जीम वतकमत वितूंतकमक जवरू
1. The Appellant- Sh. Anil Sharma, Jaipur.
2. izR;FkhZ@ The Respondent- ITO, Ward-1(3), Jaipur.
3. vk;dj vk;qDr@ The ld CIT
4. विभागीय प्रतिनिधि] आयकर अपीलीय अधिकरण] जयपुर@क्त्ए प्ज्Aज्ए Jंपचनत
5. xkMZ QkbZy@ Guard File ITA No. 1480/JPR/2024) vkns'kkuqlkj@ By order,
सहायक पंजीकार@Aेेजज. त्महपेजतंत