SHRI ONKAR SONI,MANDI vs. JCIT, RANGE, MANDI

आदेश/Order

The present appeal has been preferred by the assessee against the order dated 22.01.2019 of the Commissioner of Income Tax (Appeals), Palampur [hereinafter referred to as ‘CIT(A)’].

ITA No. 396-CHD-2019- Shri Onkar Soni, Mandi 2 2. That the Ld. CIT(A) has erred in law & facts of the case in upholding the penalty imposed u/s 271D amounting to Rs. 7,00,000/.- which is highly unjustified and uncalled for.

action of the Ld. CIT(A) in confirming the levy of penalty of Rs. 7

lacs levied by the Assessing Officer u/s 271D of the Income Tax Act,

1961 (in short 'the Act').

It is pertinent to mention here that earlier the assessee had

preferred appeal before the Tribunal against the order of CIT(A) dated

27.1.2017 agitating the confirmation of levy of impugned penalty. The

Tribunal vide order dated 11.8.2017 remanded the matter back to the file

of the CIT(A) for decision afresh. The Ld. CIT(A) again confirmed the

penalty so levied by the Assessing Officer vide impugned order dated

22.01.2019, hence, the assessee is again in appeal before this Tribunal.

attention to the provisions of section 269SS of the Act, as were

applicable for the assessment year under consideration, allegedly in

violation of which the Assessing Officer has levied the impugned

penalty. The Ld. Counsel for the assessee has submitted that the

assessee had received amount of Rs. 7 lacs, in cash, as against advance

for the sale of property. That subsequently section 269SS of the Act

ITA No. 396-CHD-2019- Shri Onkar Soni, Mandi 3 making prohibition for receipt of advance against property has been

introduced w.e.f. 1.6.2015. That prior to 1.6.2015, there was no

prohibition in receiving advances in cash against sale of property. The

Ld. Counsel has further invited our attention to the statement dated

27.11.2009 of the payer namely Shri Ram Pal Malik recorded by the

Assessing Officer during the assessment proceedings. In his statement

Shri Ram Pal Malik has duly confirmed that he had paid the amount of

Rs. 7 lacs for purchase of property to the assessee. Even the copy of the

agreement to sell duly notarized by the Notary Public was also produced

before the Assessing Officer. The Assessing Officer considering the

statement of Shri Ram Pal Malik, which was corroborated with the copy

of agreement to sell dated 1.2.2007, did not make any addition into the

income of the assessee in this respect. However, later on, the penalty

proceedings u/s 271D of the Act have been initiated by the JCIT

treating the said amount as loan received in cash and he accordingly

held that the assessee had violated the provisions of section 269 SS of

the Act and thereby imposed penalty u/s 271D of the Act.

the assessee had duly proved the factum of receipt of the aforesaid

money in cash as advance against the sale of property and also pleaded

that the sale deed of the property, however, was effected in the name of

the father of payer namely Shri Sunder Lal. He also produced the copy

of the sale deed in this respect. However, the Ld. CIT(A) did not agree

with the contention of the assessee observing that there was a long delay

ITA No. 396-CHD-2019- Shri Onkar Soni, Mandi 4 between the date of receipt of money in the year 2007 and the execution

of sale deed in the year 2014.

Representatives of both the parties. The fact which emerges from the

file is that there is no denial or rebuttal of execution of agreement to

sell by the assessee with Shri Ram Pal Malik corroborated with the

statement of Shri Ram Pal Malik recorded on 27.11.2009 by the

Assessing Officer during assessment proceedings. It is also an important

fact on the file that the Assessing Officer did not doubt the veracity of

the statement of Shri Ram Pal Malik and, therefore, did not make

addition either to the income of the assessee or into the income of Shri

Ram Pal Malik in respect of the said amount of Rs. 7 lacs received by

the assessee in cash from Shri Ram Pal Malik. Shri Ram Pal Malik

duly confirmed in his statement that the said amount was given by him

in cash to the assessee as advance against sale of property. Penalty

proceedings u/s 271D of the Act were initiated much after i.e. in the

year 2014 by the JCIT, hence, it cannot be said that the said

agreement to sell or the averments made in the statement recorded of

Shri Ram Pal Malik on 27.11.2009 was an afterthought or afterwards

created evidences. Since the assessee has duly established, even prior to

the initiation of penalty proceedings about the transaction of receipt of

advance in cash against the sale of property and there was no provision

of section 269SS in the statute, as it stood during the relevant period.

ITA No. 396-CHD-2019- Shri Onkar Soni, Mandi 5 In view of this, there is no justification on the part of the lower

authorities in levying penalty u/s 271D of the Act.

was executed after a long time, in my view, is not relevant as the sale

deed was finally executed or not. One may find many instances where

agreement to sell is executed between the parties but finally for one

reason or the other, the sale deed could not be executed. Since during

the assessment proceedings and prior to the initiation of penalty

proceedings, the assessee had duly proved the execution of agreement to

sell and receipt of advance thereof, hence, in my view, there is no

justification on the part of the lower authorities either in levying or in

confirming the penalty. The same is accordingly ordered to be deleted.

The appeal of the stands allowed.

Order dictated and pronounced in the Open Court immediately on

completion of hearing.

Sd/-

(संजय गग� / SANJAY GARG) �या�यक सद�य/ Judicial Member Dated : 07.11.2019 “आर.के.” आदेश क� ��त�ल�प अ�े�षत/ Copy of the order forwarded to : 1. अपीलाथ�/ The Appellant 2. ��यथ�/ The Respondent 3. आयकर आयु�त/ CIT 4. आयकर आयु�त (अपील)/ The CIT(A) 5. �वभागीय ��त�न�ध, आयकर अपील�य आ�धकरण, च�डीगढ़/ DR, ITAT, CHANDIGARH 6. गाड� फाईल/ Guard File

ITA No. 396-CHD-2019- Shri Onkar Soni, Mandi 6

आदेशानुसार/ By order, सहायक पंजीकार/ Assistant Registrar .