ITAT Delhi deleted penalties under Sections 271D and 271E for delayed reference after assessment completion, citing CBDT circulars.
ITAT Deletes Cash Loan Penalties for Delayed CPC Reference
ITAT Delhi deleted penalties under Sections 271D and 271E for cash loans and unreported borrowings where the penalty proceedings were initiated after the assessment was finalized, violating CBDT Office Memorandum No. 12/2018.
The department had issued post-assessment penalty notices based on data from centralized systems. The Tribunal held that initiating penalty proceedings after assessment breach procedural fairness, especially where the assessee had no opportunity to rebut during scrutiny. The CBDT’s guidance mandates contemporaneous reference.
This decision enforces internal revenue procedure and protects taxpayers from retrospective penalty imposition. Practitioners should monitor timing of penalty triggers and cite CBDT instructions to challenge delayed proceedings.
