Surjit Kaur Vs ITO (ITAT Chandigarh)
ITAT Chandigarh Deletes Section 271D Penalty for Cash Sale Consideration Received at Registration
The Chandigarh Bench (SMC) of the Income Tax Appellate Tribunal (ITAT) allowed the appeal of the assessee for AY 2017-18 and deleted penalty of ₹7.41 lakh levied under section 271D for alleged violation of section 269SS.
The penalty was imposed on the ground that the assessee received entire sale consideration in cash on sale of a plot. The Tribunal noted that no assessment was framed, the transaction resulted in capital loss, and—most importantly—the assessee did not receive any advance; the full consideration was received in one go at the time of execution and registration of the sale deed.
Relying on the decision of the Chennai ITAT in ITO v. R. Dhinagharan (HUF) and CBDT Circular No. 19/2015, the Tribunal held that section 269SS applies only to cash receipt of loans, deposits, or advances (“specified sums”) relating to immovable property, and not to final sale consideration paid at the time of registration. The expression “otherwise” in section 269SS was interpreted to relate only to the nature of advances, not completed sale transactions.
Accordingly, the Tribunal held that there was no violation of section 269SS, and the penalty under section 271D was unsustainable, and thus deleted. The appeal was allowed.
FULL TEXT OF THE ORDER OF ITAT CHANDIGARH
