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Income Tax Appellate Tribunal, Hyderabad ‘ B ‘ Bench, Hyderabad
Before: Shri R.K. Panda, Vice- & Shri K. Narasimha Chary
आयकर अपील�य अ�धकरण, हैदराबाद पीठ IN THE INCOME TAX APPELLATE TRIBUNAL Hyderabad ‘ B ‘ Bench, Hyderabad Before Shri R.K. Panda, Vice-President AND Shri K. Narasimha Chary, Judicial Member Assessment Year: 2016-17 Mrs.Snigdha Karthikeyan, Vs. Jt. Director of Income Shrewsbury Tax (International PAN:AIZPR5567J Taxation) Hyderabad (Appellant) (Respondent) Assessee by: Adv. S.P. Chidambaram Revenue by: Smt.Sheetal Sarin, DR Date of hearing: 22/08/2023 Date of pronouncement: 30/08/2023 ORDER
Per R.K. Panda, Vice-President
This appeal filed by the assessee is directed against the order dated 27.09.2022 of the learned CIT (A)-10, Hyderabad relating to A.Y.2016-17.
Although a number of grounds have been raised by the assessee, however, these all relate to the order of the learned CIT (A) in confirming the penalty of Rs.5,92,553/- levied u/s 271D of the I.T. Act.
Facts of the case, in brief, are that information was available with the Department that the assessee received a sum of Rs. 5,92,553/- on 15.07.2015 from Shri Gopal Bahadur Mathur
ITA 657 of 2022 Snigdha Karthikeyan Shrewsbury in property transaction vide sale deed No.10265/2015 registered with Sub-Registrar (IV) Lucknow Sadar (UP). Since the assessee in violation of provisions of section 271D of the Act has accepted Rs. 5,92,553/- in cash on 15.07.2015 , the Assessing Officer initiated penalty proceedings u/s 274 r.w.s. 271D and asked the assessee to explain as to why the penalty u/s 271D should not be levied. The assessee in her response submitted that for facilitation of the sale of the property, the assessee had to travel from Hyderabad to Lucknow and since the buyer had already prepared a DD amounting to Rs.77,72,947/- he accepted the balance amount inr cash for want of time. However, the Assessing Officer did not accept the explanation offered by the assessee and levied penalty of Rs. 5,92,553/- being 100% of the specified sum received in cash.
In appeal, the learned CIT (A) sustained the penalty levied by the Assessing Officer by observing as under:
ITA 657 of 2022 Snigdha Karthikeyan Shrewsbury
Aggrieved with such order of the learned CIT (A) the assessee is in appeal before the Tribunal.
The learned Counsel for the assessee submitted that the entire sale consideration has been disclosed by the assessee and there is no concealment of any part of the transaction. Since the buyer had already purchased a demand draft of Rs. 77,72,947/-, therefore, the assessee received the balance amount of Rs.5,92,553/- in cash since she was required to come back to Hyderabad because she has a small child. He submitted that the provisions of section 271D was amended w.e.f. 1.6.2015 to include the specified sum which in the instant case the cash component of Rs.5,92,553/-. He submitted that the assessee accepted the cash on 15.7.2015 and the amended provision was very new at that time and the assessee was not fully aware of the amended provisions. Referring to a series of decisions, he submitted that the bonafide of the transaction is not in doubt and there was a reasonable cause for accepting the cash and therefore, penalty u/s 271D is not leviable.
The learned DR, on the other hand, heavily relied on the order of the Assessing Officer and the learned CIT (A). She submitted that since the assessee in complete violation of the provisions of section 269SS has accepted cash of Rs.5,92,553/- Page 3 of 6
ITA 657 of 2022 Snigdha Karthikeyan Shrewsbury for sale of the property, therefore, the assessee is liable for penalty u/s 271D of the I.T. Act.
We have heard the rival arguments made by both the sides, perused the orders of the AO and the learned CIT (A) and the paper book filed on behalf of the assessee. We have also considered the various decisions cited before us by both sides. We find the assessee in the instant case has sold a property on 15.7.2015 for Rs.83,65,500/- out of which an amount of Rs. 77,72,947/- was received in the form of DD and the balance amount of Rs.5,92,553/- in cash. Since the assessee received the amount of Rs.5,92,553/- in cash in contravention of the provisions of section 269SS of the I.T. Act, the Assessing Officer, rejecting the explanation given by the assessee, levied penalty of Rs.5,92,553/- u/s 271D being the maximum penalty of 100% of the specified sum received in cash. We find the learned CIT (A) sustained the penalty levied by the Assessing Officer, the reasons of which have already been reproduced in the preceding paragraph. It is the submission of the learned Counsel for the assessee that the assessee had to travel from Hyderabad to Lucknow for registration of the property and since the buyer had already prepared the D.D. of Rs.77,72,947/- and she had to return back to Hyderabad, therefore, she had to accept the balance amount in cash for want of time. It is his submission that there is no intention of causing loss to the Revenue since the assessee has disclosed the entire sales proceeds to tax and there was a reasonable cause for the violation of the provisions of section 271D which was recently introduced.
We find some force in the above argument of the learned Counsel for the assessee. The Finance Act 2015 amended Page 4 of 6
ITA 657 of 2022 Snigdha Karthikeyan Shrewsbury the provisions of section 269SS to include any sum of money receivable whether as advance or otherwise in relation to transfer of an immovable property whether or not the transfer takes place w.e.f. 1.6.2015. The introduction of the provisions was to curb generation of black money by way of dealing in cash in immovable property transactions. The transaction in the instant case took place on 15.7.2015 which is just 1 ½ months of the amendment that took place w.e.f. 1.6.2015. There is no denial of the fact that the assessee has disclosed the entire sale consideration in the return of income and the default in the instant case is merely of a technical or venial in nature. As per the provisions of section 273B, no penalty u/s 271D shall be impossible on the person or the assessee as the case may be for any fault referred to in the said provisions if he/she proves that there was a reasonable cause for the said default. In the instant case, we find the assessee has a reasonable cause for accepting the cash of Rs.5,92,553/- for the reason that the buyer had already prepared a D.D of Rs. 77,72,947/- and the assessee, who was travelling from Hyderabad to Lucknow for registration of the property has to come back at the earliest for which instead of waiting for preparation of the DD of Rs.5,92,553/- she received the cash. Further, the provisions of section 269SS were amended to include the specified sum w.e.f. 1.6.2015 and the registration in the instant case took place on 15.7.2015 which is just 1 ½ months from the date of amendment and therefore, the submission of the learned Counsel for the assessee that the assessee was not aware of the intricacies of tax laws find some force. In this view of the matter, we are of the considered opinion that there was a reasonable cause on the part of the assessee to receive the cash of Rs.5,92,553/- and therefore, the learned CIT (A) was not justified in sustaining the penalty of Rs.5,92,553/- levied by the Assessing Page 5 of 6
ITA 657 of 2022 Snigdha Karthikeyan Shrewsbury Officer u/s 271D of the I.T. Act. Accordingly, the order of the learned CIT (A) confirming the penalty is set aside and the grounds raised by the assessee are allowed.