Loading judgment…
Facts
A penalty of Rs. 14 lakhs was levied under Section 271D for accepting cash during the sale of immovable property, in alleged violation of Section 269SS of the Income Tax Act, 1961. The assessee contended that the cash was received at the time of registration due to the seller's insistence, and prior Tribunal decisions held that Section 269SS does not apply to sale consideration received at registration. The Ld. CIT(A) upheld the penalty, leading to the present appeal.
Held
Following its consistent view and that of other benches, the Tribunal held that Section 269SS does not apply to sale consideration received at the time of registration of a property, as it refers only to sums received as advance or otherwise. Therefore, it found no violation of Section 269SS and directed the Assessing Officer to delete the penalty levied under Section 271D.
Key Issues
Whether the acceptance of cash as sale consideration for immovable property at the time of registration constitutes a violation of Section 269SS of the Income Tax Act, 1961, warranting a penalty under Section 271D.
Sections Cited
269SS, 271D
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, VISAKHAPATNAM BENCH, VISAKHAPATNAM
Before: SHRI K.NARASIMHA CHARY & SHRI S. BALAKRISHNAN
आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 27/09/2024 passed by the learned Commissioner of Income Tax (Appeals), Na�onal Faceless Appeal Centre, Delhi (“Ld. CIT(A)”), in the case of Appalaswamy Gorle (“the assessee”), assessee preferred this appeal. 2. Brief facts are that in this case a penalty of Rs. 14 lakhs was levied U/s. 271D of the Income Tax Act, 1961 (“the Act”) on the ground that the assessee accepted cash amoun�ng to Rs. 14 lakhs during the sale of immovable property, in viola�on of the provisions of sec�on 269SS of the Act.
Assessee pleaded before the First Appellate Authority that the en�re sale considera�on was received at the �me of registra�on of the document itself before the Sub-Registrar, since the seller insisted for cash payments. Assessee placed reliance on the view taken by the Coordinate Bench of the Tribunal in the case of Katasani Thirupal Reddy vs. ITO in (AY 2016-17), dated 05/07/2024 and pleaded that sec�on 269SS of the Act is not violated and therefore, sec�on 271D of the Act cannot be invoked. Ld. CIT(A), however, referred to sec�on 269SS of the Act and held that the assessee received the cash in viola�on of the provisions of sec�on 269SS of the Act and thereby penalty is jus�fiable. Hence this appeal by the assessee.
Learned Authorized Representa�ve (“learned AR”) submi�ed that sec�on 269SS of the Act has no applica�on to the facts of this case inasmuch as the specified sum as defined in sec�on 269SS of the Act and in view of the consistent view taken by various Benches of the Tribunal, it does not include sale considera�on or the final payment at the �me of registra�on of the sale deed, therefore, it refers only to the sums received as advance or otherwise. He placed reliance on the view taken by the Coordinate Bench of the Tribunal in the case of ITO vs. Shri R. Dhinagharan (HUF), dated 28/12/2023, and Katasani Thirupal Reddy (supra) 5. Learned Departmental Representa�ve (“learned DR”) vehemently relied on the orders of the Authori�es below.
Issue involved in this appeal is no longer res integra and is clearly covered by the view taken by the Tribunal in the cases of R. Dhinagharan (supra) and Katasani Thirupal Reddy (supra). In the present case, the total sale considera�on is Rs. 14 lakhs and the sale deed clearly shows that the en�re sale considera�on was paid before the Registra�on Authori�es.
Page 2 of 3 Following the view taken by this Bench (supra), we hold that there is no viola�on of sec�on 269SS of the Act and consequently, no penalty could be levied U/s. 271D of the Act. Therefore, we direct the Assessing Officer to delete the penalty. 7. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on the 09th January, 2024.