आयकर अपील(cid:547)य अ(cid:876)धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘A’ Bench, Hyderabad BEFORE SHRI VIJAY PAL RAO, VICE PRESIDENT AND SHRI MADHUSUDAN SAWDIA, ACCOUNTANT MEMBER आ.अपी.सं /ITA No.1505/Hyd/2025 Assessment Year 2017-2018 Somireddy Sudhakar The Income Tax Officer, Reddy, IBRAHIMPATNAM vs. Ward-9(1), PIN -501 506. R R Dist.

Hyderabad.

PAN BGHPS3108R (Appellant) (Respondent)

िनधा१ौरती (cid:554)ारा /Assessee by: Sri Mohd. Afzal, Advocate राज(cid:830) व (cid:554)ारा /Revenue by: Sri Abhinav Pittal, Sr. AR सुनवाई की तारीख/Date of hearing: 12.11.2025 घोषणा की तारीख/Pronouncement: 24.12.2025 आदेश/ORDER PER VIJAY PAL RAO, VICE PRESIDENT :

This appeal by the assessee is directed against the Order dated 22.07.2025 of the learned CIT(A)-National Faceless Appeal Centre [in short “NFAC], Delhi, for the assessment year 2017-2018.

2. The assessee has raised the following grounds: 1. “The order of the learned Commissioner of Income Tax-(Appeals) is against the law, weight of evidence and probabilities of case.

2. The learned Commissioner ought to have appreciated that there is no satisfaction recorded by the AO in respect of violation of 269SS as envisaged in the case of Srinivas Reddy Reddeppagari Vs JCIT WP No.44285/2022, dt: 26.12.2022, by the Jurisdictional High Court of Telangana, therefore, erred in confirming the order of the JCIT levying penalty of Rs.43,50,000/- u/s 271D of the IT Act.

3. The learned Commissioner ought to have appreciated that it is a pre-requisite condition to levy penalty u/s 271D that there must be assessment proceedings in which the violation of 269SS is noticed, in the absence of any assessment proceedings the levy of penalty u/s 271D is bad in law, therefore, the learned CIT erred in confirming the order of the JCIT levying penalty of Rs.43,50,000/-

u/s 271D of the IT Act.

4. The learned Commissioner ought to have appreciated that the time limits for levy of penalty starts from the date on which the AO referred the matter to the JCIT, for initiating proceedings u/s 274 r.w.s 271D and for levy of penalty, in the absence of such a reference no time limits can be determined, therefore, the levy of penalty u/s 271D is bad in law and therefore, the learned Commissioner erred in confirming the order of the JCIT, levying penalty of Rs.43,50,000/- u/s 271D of the IT Act.

5. The learned CIT ought to have appreciated that the seller of the property and the purchaser are agriculturists residing in rural areas, therefore, the provision of section 269SS are not attracted to the assessee, therefore, the learned Commissioner erred in confirming the order of the JCIT, levying penalty of Rs.43,50,000/-

u/s 271D of the IT Act.

6. The learned Commissioner ought to have appreciated that the assessee did not received any notice OR show cause notice initiating the penalty proceedings u/s 271D of the IT Act, thereby the Department violated the principles of natural justice and therefore, learned Commissioner erred in confirming the order of the JCIT, levy penalty of Rs.43,50,000/- u/s 271D of the IT Act.

7. The appellant craves leave to add to, amend OR modify the above grounds of appeal either before OR at the time of hearing of the appeal, if it is considered necessary.

3. Ground no.2 raised by the assessee is legal in nature challenging the validity of the penalty levied u/sec.271D of the Act for want of satisfaction recorded by the Assessing Officer. The learned Authorised Representative of the Assessee has submitted that since there was no pendency of any proceedings except the penalty proceedings u/sec.271D, therefore, there was no scope for recording the reasons/ satisfaction by the Assessing Officer for initiation of penalty u/sec.271D of the Act. The learned Authorised Representative of the Assessee has further submitted that without recording the satisfaction by the Assessing Officer, the penalty u/sec.271D cannot be initiated /levied. In support of his contention, he has relied upon the CBDT Cir