Badmanaban Narayanan Vs ITO (ITAT Chennai)
Chennai ITAT Deletes Section 271D Penalty on Cash Sale Consideration, Holds Genuine Registered Property Transactions Outside Mischief of Section 269SS
The Chennai ITAT deleted the penalty of ₹3.50 lakh levied under section 271D for alleged violation of section 269SS, holding that cash received as part of the disclosed sale consideration of an immovable property, duly recorded in the registered sale deed, does not automatically attract penal consequences. The Tribunal noted that the assessee, an agriculturist, had received ₹3.50 lakh in cash on various dates as part of the total sale consideration of ₹13.50 lakh, and the entire consideration was fully disclosed in the registered conveyance deed. Relying on its earlier decision in Srinivasan Ramya v. ACIT, the Tribunal held that the legislative intent behind section 269SS is to curb unaccounted cash transactions, not to penalise genuine, documented property transactions where there is no allegation of tax evasion, undisclosed income, or sham dealings. Emphasising that the substance of the transaction should prevail over a technical interpretation, the Tribunal concluded that the penalty under section 271D was unsustainable and directed its deletion.
Cases Discussed
- Srinivasan Ramya vs. ACIT (ITAT Chennai), ITA No.3162 /Chny/2025 dated 16.04.2026
- Noordeen Ahmed Amina v. ITO
- Wahid Ali v. JCIT
- ITO v. R. Dhinagharan HUF
- Hindustan Steel Ltd. v. State of Orissa
FULL TEXT OF THE ORDER OF ITAT CHENNAI
