Loading judgment…
Facts
The assessee sold an immovable property and received ₹.11,00,000/- in cash as part of the sale consideration. The Assessing Officer levied penalty under Section 271D r.w.s. 269SS for accepting cash exceeding the prescribed limit. The CIT(A) confirmed the penalty.
Held
The Tribunal held that since the assessee has filed a rectification petition to modify the sale deed to correct the mention of cash receipt and has undertaken to provide the rectification order, the matter should be remanded to the Assessing Officer for fresh consideration after the rectification order is received.
Key Issues
Whether the penalty levied under Section 271D for violation of Section 269SS is justified when the assessee claims the mention of cash in the sale deed was an error and is seeking rectification.
Sections Cited
271D, 269SS, 147, 148, 143(3)
AI-generated summary — verify with the full judgment below
Before: Shri S.S. Viswanethra Ravi&
Year: 2019-20 Mohamed Ali Julaikabi, Vs. The Income Tax Officer, 29/26, Dharmanagar III CRO Ward 1(2), Suramangalam, Salem 636 005. Salem. [PAN:ALOPJ8296J] (अपीलाथ�/Appellant) (��थ�/Respondent) अपीलाथ� की ओर से / Appellant by : Shri T.S. Lakshmi Venataraman, F.C.A. ��थ� की ओर से/Respondent by : Ms. V. Supraja, Addl.CIT सुनवाई की तारीख/ Date of hearing : 16.07.2025 घोषणा की तारीख /Date of Pronouncement : 17.07.2025 आदेश /O R D E R PER S.S. VISWANETHRA RAVI, JUDICIAL MEMBER:
This appeal filed by the assessee is directed against the order dated 18.03.2025 passed by the ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre [NFAC], Delhi for the assessment year 2019-20.
The assessee raised 6 grounds of appeal amongst which, the only issue emanates for our consideration as to whether the ld. CIT(A) is justified in confirming the penalty levied under section 271D of the Income Tax Act, 1961 [“Act” in short] in the facts and circumstances of the case.
Brief facts emanating from record are that as per information received by the Department, the assessee sold an immovable property during the FY 2018-19 for a sale consideration of ₹.35,00,000/-. During the course of penalty proceedings, the Assessing Officer noted that the assessee received cash of ₹.11,00,000/- as sale consideration of the property sold by the assessee on 03.05.2018 for value of ₹.35,00,000/- . Since the assessee violated the provisions of section 269SS of the Act by accepting the cash more than prescribed limit, the Assessing Officer issued notice under section 271D r.w.s. 269SS of the Act dated 07.01.2021. After considering the submissions of the assessee and in view of the provisions of section 269SS of the Act, the Assessing Officer levied penalty of ₹.11,00,000/- under section 271D for violation of the provisions of section 269SS of the Act. On appeal, the ld. CIT(A) rejecting the reasons for the delay of 15 days in filing the appeal, confirmed the penalty levied under section 271D of the Act. On being aggrieved, the assessee is in appeal before the Tribunal.
The ld. AR Shri T.S. Lakshmi Venkataraman, F.C.A. drew our attention to the written submissions, wherein, the assessee furnished bifurcation of sale consideration of immovable property transacted through banking channel with bank account numbers, cheque numbers, etc. and submits that the entire transactions are made through banking channel and there is no cash transaction involved. He further submits that the Assessing Officer levied penalty only on the ground that in the sale deed dated 03.05.2018, a sum of ₹.11,00,000/- was mentioned as in cash and inadvertently mentioned as “settled through cash”. The ld. AR further submits that the assessee filed a rectification petition before the SRO for modification of the sale deed and prayed that the matter may be remanded to the file of the Assessing Officer for fresh consideration.
The ld. DR Ms. V. Supraja, Addl. CIT relied on the order passed by the ld. CIT(A).
Heard both the parties and perused the material available on record. The Assessing Officer levied penalty under section 271D of the Act in contravention of section 269SS of the Act by treating ₹.11,00,000/- as sale consideration received by cash mentioned in the sale deed, which was confirmed by the ld. CIT(A). From the reply of the assessee, reproduced in para 2 of the penalty order, we note that the assessee contended that no cash transaction of ₹.11,00,000/- involved in the sale of immovable property on 03.05.2018 and also stated that it was wrongly typed as cash received. We note that before the ld. CIT(A), the assessee furnished bifurcation of sale consideration of immovable property which is transacted through banking channel with bank account numbers, cheque numbers, etc., submitted that the entire transactions are made through banking channel and there is no cash transaction involved and the above submissions are reproduced at page 11 to 13 of the impugned order. The ld. AR drew our attention to the copy of rectification petition filed before the SRO for modification of the sale deed and the same is still pending, which is affirmed vide notarized affidavit deposed by the assessee. Since the assessee undertakes to file rectification order of the SRO by modifying the sale deed, and other details as may be called for etc., we deem it proper to remand the matter to the file of the Assessing Officer to wait till the receipt of rectification order of the SRO and thereafter decide the issues on merits in accordance with law after considering the submissions of the assessee as may be filed. The assessee is also directed to furnish all details before the Assessing Officer without fail. Thus, the ground raised by the assessee is allowed for statistical purposes.
In the result, the appeal filed by the assessee is allowed for statistical purposes. Order pronounced on 17th July, 2025 at Chennai.