MARK STEPHEN LEWIS,MUMBAI vs. COMMISSIONER OF INCOME-TAX (APPEALS), NATIONAL FACELESS APPEAL CENTRE-NFAC

All the grounds raised by the assessee are interconnected and interrelated and relates to challenging the order of the CIT(A) in upholding the order of the AO passed under Section 271D of the Income Tax Act. Therefore, we have decided to adjudicate these grounds through the present consolidated order. 1

We have heard the counsels for both parties, perused the material placed on record, the judgments cited before us, and the order passed by the Revenue Authorities. From the records, we noticed that the penalty in the present case was imposed under Section 271D of the Income Tax Act of Rs. 1 lakh for the alleged violation of Section 269SS of the Act.

During the course of assessment, the AO found that the assessee had sold an immovable property for Rs. 30 lakh, while the stamp duty value was Rs. 77,97,000. In his submissions, the assessee admitted to have received Rs. 1 lakh in cash as part of the sale consideration during the year under consideration. Therefore, after providing an opportunity of hearing, the order of penalty was passed, as the assessee could not demonstrate any reasonable cause for accepting Rs. 1 lakh in cash.

Even before us, the assessee has only furnished a general and casual defence by stating that the amount received by the assessee in cash from the buyer was on account of an emergency and that the said purchaser requested the assessee to accept the part payment in cash, as the purchaser wanted to register and execute the agreement urgently. This explanation furnished by the assessee does not disclose any reasonable cause at all, as no corroborative evidence was furnished to substantiate the alleged urgency.

Moreover, in the case of Triumph International Finance Media Limited vs. ACIT, 345 ITR 270 (Bombay), the provisions of Section 269SS were held to be mandatory and the element of bona fide intention does not absolve the assessee from liability unless reasonable cause within the meaning of Section 273B of the Income Tax Act is demonstrated.

Apart from this, the Hon'ble Supreme Court, in the case of ADIT vs. Kumari A.B. Shanthi, [2002] 255 ITR 258 (SC), has upheld the constitutional 2 validity of Sections 269SS and 271D by observing that these provisions were enacted to curb the menace of black money and unaccounted transactions. Further, it was held by the Hon'ble Supreme Court that ignorance of law or convenience cannot constitute a reasonable cause.

On the other hand, the decisions relied upon by the assessee are not applicable to the facts and circumstances of the case, as, in our view, the assessee has failed to demonstrate any reasonable cause for accepting the amount in cash in violation of Section 269SS of the Act.

Therefore, we find no reason to interfere with the orders passed by the learned CIT(A), as even otherwise, no new facts or circumstances have been brought before us in order to controvert or reverse the findings given by the CIT(A). Consequently, the grounds raised by the assessee stand dismissed and the order passed by the learned CIT(A) stands upheld.

In the result appeal filed by the assessee stands dismissed.