SHRI BABURAO RAMBHAU KAPTE,CHANDRAPUR vs. JOINT COMMISSIONER OF INCOME TAX, CHANDRAPUR RANGE, CHANDRAPUR

Date of Hearing – 04/06/2024 Date of Order – 04/06/2024

O R D E R PER K.M. ROY, A.M.

The instant appeal has been filed by the assessee challenging the impugned order dated 16/11/2021, passed by the learned Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, [“learned CIT(A)”], for the assessment year 2016–17.

“1) The learned C.LT.(A) erred in confirming the Penalty u/s.271-D amounting to Rs. 12,00,000/-. 2) The learned C.I.T.(A) erred in not properly consider Assessee's submission and various case laws cited by Assessee. 3) The learned C.I.T.(A) erred in not properly applying his mind.

Shri Baburao Rambhau Kapte ITA no.39/Nag./2022

4) Assessee craves leave to urge additional grounds and to alter or amend any grounds at the time of hearing, if necessary.”

“The above referred Appellant submits as under:- The above referred Appellant stays in a small village of Bhadrawati in Dist. Chandrapur (Maharashtra). The above referred Appellant doesn't know how to operate computer or any other electronic media. The order passed by CIT(A), National Faceless Appeal Centre (NFAC), Delhi came to the knowledge of Appellant's Chartered Accountant only when he visited the Income Tax Department at Chandrapur Office and after he enquired the proceedings supposedly pending before CIT(A), National Faceless Appeal Centre (NFAC), Delhi. The Appellant was not aware about the order and the C.A. suo- moto took a print out of the said order and immediately filed the present Appeal before this Hon'ble Tribunal. The Appeal in normal course ought to have been filed on or before 15.01.2022. However, the same is being filed today i.e Friday the 25.03.22 after a delay of 68 days. The delay of days was due to bonafide belief, reasonable cause and not attributable to the Appellant. Therefore in the interest of justice, delay in filing the present Appeal, may kindly be condoned. No prejudice is going to be cause to the Revenue if delay is condoned and Appeal is decided on merits.”

Shri Baburao Rambhau Kapte ITA no.39/Nag./2022 levying penalty under section 271D of the Income Tax Act, 1961 ("the Act") for ` 12,00,000, for alleged violation of provisions of section 269SS of the Act for receiving sale consideration of ` 12,00,000, in cash in respect of two sale deeds of ` 6,00,000 each, both dated 31/08/2015, for sale of agricultural land at Village Somnala. The assessee, by following two registered sale deed dated 31/08/2015, sold his agricultural land for a total consideration of ` 12,00,000. The Assessing Officer held that the assessee apparently violated the provisions of section 269SS of the Act and hence liable for penalty under section 271D of the Act. The Assessing Officer, therefore, issued notice 29/11/2019, under section 274 r/w section 271D of the Act which was served upon the assessee. In response to the notice, the assessee attended the case and filed written reply stating inter alia that the assesse is agriculturist and he was not aware of the income tax provision of section 269SS and 269T. The proceeds received in cash, deposit in bank and withdraw the amount from bank to purchase the other agriculture land. The transaction brought in black and white. In view of the facts the assesse requested to dropped the penalty proceedings, the Assessing Officer was of the view that the assessee’s contentions cannot be considered because the assessee received specified sum in cash on account of sale of immovable property. The assesse is not an agriculturist as mentioned in the sale deed and stated vide written submission but an employee of ordnance factory. The assessee filed return of income for the assessment year 2016-17 declaring total income of ` 528,280. The assessee shown ` nil income against exempted income. Accordingly, the Assessing Officer held that the assessee accepted specified sum of ` 12,00,000, in cash which is in contravention to the provision of section 269SS Page | 3

Shri Baburao Rambhau Kapte ITA no.39/Nag./2022 of the Act and, therefore, he is liable for penalty of ` 12,00,000 under section 271D of the Act. Accordingly, the Assessing Officer levied penalty of ` 12,00,000, under section 271D of Act for accepting specified sum in cash in contravention of the provision of section 269SS of the Act. Aggrieved, teha ss carried the matter before the first appellate authority.

6. The learned CIT(A) confirmed the order passed by the Assessing Officer levying penalty under section 271D of the Act by observing as follows:–

“3.1 It is clear from above that any sum of money receivable whether as advance or otherwise has been included in the provision of section 269SS w.e.f.. 1.06.2015. There is no exception for agricultural land provided here. The transaction carried out by the appellant is 31.08.2015, when the provisions of act have come in to picture. The case laws relied upon by the appellant does not help him as they relates prior to the amendment by the appellant also does not get any relief under section 273B of the Act. Accordingly, the penalty of Rs. 12,00,000- levied by JCIT, Chandarpur Range, is confirmed in full. The grounds of appeal are dismissed.”

The assessee being aggrieved, again filed appeal before the Tribunal.

Shri Baburao Rambhau Kapte ITA no.39/Nag./2022 findings of the Tribunal, Chennai Bench, in deleting the penalty imposed by the Assessing Officer under section 271D of the Act and confirmed by the learned CIT(A) by observing as follows:– “Our findings and Adjudication 5. The first argument of Ld. AR is that the expression used in Sec.269SS is that no person shall accept from any person any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer of an immovable property. The Ld. AR submitted that applying the rule of Ejusdem generis to the expression advance or otherwise, the phrase otherwise would not cover sale consideration and such sale transactions are excluded from the purview of Sec.269SS. However, we are unable to accept this argument. The Explanatory Notes to the Finance Act, 2015, enlarging the scope of Sec.269SS, clearly provide that in order to curb generation of black money by way of dealings in cash in immovable property transactions, Section 269SS of the Income tax Act has been amended to provide that no person shall accept from any person any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer of an immovable property (specified sum) otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount of such loan or deposit or such specified sum is twenty thousand rupees or more. Very clearly, the intention of the amendment is to include sale consideration also arising out of immovable property within the ambit of Sec.269SS. This argument raised by Ld. AR stand rejected.

7. Proceeding further, from the facts, it emerges that the assessee has sold property for sale consideration of Rs.50 lacs out of which substantial sale consideration to the extent of Rs.45 Lacs has been received in Cheques whereas only a small sale consideration of Rs.5 Lacs has been received in cash. The sale transaction is duly evidenced by the registered agreement / deed. Considering the fact that the provisions of Sec.269SS are mainly to curb generation of black money by way of dealings in cash in immovable property transactions which is absence in the present case, we would hold that it is not a fit case for levy of impugned penalty. Therefore, we delete the same.”

Shri Baburao Rambhau Kapte ITA no.39/Nag./2022 has been decided by holding that the imposition of penalty under section 271D of the Act by the Assessing Officer was bad–in–law for the reasons stated above, consistent with the view taken therein, we set aside the impugned order passed by the learned CIT(A) by quashing the penalty imposed under section 271D of the Act by the authorities below. Consequently, all the grounds of appeal raised by the assessee are allowed.