MOHD. ASLAM,DELHI vs. ACIT, RANGE-63 , DELHI

PER SUDHIR KUMAR, JM:

This appeal by the assessee is directed against the order of National Faceless Appeal Centre Delhi, [hereinafter referred to as “NFAC”], vide order dated 21.08.2025 pertaining to A.Y.
2017-18 and arises out of the penalty order dated 23-11-2019
passed by the Assessing Officer under Section 271D of the Income Tax Act, 1961 [hereinafter referred as ‘the Act’].
2. The assessee has raised the following grounds of appeal:

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1. That the penalty order passed by the Assessing officer u/s 271D of the I. Tax Act, 1961 as upheld by the Ld. CIT(A), was perverse to the law and to the facts of the case therefore not tenable, as not in consonance of the provisions of law contained u/s 269SS Explanation –(iv) of the Income Tax Act,1961. 2.That the penalty order passed as has been upheld by the Ld. CIT(A), was further incorrect under the law and to the facts of the case, because no satisfaction if any has ever been recorded by the Assessing Officer prior to recommend the case to the Addl. CIT for the levy of penalty u/s 271D of the Income Tax Act,1961 vide letter dated 26-04-2019. 3.That the penalty order passed by the Assessing officer u/s 271D of the I. Tax Act, 1961 on 23-11-2019, as upheld by the Ld. CIT(A), was further incorrect under the law and to the facts of the case because in the hands of other co- owner Mohd. Adil, who has jointly sold the property along with the appellant no penalty if any has ever been initiated or imposed on the identical facts.
4. That the penalty order passed by the Assessing officer u/s 271D of the I. Tax Act, 1961 as upheld by the Ld.
CIT(A), was further incorrect under the law and to the facts of the case, as the appellant was prevented by reasonable and sufficient cause to sell the said property owned jointly immediately at that time due to requirement of find for medical emergencies.

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5. That the penalty order passed by the Assessing officer u/s 271D of the I. Tax Act, 1961 as upheld by the Ld.
CIT(A), are further against the principals of law and natural justice, as such not tenable.
6. That the appellant assails his right to amend, alter or change any grounds of appeal at any time even during the course of hearing of this instant appeal.
3. The brief facts of the case are that the assessee had filed his return of income for A.Y.2017-18 declaring total income of Rs. 8,63,710/-. The assessee also declared Long Term Capital
Loss of Rs.4,90,146/-against total sale consideration of Rs.11,50,000/- from other sources. However, the Assessing
Officer has noticed that assessee had sold an immovable property in Sadar Bazar Delhi to Shri Ajay Kumar for sale consideration of Rs.8,20,000/- which was received in cash.
Accordingly, penalty proceedings was initiated by issuing notice u/s 274 read with section 271D of the Act on 01-05-2019. The Assessing officer levied the penalty of Rs.4,10,000/-u/s 271D of the Act. According to AO the assessee had executed the sale deed through GPA which was executed about five years back from the execution of the sale deed. The sale deed was executed through GPA to save the stamp duty. Aggrieved by the order of the AO the assessee filed the appeal before the NFAC, who vide his order dated 21-08-2025 dismissed the appeal against which the assessee is in appeal before the Tribunal.

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4. The Ld. AR has submitted that the penalty order passed by AO is bad in law because the assessee was not the owner of the aforesaid immovable property. The sale deed was executed by the assessee through General Power Attorney Holder. The General Power Attorney was never cancelled before the execution of the sale deed. It was further stated that the sale can be made through GPA before the cancellation of the GPA.
Reliance is placed on the following decisions:
(i) In the case of Aggarwal Construction Company vs. DCIT,
Circle -1 Bathinda ITA No. 370/Asr/2023 the co-ordinate
Amritsar bench held:
“9.2 At this stage we also refer to the decision of the ITAT Chennai Bench , ( relied upon by the assessee ) , in the case of R. Dhinagharan ( HUF ) ITA No 3329/ CHNY/ 2019 dated 29/12/2023 , where the Hon’ble Bench, in an almost identical set of facts , has discussed the Memorandum explaining the intention of amendment by Finance Bill 2015 , including the definition of “
sum specified ”as per explanation to section 269SS of the Act 61. 10. Relevant portion of the said observation is reproduced below for ready reference:
“In order to curb generation of black money by way of dealings in cash in immovable property transactions, section 269SS of the Income- tax
Act has been amended to provide that no person shall accept from any person any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer of an immovable property (specified sum) otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the 5
amount of such loan or deposit or such specified sum is twenty thousand rupees or more.
54.4 Section 269T of the Income-tax Act has also been amended to provide that no person shall repay any loan or deposit made with it or any specified advance received by it, otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount or aggregate amount of loans or deposits or specified advances is twenty thousand rupees or more. The specified advance shall mean any sum of money in the nature of an :- advance, by whatever name called, in relation to transfer of an immovable property whether or not the transfer takes place.
54.5 Consequential amendments in section 271D and section 271E, to provide penalty for failure to comply with the amended provisions of section 269SS and 269T, respectively, have also been made. 54.6
Applicability: These amendments have taken effect from 1st day of June, 2015. From the above provisions, Memorandum explaining the intention of amendment by Finance Bill, 2015 including the definition of 'sum specified' brought in the Explanation to Section 269SS of the Act, it is clear that the intention for bringing this provision was to curb the generation of black money in real estate prohibiting acceptance or repayment of advance in cash of Rs.20,000/- or more for any transaction in immovable property. This was explained by Hon'ble
Finance Minister while placing the Finance Bill, 2015 in her budget speech highlighting the intention of the amendment that the amendment in Explanation to Section 269SS i.e., 'sum specified' means only

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applicable for advance receivable, whether as advance or otherwise means advance can be in any manner.
Hence, this provision will not apply to the transaction that happens at the time of final payment at the time of registration of sale deed and payment is made before sub-