JAYASUDHA RAVIKUMAR,CHENNAI vs. ITO, NON CORP RANGE 4, CHENNAI

Aggrieved by confirmation of penalty u/s 271D for Rs.7.50 Lacs for Assessment Year (AY) 2017-18, the assessee is in further appeal before us. The impugned order has been passed by learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi [CIT(A)] on 17-01-2024 in the matter of impugned penalty levied by Ld. Assessing Officer [AO] u/s. 271D of the Act vide order dated 29-09-2022. In the penalty order, the penalty has been levied on the finding that the assessee along with other three joint owners sold certain property for Rs.70 Lacs. The amount of Rs.40 Lacs was received through cheques but the remaining payment of Rs.30 Lacs was apparently received in cash. The Ld. AO, invoking the provisions of Sec.269SS, show-caused the assessee for levy of penalty u/s 271D. Though the assessee submitted that she received cash of Rs.0.75 Lacs only, the same could not be established. Accordingly, Ld. AO levied proportionate penalty of Rs.7.50 Lacs. The Ld. CIT(A) confirmed the same against which the assessee is in further appeal before us.

The Ld. AR has relied upon the decision of Chennai Tribunal in the case of Nordeen Ahmed Amina (ITA No.1118/Chny/2022 dated 26-07- 2023) as well as another decision in the case of Shri R. Dhinagharan (HUF) (ITA No.3329/Chny/2019 dated 29-12-2013) deleting penalty on similar facts. The copies of the orders have been placed on record. 3. Upon perusal of these decisions, we find that Tribunal in the case of Nordeen Ahmed Amina (supra) has deleted the penalty on the ground that substantial sale consideration was received in cheque. The sale transaction was duly evidenced by registered document / deed. The provisions of Sec.269SS were mainly to curb generation of black money which component was absent in the facts of the case. Accordingly, the penalty was deleted. Similarly, in the case of Shri R. Dhinagharan (HUF) (supra), the bench observed that the new penal provisions as brought in by Finance Act, 2015 would apply only to advance receivable and the provisions would not apply to transaction that has happened at the time of final payment and at the time of registration of sale deed when the payment has happened before sub-registrar. Applying the ratio of these decisions, we delete the impugned penalty.