ATMA RAM BUILDERS PRIVATE LIMITED, NEW DELHI,NEW DELHI vs. INCOME TAX OFFICER, CENTRAL CIRCLE 5, NEW DELHI, NEW DELHI

ITA 3593/DEL/2025Status: DisposedITAT Delhi16 January 2026Bench: SHRI S. RIFAUR RAHMAN (Accountant Member), SHRI RAJ KUMAR CHAUHAN (Judicial Member)1 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the PCIT cannot direct the initiation of penalty proceedings under Section 271E in the absence of satisfaction recorded by the Assessing Officer in the assessment order. The impugned order of the PCIT was set aside.

What were the facts?

The assessee made a repayment of Rs. 11,00,000/- to M/s. Basic Clothing Pvt. Ltd. otherwise than through prescribed banking channels, as noted in the Tax Audit Report. The PCIT invoked Section 263, holding the assessment order erroneous and prejudicial to revenue for not initiating penalty proceedings under Section 271E.

What were the issues?

Whether the PCIT can direct the initiation of penalty proceedings under Section 271E when the Assessing Officer has not recorded satisfaction for the same in the assessment order.

Which sections of the Income-tax Act were involved?

Section 263,Section 271E,Section 269T

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Cases cited in this judgment(2)Show list

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Income Tax Appellate Tribunal, DELHI BENCH ‘E’: NEW DELHI

Before: SHRI S. RIFAUR RAHMAN & SHRI RAJ KUMAR CHAUHAN

For Appellant: ms. Ank
For Respondent: Ms. Ankush Kalra, Sr.DR
Hearing: 10/12/2025Pronounced: 16/01/2026

PER RAJ KUMAR CHAUHAN (J.M.):

1.

This appeal is directed against the order dated 27.03.25 of PCIT (Central), Delhi-1 under section 263 of the Income Tax Act, 1961 (hereinafter referred to as ‘the Act’) wherein assessment order dated

1 Atma Ram Builders Pvt. Ltd. 31.08.2022 was revised with the direction to the Assessing Officer (‘AO’) to take appropriate action or initiation of penalty proceeding under section 271E of the Act for levy of penalty amounting to Rs. 11,00,000/- for A.Y. 2020-21 for violation of provision of Section 269T of the Act.

2.

The facts in brief as culled out from the order of the authorities below are that the appe

The order continues below.

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