MALECKUNNEL PHILIP VARGHESE,SAMBALPUR vs. THE DEPUTY COMMISSIONER OF INCOME TAX, CENTRAL CIRCLE, SAMBALPUR, SAMBALPUR

ITA 256/CTK/2025Status: DisposedITAT Cuttack12 August 2025AY 2017-181 pages
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What did the Tribunal hold?

The Tribunal noted that the Supreme Court in the case of Jai Laxmi Rice Mills Ambala City held that satisfaction must be recorded by the AO before initiating penalty proceedings under Section 271D or 271E. Following this precedent and decisions of various High Courts, the Tribunal found that no such satisfaction was recorded by the AO in this case.

What were the facts?

The assessee filed two appeals against orders passed by the CIT(A) confirming penalties levied by the AO under Section 271D and 271E of the Income Tax Act for the assessment year 2017-2018. The assessee contended that no satisfaction was recorded by the AO for initiating penalty proceedings, the penalties were barred by limitation, and no cash transactions occurred during the assessment years.

What were the issues?

Whether penalty under Section 271D and 271E of the Income Tax Act can be levied without recording satisfaction by the Assessing Officer in the assessment order.

Which sections of the Income-tax Act were involved?

Section 271D,Section 271E,Section 269SS,Section 271(1)(c)

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Cases cited in this judgment(5)Show list

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Income Tax Appellate Tribunal, CUTTACK BENCH CUTTACK

Before: SHRI GEORGE MATHAN & SHRI RAJESH KUMAR

Hearing: 12/08/2025Pronounced: 12/08/2025

Heard together (2 matters)

ITA No.256/CTK/2025
ITA No.258/CTK/2025

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Per Bench : ITA No.256/CTK/2025 is filed by the assessee against the order dated 28.02.2025, passed by the ld. CIT(A), Bhubaneswar-2 for the assessment year 2017-2018, thereby confirming the penalty levied by the AO u/s.271D of the Act. ITA No.258/CTK/2025 is filed by the assessee against the order dated 04.03.2025, passed by the ld. CIT(A), Bhubanesw

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