AJAHAR ALI,LUCKNOW vs. JCIT RANGE-3,, LUCKNOW

ITA 381/LKW/2024Status: DisposedITAT Lucknow30 September 2026AY 2017-186 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the impugned penalty proceedings were initiated based on an incorrect appreciation of facts, without duly verifying the actual nature and mode of receipt of sale consideration. The assessee had placed documentary evidence, including a certificate from the purchaser (M/s. Manas India Projects Pvt. Ltd.), confirming that Rs. 12,74,100/- remained outstanding and was subsequently paid through banking channels. The Revenue failed to produce any cogent material to rebut this evidence or establish that the amount was indeed received in cash. The AO had accepted that a major portion of the sale consideration was received through banking channels and ought to have inquired about the outstanding sum from the seller, which was not done. Therefore, in the absence of material evidence clearly establishing a cash transaction for the disputed amount, the penalty under section 271D could not be sustained. The Tribunal directed the AO to delete the penalty of Rs. 12,74,100/-. The grounds raised in the appeal were allowed.

What were the facts?

The assessee, Ajahar Ali, is in appeal against the order of the Commissioner of Income-tax (Appeals)/NFAC, Delhi, dated 25.04.2024, for assessment year 2017-18. The Assessing Officer (AO) initiated penalty proceedings under section 271D of the Income-tax Act, 1961, for an alleged contravention of section 269SS. The AO alleged that the assessee received Rs. 60,50,000/- in cash towards the sale consideration of agricultural land from M/s Manas India Projects Private Limited. The AO imposed a penalty of Rs. 12,74,100/-, which was the difference between the alleged cash consideration and Rs. 47,75,900/- received through cheque. The CIT(A) sustained the penalty. The assessee is now before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the levy of penalty of Rs. 12,74,100/- under section 271D of the Income-tax Act, 1961, is valid, when the authorities below have not brought any evidence on record to support the finding that the assessee had taken or accepted the specified sum in cash in contravention of section 269SS? Assessee's contentions: The initiation of penalty proceedings is bad in law as there was no satisfaction recorded by the AO regarding the alleged cash receipt. No evidence supports the AO's finding of cash receipt. The amount of Rs. 12,74,100/- was not received in cash but was outstanding and subsequently paid through banking channels, as confirmed by a certificate from the purchaser. Reliance was placed on Shri Umakant Sharma vs JCIT, Laxmilal Badolia vs The NFAC Delhi, Vijayaben G. Zalavadia vs Joint Commissioner of Income-tax, and CIT vs Standard Brands Ltd. Revenue's contentions: The Learned Departmental Representative opposed the assessee's submissions and supported the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 271D,Section 269SS,Section 274

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, LUCKNOW BENCH “A”, LUCKNOW

Before: SHRI KUL BHARAT & SHRI NIKHIL CHOUDHARY

PER KUL BHARAT, VICE PRESIDENT.: This appeal, filed by the assessee, is directed against the order of the Learned Commissioner of Income-tax (Appeals)/National Faceless Appeal Centre (NFAC), Delhi dated 25.04.2024 pertaining to the assessment year 2017-18. The assessee has raised the following grounds of appeal: - “1. BECAUSE the Id. "CIT(A)" has erred in law and on facts in upholding the levy of penalty of Rs. 12,74,100/- u/s 271D of

The order continues below.

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