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Facts
The assessee, Rohtash Monga, received a cash advance of Rs. 1,75,000 for an immovable property sale and later refunded the same in cash upon cancellation of the agreement. A penalty of Rs. 1,75,000 was imposed under Section 271E of the Income Tax Act for violating Section 269T by refunding the advance in cash.
Held
The Tribunal observed that the CIT(A), while dismissing the assessee's appeal, erroneously discussed provisions related to Section 271D and 269SS, instead of the applicable Sections 271E and 269T. Consequently, the Tribunal held that it was an inadvertent mistake and decided to remand the case back to the CIT(A) for proper adjudication of the penalty imposed under Section 271E.
Key Issues
Whether the CIT(A) committed an inadvertent error by adjudicating a penalty under Section 271E by discussing sections 271D and 269SS, warranting a remand for proper adjudication under the correct provisions.
Sections Cited
250, 271E, 1961, 143(1), 269T, 271D, 269SS, Rule 34(4)
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, AMRITSAR BENCH, AMRITSAR
Before: SH. UDAYAN DASGUPTA & SH. KRINWANT SAHAY
This appeal is filed by the assessee against the order of ld. CIT(A) National Faceless Appeal Centre (NFAC), Delhi passed u/s 250 of the Income Tax Act, 1961 dated 16.08.2023 against the penalty imposed u/s 271E of the Act, 1961 which has emanated from the order of the Addl. CIT, Range-1, Bathinda dated 12.09.2022 imposing penalty amounting to Rs. 1,75,000/-. of an amount of Rs.1,75,000/- in cash from one Smt. Sneha Goel in lieu of an agreement for sale of immovable property. The assessment for the year has been completed by accepting the returned of income u/s 143(1) of the Act.
It is further observed that the advance received by the assessee against the proposed sale of immovable property has been refunded to the buyer in cash, in lieu of cancellation of the agreement for sale and consequential penalty was initiated on the grounds that specified advance in relation to transfer of immovable property has been refunded in cash which violates the provisions of section 269T of the Act, resulting in imposing of penalty of Rs.1,75,000/- u/s 271E of the Act vide order dated 12.09.2022.
The matter was carried in appeal before the ld. first appellate authority and the ld. first appellate authority has dismissed the appeal by discussing and stating the provisions of section 271D of the Act. It is seen from the appellate order dated 16.08.2023 that at the very first paragraph of the appellate order, the ld. CIT(A) has stated as follows:
“The present appeal arises from the penalty order passed u/s 271D dated 12.09.2022 of the Income Tax Act ('the Act') by Assessing Officer, Range- Bhatinda ('the AO') for the F.Y 2016-17 relevant to the A.Y. 2017-18. The appeal in this case has been filed on 02.11.2022 after service notice of demand 10.10.2022 as mentioned in form no. 35. Notices u/s 250 was issued to the appellant.” of section 271D of the Act. The relevant portion is reproduced as under:
“8. I have carefully considered the facts and circumstances of the case and found that there is no need to interfere the addition made by AO u/s 271D of the IT Act amounting to Rs. 175000/-. Hence the objection raised by appellant is hereby dismissed and addition made by AO is sustained.”
Even in para 9 of the appellate order, the ld. appellate authority has stated as under:
“9. There is violation of provisions u/s 269SS of the Act, accordingly the appellant is liable for imposition of penalty u/s 271D of the Act. The penalty of Rs. 1,75,000/-imposed by the AO is upheld and the grounds of appeal are rejected.”
7. From the above observations, it is seen that the ld. CIT(A) has not decided or adjudicated on the penalty order passed u/s 271E (r.w.s. 269T) and has discussed issues relating to section 271D and 269SS of the Act, which is an inadvertent mistake apparent from the record, because the instant appeal relates to penalty imposed u/s 271E for alleged violation of section 269T of the Act.
As such, we are of the opinion that this matter should be remanded back to the ld. CIT(A) for adjudication on the grounds of appeal contained in the memorandum of appeal in Form No. 35 relating to the penalty imposed u/s 271E of the Act.
The ld. DR has no objection if the matter is remanded back to the ld. CIT(A).
As such, in the interest of justice, we remand the matter back to the files of the ld. CIT(A) for proper adjudication considering the grounds in Form No. 35 and the penalty imposed u/s 271E of the Act.
In the result, the appeal filed by the assessee is allowed for statistical purposes.
Order pronounced in accordance with Rule 34(4) of the Income Tax (Appellate Tribunal) Rules, 1963 as on 29.05.2025.