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Income Tax Appellate Tribunal, ‘C’ BENCH, CHENNAI
Before: SHRI MAHAVIR SINGHAND SHRI JAGADISH
आदेश /O R D E R
PER MAHAVIR SINGH, VICE PRESIDENT:
This appeal by the assessee is arising out of the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (NFAC), Delhi in Order No.ITBA/NFAC/S/250/2023- 24/1056651563 (1) dated 29.09.2023. The penalty order was framed by the Additional/Joint/Deputy/Assistant Commissioner of Income Tax, National Faceless Assessment Centre, Delhi for the - 2 - 2017-18 u/s.271D of the Income Tax Act, 1961 (hereinafter the ‘Act’) vide order dated 21.03.2022.
2. At the outset, the ld.AR for the assessee drew our attention to additional grounds raised
by assessee in regard to the order of AO levying penalty u/s.271D of the Act as barred by limitation. For this, assessee has raised the following three additional grounds:-
1. That the impugned penalty order dated 21.03.2022 passed by the Ld.AO, NFAC is clearly barred by limitation in terms of section 275(1)(c) of the Act and therefore the same deserves to be quashed.
In raising the above additional ground the appellant relies on the decision of the Apex Court in the case of National Thermal Power Corporation Ltd., 229 ITR 383(SC).
3. In view of the above grounds and other submissions to be made at the time of Appeal hearing, the order U/s 250 passed by Commissioner of Income Tax (Appeals), NFAC, Delhi may be cancelled and justice rendered.”
The brief facts relating to the limitation issue are that in the case of assessee notice u/s.274 r.w.s. 271D of the Act i.e., for initiation of penalty proceedings u/s.271D for violation of provisions of section 269SS of the Act was issued on 04.01.2021. The ld.AR stated that as per the provisions of section 275(1)(c) of the Act, penalty order should have been passed within six months from the end of the month in which penalty proceedings were initiated. Hence, according to him, the penalty should have been levied on or - 3 - 31.07.2021, whereas the penalty order u/s.271D of the Act is dated 21.03.2022, which is clearly barred by limitation. When these facts were confronted to ld. Senior DR, he filed extension of time limit for ease of tax compliance in view of Covid-19 and also referred to the decision of Hon’ble Supreme Court in Miscellaneous Application No.665 of 2021 vide order dated 23.03.2020, wherein the Hon’ble Supreme Court has given directions that the delay are to be condoned during this period 15.03.2020 to 14.03.2021 and they have condoned the delay up to 28.02.2022 in Miscellaneous Application No.21 of 2022 vide order dated 10.01.2022. Ultimately, the Hon’ble Supreme Court has extended upto 31.05.2022. The ld.Senior DR referred to CBDT time limitation extension for ease of tax compliance and for passing of penalty order, time limit was extended upto 30.06.2021, which was further extended upto 30.09.2021. The ld.Senior DR also referred to the press release of 17.09.2021, whereby the time limit was extended upto 31.03.2022 in term of Notification No.113 of 2021 dated 17.09.2021, which has been issued in this regard in term of the decision of Hon’ble Supreme Court. According to ld. Senior DR, there is no time barring of this penalty and it is much before 31.03.2022 i.e., the order of penalty u/s.271D of the Act was passed on 21.03.2022.
When these facts were confronted to ld. AR, he could not controvert the above facts and hence, we are of the view that in view of extensions and exemptions given by CBDT vide Notification No.113 of 2021 dated 17.09.2021, the timeline has been extended after completion of penalty proceedings upto 31.03.2022. In this case, penalty order is passed on 21.03.222, which is within time and hence, additional grounds raised by assessee fails and accordingly, this jurisdictional issue is decided against the assessee.
The issue on merits raised by assessee is as regards to the fact that the assessee is only a Power of Attorney holder of the owner of the property Shri Bharath and penalty can be levied only on the owner of the property and not on the power holder. For this, assessee has raised the following three effective grounds:- 1, On the facts and circumstances of the case, the order of Commissioner of Income Tax (Appeals),NFAC, Delhi dated 29.09.2023 in sustaining the penalty u/s 271D levied by AO,NFAC, Delhi is opposed to the facts of the case and is not legally maintainable.
2. On the facts and circumstances of the case, the appellant is only a power holder of one Mr.Bharath and the penalty levied on the power holder for the alleged contravention of provisions of section 2695S and consequent levy of penalty u/s 27ID is not legally justified.
3. On the facts and circumstances of the case, in the course of proceedings before the First Appellate Authority various documentary evidences were filed to demonstrate that no effectual transfer of property took place, which formed the basis for the levy of penalty to on extent of Rs. 34,50,000/-.
Brief facts are that the assessee in response to penalty notice u/s.271D of the Act, filed reply that the assessee was only an Attorney agent (Power of Attorney) and the assessee has executed sale deed of immovable property on behalf of the owner of the property Shri Bharath. The reply reads as under:- "I was an Attorney agent(Power of Attorney) of Mr. Bharath currently residing at 2/5, Kavandapatty, Pakalpatty Post, Cellapillai kuttai Uratchi, Omalur, Salem District-636455. The said sale of immovable property was executed on his behalf by me. The sale consideration was ultimately received by Mr. Bharath. Hence the said transaction is not binding on me. Hence I request you to not impose any penalty on me. The assessee has uploaded the copy of power of attorney in his name.”
