PRABHAVATIBEN KANTIBHAI TAMBOLI,VADODARA vs. ITO, WARD 1(2)(2), VADODARA

The brief facts of the case are that the assessee along with other co-owners sold a property at a consideration of Rs.27,90,00,000/-. The assessee received his share of the sale consideration at Rs. 1,16,25,000/- as per the sale deed. Apart from this amount, the assessee also received Rs.31,95,813/- as sale proceeds in cash. Though, the assessee, as advised, declared his share of sale consideration as per the sale deed in the return of income, however, did not disclose the amount of sale consideration received in cash. However, the assessee filed a revised return and declared the said cash amount of sale consideration therein.. The AO accepted the revised return, however, levied penalty u/s 271D of the Act for receiving the sale consideration of Rs.31,95,813/- in cash in violation of provision of Section 269SS of the Act. The Ld. CIT(A) confirmed the penalty so levied by the AO.

Before us, at the outset, Ld. Counsel for the assessee submitted that it was duly explained before the lower authorities that the assessee and his family members were agriculturists and were not aware of the relevant provisions of the Act prohibiting acceptance of sale consideration in cash. It was further explained that the assessee and his family members were in dire need offunds, therefore, they collectively decided to sell their ancestral property. The purchasers were willing to purchase the property only if, the assessee and his family members would accept partial amount in cheque and partial amount in cash. Since, the assessee and his family members had no choice, but to accept the partial amount in cash in lieu of sale of the property because they were in dire need of funds, therefore, they acceded to the condition of the purchasers to accept partial amount in cash. That the assessees were not aware that the same would be in any manner a violation of Income Tax Provisions. Ld. AR of the assessee has further submitted that when the assessee and his family members came to know that they were supposed to disclose the entire sale consideration including the amount received in cash, they immediately filed revised return of income, even prior to issue of notice u/s 147 of the Act. The Ld. AR has submitted that the assessee and his family members were under bonafide belief that they have not committed any violation of law in accepting the partial amount in cash out of sale consideration. The Ld. Counsel for the assessee has further brought our attention to the order passed in case of co-sharer, namely, Jayaben Ramanlal Tamboli, PAN No. AFCPT8501L, order dated 25.09.2024, wherein, in identical facts and circumstances, in relation to same transaction of sale of land, penalty proceedings u/s 271D of the Act were initiated by the AO, however, after considering the submissions made by the said co-sharer who had sold the property in question alongwith the assessee, the AO accepted the explanation and noadverse inference was drawn against the said assessee and the penalty proceedings u/s 271D of the Act were dropped. Since, the said case is relating to the same transaction of the sale of the property and since, in the case of co-sharer, the AO has dropped the penalty proceedings u/s 271D of the Act, hence, the case of the assessee being on equal footing and the assessee having explained the reasons for acceptance of small amount in cash out of total sale consideration and duly offered the said sale consideration for taxation, the impugned penalty in the case of the assessee is ordered to be deleted.

In the result, the appeal of the assessee stands allowed.”