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Facts
The assessee received Rs. 11,76,000/- in cash for the sale of an immovable property, violating Section 269SS of the Income Tax Act. The Assessing Officer consequently imposed an equal penalty under Section 271D, which the CIT(A) upheld due to the assessee's failure to respond to notices.
Held
The Tribunal, noting the assessee's non-compliance but also the substantial penalty and the request for an opportunity, decided to grant a final chance for substantiation. The case was remanded back to the CIT(A) for fresh adjudication, with the expectation of full cooperation from the assessee.
Key Issues
The key issue was the justification of the penalty under Section 271D for contravening Section 269SS, particularly given the CIT(A)'s ex-parte decision due to the assessee's non-response to notices.
Sections Cited
269SS, 271D
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, VISAKHAPATNAM “DIVISION” BENCH, VISAKHAPATNAM
Before: SHRI DUVVURU RL REDDY, HON’BLE & SHRI S BALAKRISHNAN, HON’BLE
आदेश /O R D E R
PER SHRI S BALAKRISHNAN, ACCOUNTANT MEMBER:
This appeal is filed by the assessee against order of Learned Commissioner of Income Tax (Appeals), National Faceless Appeal centre, Delhi [hereinafter in short “Ld.CIT(A)”] vide DIN & Order No. ITBA/NFAC/S/250/2024-25/1074643605(1) dated 18.03.2025 for the I.T.A.No.366/VIZ/2025 Gurubilli Veera Raghavamma A.Y.2016-17 arising out of the order passed under section 271D of Income Tax Act, 1961 (in short ‘Act’) dated 01.04.2022.
Brief facts of the case are that, assessee is an individual, based on the assessment proceedings in the case of Sri Gurubilli Venkata Durga Naga prasad Rao for the A.Y. 2017-18, it is noticed that assessee has sold an immovable property vide document no. 4619/2015 (SRO, Pithapuram) 29.07.2015 for a consideration of Rs. 11,.76,000/- and the consideration was received in cash. As acceptance of cash is in contravention to the provisions of section 269SS of the Act, Ld. Assessing Officer [hereinafter in short “Ld. AO"]issued notice dated 11.02.2021 requiring the assessee to explain why the penalty under section 271D of the Act could not be imposed. In response, assessee furnished her reply. Not convinced with the submissions and documents furnished by the assessee, Ld.Assessing Officer [hereinafter in short “Ld. AO"] completed the assessment by observing that assessee committed a default within the meaning of section 269SS and thereby imposed penalty under section 271D of the Act equal to the cash receipt i.e. Rs.11,76,000/-.
3. On being aggrieved by the order of the Ld. AO, assessee filed an appeal before Ld. CIT(A). Ld. CIT(A) upheld the order of the Ld. AO since assessee has not responded to any of the notice / opportunities provided to the assessee.
Page. No 2
I.T.A.No.366/VIZ/2025 Gurubilli Veera Raghavamma 4. On being aggrieved by the order of the Ld. CIT(A), assessee is in appeal before us by raising following grounds of appeal: -
1. The order of the learned Commissioner of Income Tax (Appeals) is contrary to the facts and also the law applicable to the facts of the case.
2. The learned Commissioner of Income Tax (Appeals) is not justified in dismissing the appeal ex-parte without discussing the merits of the case.
The learned Commissioner of Income Tax (Appeals) ought to have considered the submissions made by the appellant before the assessing officer and cancelled the penalty of Rs.11,76,000 levied u/s 271D of the Act.
Any other ground that may be urged at the time of appeal hearing.”
At the outset, Ld. Authorised Representative [hereinafter “Ld.AR”] submitted that the Ld. CIT(A) has passed the order without providing sufficient opportunities to the assessee. He further pleaded that the assessee could not respond to the notices issued by the Ld. CIT(A). He therefore prayed for one final opportunity before Ld. CIT(A) to submit the relevant documents.
Per contra, Ld. Departmental Representative [hereinafter in short “Ld.DR”] strongly objected to theplea of the Ld.AR and vehemently argued that revenue has provided ample opportunities to the assessee as detailed in their respective orders. However, assessee has failed to comply with the notices issued by the Revenue Authorities. She therefore pleaded that the no further opportunity should be granted and prayed of upholding the order of the Ld.CIT(A).
Page. No 3
I.T.A.No.366/VIZ/2025 Gurubilli Veera Raghavamma 7. We have heard rival contentions and perused the material available on record. It is an undisputed fact that the assessee has not fully complied with the notices and has also not responded to the various notices issued to the assessee as detailed in the order of the Ld. CIT(A). In the interest of natural justice, considering the plea of the Ld.AR and considering the huge demand, we are of the considered view that assessee may be provided one final opportunity to substantiate the case before Ld. CIT(A). Needless to say, that the assessee should cooperate with the remand proceedings without seeking unnecessary adjournments, failing which the Ld. CIT(A) is at liberty to decide the case based on the material available on record. Accordingly, the grounds raised by the assessee are statistically allowed.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open court on 28th August, 2025.