The Additional/Joint Commissioner of Income Tax, National Faceless Assessment Centre, Delhi (hereinafter ‘the AO’), issued show-cause notice and the relevant show-cause notice reads as under:- "Whereas in the course of proceedings before me for the A. Y. 2017-18, It is noted that you have received in cash Rs.34,50, 000/- on sale of immovable property (Excess of Rs. 20,000/-) in contravention of the provisions of section 269SS of the Income Tax Act, 1961 during the F.Y. 2016-17, relevant to the A.Y. 2017-18. You are hereby requested to explain in writing or through e-mail ( salem.addlcit.1@incometax. gov. in) on or before 18/01/2021 and show cause why an order imposing a penalty on you should not be made under section 271D of the Income Tax Act, 1961. Your reply in writing (or) through e-mail received on or before the said date will be considered before any such order is made u/s. 271D of the Income Tax Act, 1961."
The AO required the assessee to furnish details such as PAN, name, e-mail, address of Shri Bharath who had ultimately received the sale consideration in cash of Rs.34.50 lakhs on sale of immovable
- 6 - property. In response to the above, the assessee filed PAN Number, address and e-mail ID of Shri S.Bharath but could not file evidence that he has transmitted this cash received for sale of immovable property of Rs.34.50 lakhs to the owner of the property Shri S.Bharath. Hence, the AO levied penalty for violation of provisions of section 269SS of the Act, for receiving or accepting cash of Rs.34.50 lakhs for sale of property on behalf of the owner as Power of Attorney holder under the provisions of section 271D r.w.s. 274 of the Act. Therefore, he levied penalty for a sum equal to the amount of cash accepted for sale of property at Rs.34.50 lakhs without reasonable cause. Aggrieved, assessee preferred appeal before CIT(A).
The CIT(A)-NFAC noted that the factual position is that Shri S. Bharath executed a Power of Attorney (PoA) on 30.05.2016 in favour of assessee registered as document No.3105/2016 with sub- registrar, Suramangalam, Salem. On the strength of the above PoA, the assessee executed the above sale deed dated 13.06.2016 in favour of Smt. N.Akiladevi, who is the younger sister of Shri S.Bharath’s mother. As per sale deed dated 13.06.2016, the assessee received cash of Rs.34.50 lakhs for sale of this property being sale consideration. Before CIT(A)-NFAC, the assessee
- 7 - contended that this property was transferred without consideration and no cash consideration was passed in respect of this sale deed dated 13.06.2016. The CIT(A)-NFAC noted that as per sale deed dated 13.06.2016, in page 5 of sale deed, the following clause is mentioned:- “I am selling the property mentioned below today to you for a “sale consideration of Rs.34,50,000 (Rupees thirty-four lakhs and fifty thousand only) and I have “received” the entire sale consideration amount of Rs.34,50,000-00/- from you today on behalf of the person who gave me power of attorney to meet their family and necessary expenses, and hence I have given possession of the property mentioned below to you and confirm that you have taken possession.”
In view of the above, the CIT(A)-NFAC noted that the assessee is unable to prove that there is no sale consideration received by assessee or the assessee has passed on the sale consideration to the actual owner Shri S. Bharath. He relied on the sale deed wherein sale consideration paid by the purchaser party to the PoA holder of Rs.34.5 lakhs. Hence, the CIT(A)-NFAC confirmed the penalty imposed by the AO for a sum equal to the amount of sale consideration in cash of Rs.34.50 lakhs. Aggrieved, assessee is in appeal before the Tribunal.
We have heard rival contentions and gone through facts and circumstances of the assessee. We noted that even now before us, the assessee could not prove that there is no sale consideration received by assessee being PoA holder or this amount is passed on to the actual owner being an power agent. The sale deed dated 13.06.2016 categorically recorded a clause that sale consideration of Rs.34.50 lakhs was received by the seller of the property i.e., the power agent & the present assessee and confirmed the same in the sale deed. As the assessee could not counter the argument noted by the AO and CIT(A)-NFAC in their respective orders that there is no other proof better than the sale deed wherein cash consideration received by assessee is proved. We have gone through the provisions of section 269SS of the Act and the opening word “No person shall take or accept from any other person” means that all persons including the power agent or power agent on behalf of the owner of the property or owner of the property can accept any specified sum in cash for sale of property otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account. It means that even the Power of Attorney holder, in case he has received money and not passed on to the owner, he is liable for penalty u/s.271D of - 9 - Act in violation of section 269SS of the Act. Hence, we confirm the order of lower authorities and dismiss this appeal of assessee.
In the result, the appeal filed by the assessee is dismissed.
Order pronounced in the open court on 7th June, 2024 at Chennai.