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Facts
The assessee sold a property for Rs. 68,00,000/- on 01.03.2017, out of which Rs. 9,60,000/- was received in cash. The authorities below held this to be a violation of Section 269SS of the Income Tax Act, attracting penalty under Section 271D.
Held
The Tribunal noted that the assessee did not get an opportunity to demonstrate reasonable cause for the default. In the interest of justice, the Tribunal decided to grant one more opportunity to the assessee to present their case before the AO.
Key Issues
Whether the cash receipt of sale consideration of immovable property violates Section 269SS and attracts penalty under Section 271D, and if a reasonable cause for default can be considered.
Sections Cited
269SS, 271D, 273B, 250
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Income Tax Appellate Tribunal, “C’’BENCH: BANGALORE
Before: SHRI WASEEM AHMED & SHRI KESHAV DUBEY
PER KESHAV DUBEY, JUDICIAL MEMBER:
This appeal at the instance of the assessee is directed against the order of CIT(A)/NFAC dated 17.4.2024 vide DIN & Order No.ITBA/NFAC/S/250/2024-25/1064154082(1) for the assessment year 2017-18. The assessee has raised following grounds of appeal:
Kalahalli Thimmanayak Suresh, Bangalore Page 6 of 9 2. The brief facts of the case are that the assessee had sold a property on 1.3.2017 situated at No.45, 2nd Cross, Near RMP Quarters, N Block, Kuvempunagar, Chamaraja mohalla, Mysore at a price of Rs.68,00,000/-, the receipts of which are as detailed below:-
2.1 As can be seen from above, the assessee has received cash of Rs.9,60,000/- out of the total sales consideration amounting to Rs.68,00,000/-. Thereafter, the notices u/s 271D of the Act dated 12.9.2019, 22.10.2019 & 8.11.2019 were issued to the assessee as the assessee violated the provisions of section 269SS of the Act, which was amended by Finance Act, 2015 and applicable w.e.f. 1.6.2015 by receiving the sale proceeds of immovable property in cash more than Rs.20,000/-. As the assessee had not responded to Kalahalli Thimmanayak Suresh, Bangalore Page 7 of 9 any of the aforesaid notices, the ld. JCIT, Range-1(2), Bangalore presumed that the assessee has no objection to levy of penalty u/s 271D of the Act in violation of section 269SS of the Act and accordingly, levied the penalty of Rs.9,60,000/- which is equal to the amount of cash received by the assessee on sale of immovable property. Aggrieved by the penalty order u/s 271D of the Act, dated 28.1.2020, the assessee preferred an appeal before CIT(A)/NFAC. The ld. CIT(A)/NFAC dismissed the appeal of the assessee as there was no response to the notices issued on three occasions even before the ld. CIT(A). Further, the ld. CIT(A) observed that there has been a clear violation falling within the meaning of “specified sum” as per section 269SS of the Act, which attracts penalty u/s 271D of the Act. Further, ld. CIT(A) is of the opinion that the assessee has also not brought out any material on record to substantiate any reasonable cause for the default. Accordingly, in view of the ld. CIT(A), the penalty u/s 271D of the Act has been levied correctly and accordingly he upheld the order of AO. Aggrieved by the order passed by the ld. CIT(A) u/s 250 of the Act, the assessee has filed the present appeal before this Tribunal. 2.2 Even before us, no one appeared on behalf of the assessee.
The ld. D.R. on the other hand supported the orders of the income tax authorities below and submitted that since the assessee had received cash of Rs.9,60,000/-, out of total sale proceeds of Rs.68,00,000/-, which is a clear violation falling within the meaning of “specified sum”, as per section 269SS of the Act, which attracts penalty u/s 271D of the Act.
We have heard the rival submissions and perused the materials available on record. It is not disputed that the assessee has sold a property on 1.3.2017 at a price of Rs. 68,00,000/-, out of which Rs.9,60,000/- was received in cash. The Authorities below are of the view that the assessee has violated the provision of section 269SS of the Act, by receiving the sale proceeds from sale of Kalahalli Thimmanayak Suresh, Bangalore Page 8 of 9 immovable property in cash more than Rs.20,000/-. It is also an undisputed fact that the assessee could not represent his case not only before the authorities below but also even before us. In our opinion the Assessee didn’t get any opportunity to demonstrate that there was reasonable cause for the said failure as per the provisions contained in Section 273B of the Act. On going through the statement of fact filed in Form-35 before the ld. CIT(A), we found that the assessee is a resident of Mysuru but staying in Mumbai. Therefore in our considered opinion, in the interest of justice and equity, we feel that one more opportunity should be granted to the assessee to demonstrate any reasonable cause for the default, if any before the AO. Accordingly, we remit the issue in dispute to the file of AO for fresh consideration and to decide in accordance with law after giving opportunity of hearing to the assessee. The assesse is directed to update email id, Mobile No. and the residence/office address on the income tax portal. The assessee is also directed to cooperate with the proceedings before the revenue authorities and to file the relevant submissions/documents/information, which would be essential and required by the revenue authorities for proper adjudication. We clarify that in case of further default, the assessee shall not be entitled for any leniency.