आदेश/ORDER 

PER S.S. VISWANETHRA RAVI, JM:

This appeal by the assessee against order dated 04.09.2025 passed by the Commissioner of Income Tax (Appeals)/National Faceless Appeal Centre, Delhi [hereinafter in short “Ld. CIT(A)”] for the A.Y. 2016-17.

2. The Learned Authorised Representative, Shri C. Subrahmanyam, CA (hereinafter in short “Ld.AR”), prayed to take up Ground No. 3 raised in Form No. 36 along with the Additional Ground Nos. 3 & 4 as a preliminary issue, as the Ground No. 3 in Form No. 36 was not raised before both the Authorities below. He seeks leave of this Tribunal to admit and adjudicate Ground No. 3 in the interest of justice.

3. The Learned Departmental Representative, Shri CVA Rama Rao, Sr.AR (hereinafter in short “Ld. DR”) reported no objection.

4.Ld.AR submits that the Ground No. 3 raised by the assessee challenging the penalty initiated by the A.O under section 271D of Income-tax Act, 1961 (in short “Act”) and consequentially penalty imposed thereon is without jurisdiction and not legally valid in the eyes of law. He refers to the A.O order dated 06.09.2018 and submits that the A.O recorded only initiation of penalty proceedings under section 271(1)(c) of the Act for alleged concealment of particulars of income in Para No.3. He argued vehemently that nowhere in the Assessment Order the A.O recorded his satisfaction relating to initiation of penalty proceedings under section 271D of the Act and further argued the very notice issued under section 271D of the Act and consequential penalty order is not justified in the absence of any satisfaction in the Assessment Order. He drew our attention to the Paper Book consisting of 43 pages and referred to order of this Tribunal in the case of Kosanam Rama Rao v. ACIT in ITA No. 226/VIZ/2025 dated 18.07.2025 at page No. 16 of the Paper Book. He referred to the Ground No. 3 raised therein in internal Page No. 2 and submits that the said ground is similar to the Ground No. 3 raised in the present case. Further, he drew our attention to Para No. 10 of the said order and submits that this Tribunal by placing reliance on the decision of Hon’ble Supreme Court in the case of CIT v. Jai Laxmi Rice Mills Ambala City (2015) 379 ITR 521 (SC), Grandhi Sri Venkata Amrendra v. JCIT in CWP No. 32872/2023 dated 04.10.2024 of Hon’ble High Court of Andhra Pradesh; and Shrinivasa Reddy Reddeppagari v. JCIT in WP No. 44285 of 2022 dated 26.12.2022 of Hon’ble High Court of Telangana, quashed the penalty imposed under section 271D of the Act for not recording satisfaction regarding initiation of penalty proceedings under section 271D of the Act. He argued that the facts and circumstances in the present case are similar to the facts in the case of Kosanam Rama Rao v. ACIT (supra) and submits by following the same, quash the penalty imposed by the Addl./JCIT vide order dated 22.02.2022.

5.Ld. DR, Shri CVA Rama Rao, Sr.AR, submits that Respondent-Revenue (Department) did not accept the order passed by the Tribunal in the case of Kosanam Rama Rao v. ACIT (supra) and preferred an appeal before Hon’ble High Court of Andhra Pradesh. Further, the Respondent-Revenue (Department) is also not satisfied with the decision of the Hon’ble High Court of Andhra Pradesh in the case of Grandhi Sri Venkata Amrendra v. JCIT (supra) and filed an appeal (SLP) before the Hon’ble Supreme Court. The decision of the Hon’ble High Court of Andhra Pradesh and order of this Tribunal are not binding on Respondent-Revenue (Department) as same were not acceptable. Further, he submits that the facts and circumstances in the case of CIT v. Jai Laxmi Rice Mills Ambala City (supra) are distinguishable. Further, he submits that in the case of CIT v. Jai Laxmi Rice Mills Ambala City (supra) the Hon’ble Supreme Court quashed the penalty proceedings as not maintainable as there was no satisfaction by the A.O in the set-aside proceedings. In the original assessment proceedings, there was clear satisfaction by the A.O in initiation the p