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Facts
The assessee was penalized under Section 271D for receiving cash as sale consideration for immovable properties. The assessee claimed these were advances received in earlier financial years (2006-07 to 2008-09), with only the registration of sale deeds occurring in the assessment year 2017-18. However, the submitted 'sale deeds' were on plain paper and unsigned, lacking authenticity.
Held
The Tribunal restored the matter to the Assessing Officer for verification. If registered sale deeds confirm the advances were received in earlier years, no penalty under Section 271D should be levied. If cash was received at the time of sale deed execution, it would not be considered an advance, and no penalty would apply to that extent.
Key Issues
The key legal issue is the applicability of penalty under Section 271D for cash receipts related to property sales, specifically whether these were genuine advances received in prior years or cash received at the time of sale deed execution.
Sections Cited
Section 271D, Section 250
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, DEHRADUN CIRCUIT BENCH: DEHRADUN
Before: SHRI MAHAVIR SINGH & SHRI MANISH AGARWAL
ORDER
PER MANISH AGARWAL, AM :
The present appeal is filed by assessee against the order dated 23.10.2025 passed by Ld. Commissioner of Income Tax (A), NFAC, Delhi [“Ld.CIT(A)”] u/s 250 of the Income Tax Act, 1961 [“the Act”] arising out of penalty order dated 09.05.2022 passed u/s 271D of the Act pertaining to Assessment Year 2017-18.
At the time of hearing, no one attended the proceedings on behalf of the assessee. Therefore, the appeal is adjudicated after considering the arguments of Ld. CIT DR and material available on record.
Heard the contention of Ld. CIT DR and perused the material available on record. The penalty is levied u/s 271D of the Act as the assessee has received cash of the sale consideration from the sale of immovable properties from various persons as tabulated in the penalty order. Before the lower authorities, it was claimed by the assessee that cash was received advance way back in FYs 2006-07 to 2008-09 and only registration of the sale deed have taken place during the year under appeal. For this, copies of certain Sale Deeds were placed in the Paper Book filed. After perusing the same, we find that none of the deed submitted before us, is registered rather they were executed on plain papers and were not even singed by either of the parties. Therefore, their authenticity remained unverified.
In view of these facts, we restore the matter back to the file of AO for making verification of the contention of the assessee from the registered Sale Deeds and if it is found that advances received as claimed in FYs 2006-07 to 2008-09 and the same found recorded in the registered Sale Deed, no penalty be levied u/s 271D of the Act and if it is found that the payments were received as advances prior to registration of the Sale Deed, the penalty levied u/s 71D is hereby, sustained. In case, the cash was received at the time of execution of Sale Deeds, the same would not fall in the category of advance payment and to the extent of such amount, no penalty u/s 271D of the Act be levied. With these directions, appeal filed by the assessee is allowed for statistical purposes.
In the result, the appeal of the assessee is allowed for statistical purposes.
Order pronounced in the open Court on 09.03.2026.