Ashok Ramanlal Tamboli Vs ITO (ITAT Ahmedabad)
Summary: The appeal was filed by the assessee against the order dated 21 January 2026 passed by the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, under Section 250 of the Income Tax Act, 1961, for Assessment Year 2021-22. The dispute concerned a penalty of ₹31,95,813 imposed by the Assessing Officer under Section 271D of the Act and confirmed by the CIT(A).
The assessee, along with other co-owners, sold a property for a consideration of ₹27,90,00,000. Under the sale deed, the assessee received his share of the sale consideration amounting to ₹1,16,25,000. In addition to that amount, the assessee received ₹31,95,813 in cash as sale proceeds. Initially, the assessee declared only his share of the consideration recorded in the sale deed in his return of income and did not disclose the cash component. Subsequently, the assessee filed a revised return and disclosed the cash amount. The Assessing Officer accepted the revised return but imposed penalty under Section 271D for receiving ₹31,95,813 in cash, treating the receipt as a violation of Section 269SS. The CIT(A) confirmed the penalty.
Before the Tribunal, the assessee submitted that he and his family members were agriculturists and were not aware of the relevant provisions prohibiting acceptance of sale consideration in cash. It was submitted that the family was in dire need of funds and had collectively decided to sell their ancestral property. According to the assessee, the purchasers were willing to buy the property only if part of the consideration was accepted by cheque and part in cash. Since the assessee and his family members had no choice in view of their financial need, they accepted the partial cash consideration.
The assessee further submitted that he and his family members were under a bona fide belief that acceptance of part of the consideration in cash would not violate the Income-tax provisions. Upon subsequently learning that the entire sale consideration, including the cash amount, was required to be disclosed, they filed a revised return even before issuance of notice under Section 147. The assessee accordingly contended that the circumstances constituted a bona fide explanation for the cash receipt.
The assessee also relied upon the order dated 25 September 2024 passed in the case of co-sharer Jayaben Ramanlal Tamboli. According to the submission, the co-sharer was involved in the same property transaction and penalty proceedings under Section 271D had been initiated in her case. After considering her submissions, however, the Assessing Officer accepted the explanation and dropped the penalty proceedings. The assessee argued that, being similarly situated and having explained the circumstances for receiving a small portion of the total sale consideration in cash and having duly offered that amount for taxation, he should receive the same treatment.
The Tribunal accepted the assessee’s submission. It noted the identical treatment of the co-sharer in respect of the same transaction and held that the assessee’s case was on an equal footing. The Tribunal accordingly deleted the penalty of ₹31,95,813 imposed under Section 271D.
The Tribunal thus allowed the assessee’s appeal. The order was pronounced on 3 August 2026.
Cases Discussed
- Jayaben Ramanlal Tamboli, order dated 25.09.2024 — referred to in relation to the same transaction of sale of land; the Assessing Officer had accepted the co-sharer’s explanation and dropped the penalty proceedings under Section 271D.
FULL TEXT OF THE ORDER OF ITAT AHMEDABAD
The present appeal has been filed by the assessee against the order of the Ld. Commissioner of Income Tax (Appeals), National Faceless Appeal Centre (hereinafter referred to as “NFAC”), Delhi (hereinafter referred to as “CIT(A)”), dated 21.01.2026 passed under Section 250 of the Income Tax Act, 1961 (hereinafter referred to as the “Act”) and relates to Assessment Year (A.Y.) 2021-22.
2. The assessee in this appeal is aggrieved against the action of the CIT(A) in confirming the penalty of Rs.31,95,813/- levied by the Assessing Officer (in short ‘the AO’) u/s. 271D of the Act.
3. The brief facts of the case are that the assessee along with other co-owners sold a property at a consideration of Rs.27,90,00,000/-. The assessee received his share of the sale consideration at Rs.1,16,25,000/- as per the sale deed. Apart from this amount, the assessee also received Rs.31,95,813/- as sale proceeds in cash. Though, the assessee, as advised, declared his share of sale consideration as per the sale deed in the return of income, however, did not disclose the amount of sale consideration received in cash. However, the assessee filed a revised return and declared the said cash amount of sale consideration therein. The AO accepted the revised return, however, levied penalty u/s 271D of the Act for receiving the sale consideration of Rs.31,95,813/- in cash in violation of provision of Section 269SS of the Act. The Ld. CIT(A) confirmed the penalty so levied by the AO.
4. Before us, at the outset, Ld. Counsel for the assessee submitted that it was duly explained before the lower authorities that the assessee and his family members were agriculturists and were not aware of the relevant provisions of the Act prohibiting acceptance of sale consideration in cash. It was further explained that the assessee and his family members were in dire need of funds, therefore, they collectively decided to sell their ancestral property. The purchasers were willing to purchase the property only if, the assessee and his family members would accept partial amount in cheque and partial amount in cash. Since, the assessee and his family members had no choice, but to accept the partial amount in cash in lieu of sale of the property because they were in dire need of funds, therefore, they acceded to the condition of the purchasers to accept partial amount in cash. That the assessees were not aware that the same would be in any manner a violation of Income Tax Provisions. Ld. AR of the assessee has further submitted that when the assessee and his family members came to know that they were supposed to disclose the entire sale consideration including the amount received in cash, they immediately filed revised return of income, even prior to issue of notice u/s 147 of the Act. The Ld. AR has submitted that the assessee and his family members were under bonafide belief that they have not committed any violation of law in accepting the partial amount in cash out of sale consideration. The Ld. Counsel for the assessee has further brought our attention to the order passed in case of co-sharer, namely, Jayaben Ramanlal Tamboli, PAN No. AFCPT8501L, order dated 25.09.2024, wherein, in identical facts and circumstances, in relation to same transaction of sale of land, penalty proceedings u/s 271D of the Act were initiated by the AO, however, after considering the submissions made by the said co-sharer who had sold the property in question alongwith the assessee, the AO accepted the explanation and no adverse inference was drawn against the said assessee and the penalty proceedings u/s 271D of the Act were dropped. Since, the said case is relating to the same transaction of the sale of the property and since, in the case of co-sharer, the AO has dropped the penalty proceedings u/s 271D of the Act, hence, the case of the assessee being on equal footing and the assessee having explained the reasons for acceptance of small amount in cash out of total sale consideration and duly offered the said sale consideration for taxation, the impugned penalty in the case of the assessee is ordered to be deleted.
5. In the result, the appeal of the assessee stands allowed.
This Order pronounced on 03/08/2026
