Case Law Details
Rakesh Ganapathy Vs JCIT (ITAT Bangalore)
ITAT Bangalore held that penalty under section 271D of the Income Tax Act not imposable for acceptance of cash on transfer of agricultural land as non-compliance with section 269SS of the Income Tax Act was due to bonafide belief.
Facts- Assessment order was passed u/s 143(3) of the Act in the case of assessee on 30.4.2019. The AO after carefully examining the details furnished by the assessee completed the assessment by accepting the return of income. Thereafter, to the surprise of the assessee, after a gap of more than 3 years ld. JCIT Range-4 (3) Bangalore had issued notice u/s 274 r.w.s. 271D of the Act asking to show cause in writing why an order imposing penalty u/s 271D of the Act shall not be made as the assessee had failed to comply with the provisions of section 269SS of the Act.
JCIT not satisfied with the explanation, levied penalty of Rs. 14,64,000/-. CIT(A) dismissed the appeal. Being aggrieved, the present appeal is filed.
Conclusion- Held that assessee has received cash amounting to Rs.14,64,000/- towards the sale consideration for transfer of his agricultural land. In the instant case, the sale of property and consequent receipt of sale consideration in cash are not disputed by the either side. The assessee had only sold an ancestral property on a honest and Bonafide belief that same are not covered under the provisions of the section 269SS of the Act accepted the sale consideration in cash. On identical set of facts, the coordinate bench of ITAT, Bangalore in the case of Smt. Pushpalatha Vs. ITO has held that where the assessee sold a property and received cash exceeding Rs.20,000/- as part of sale consideration having no knowledge of tax law there was reasonable cause as mandated u/s 273B of the Act for failure to comply with section 269SS of the Act. Hon’ble ITAT therefore, held that the penalty u/s 271D of the Act was not warranted and hence deleted.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
This appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 31.1.2024 vide DIN & Order No. ITBA/NFAC/S/250/2023-24/1060316528(1) for the assessment year 2017-18. The assessee has raised following grounds of appeal:
2. Further, the assessee has raised following additional grounds of appeal:
3. Before us, ld. A.R. of the assessee drawn our attention to the application for admission of additional grounds of appeal and submitted that these grounds were not specifically urged in the original grounds of appeal filed before the ld. CIT(A). Further, ld. A.R. of the assessee submitted that these grounds do not involve any investigation of any facts otherwise on record of the department and are also pure question of law and accordingly prayed to admit the additional grounds and dispose of the case on merit for the advancement of substantial cause of justice. Reliance is placed on the decision of Hon’ble Apex Court in the case of National Thermal Power Company Ltd. Vs. CIT reported in 229 ITR 383 and also on the ratio of the decision of Hon’ble Karnataka High Court in the case of Gundathur Thimmappa and Sons reported in 70 ITR 70.
4. Ld. D.R. on the other hand, opposed the additional grounds taken by the assessee at this stage.
5. We have heard both the parties on admission of additional grounds. In our opinion, all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of the adjudication of above grounds. Further, we also find that the grounds are purely question of law and accordingly by placing reliance on the judgement of Hon’ble Supreme Court in the case of NTPC Vs. CIT cited (supra), we inclined to admit the additional grounds for the purpose of adjudication as there is no investigation of any fresh facts otherwise on record and the action of the assessee is Bonafide.
6. Brief facts of the case are that assessment order was passed u/s 143(3) of the Act in the case of assessee on 30.4.2019. The AO after carefully examining the details furnished by the assessee completed the assessment by accepting the return of income. Thereafter, to the surprise of the assessee, after a gap of more than 3 years ld. JCIT Range-4 (3) Bangalore had issued notice u/s 274 r.w.s. 271D of the Act asking to show cause in writing why an order imposing penalty u/s 271D of the Act shall not be made as the assessee had failed to comply with the provisions of section 269SS of the Act. In response to the above show cause notice, the assessee filed a reply stating that the property in question was agricultural property and was sold to his relative (blood related) who are agriculturists. The assessee further explained that the agricultural land is exempted u/s 2(14) of the Act and the sale proceeds received from sale of such agricultural land is not covered u/s 269SS of the Act. Further, the assessee also take a plea of his ignorance of law. He further explained that he is under the honest Bonafide belief that income on sale of agricultural property is exempt and accordingly prayed to consider his request and exempt him from the levy of penalty. The ld. JCIT did not accept the explanation on the following reasons:
a) The asset sold by assessee i.e. ancestral agricultural property is an immovable asset.
b) Sale of above property is covered under a specified transaction as per explanation 4 to section 269SS of the Act.
c) There is no provision in the income tax act to exempt from levy of penalty for receipt of sale consideration (on sale of agricultural land) in cash in contravention of section 269SS of the Act.
d) The Income Tax Act did not provide any exemption for levy of penalty for receipt of cash from the relative of the assessee in contravention of section 269SS of the Act.
e) Lastly the ignorance of law is not an excuse and accordingly levied the penalty of Rs.14,64,000- i.e. a sum equal to the amount of specified sum received in connection with the sale of immovable property in cash in contravention of section 269SS of the Act.
6.1 Aggrieved by the penalty order passed u/s 271D of the Act, the assessee has preferred an appeal before the ld. CIT(A)/NFAC. The ld. CIT(A)/NFAC dismissed the appeal of the assessee on the same grounds as that taken by the ld. JCIT while levying the penalty.
6.2 Aggrieved by the order of ld. CIT(A)/NFAC, the assessee has filed the present appeal before this Tribunal. The assessee has filed a paper book comprising 22 pages enclosing therein copy of notice u/s 271D of the Act dated 30.6.2022, notification 803814(E) dated 17.9.2021 and 3 numbers case laws relied upon by the assessee. Before us, ld. A.R. of the assessee submitted that the order passed u/s 271D of the Act is barred by limitation and deserve to be quashed. Further, ld. A.R. of the assessee submitted that show cause notice dated 30.6.2022 does not specify the limb for which penalty u/s 271D of the Act is initiated and also there is no satisfaction recorded in the assessment order for which the penalty proceedings u/s 271D of the Act was initiated. Further, ld. A.R. of the assessee submitted that the assessee along with others has sold an ancestral property (agricultural property) for a total consideration of Rs.29,28,000/- in cash to an agriculturist(s) who are relatives (blood related) of the assessee. The assessee’s share out of total sale consideration of Rs.29,28,000/- is amounting to Rs.14,64,000/- and he has received his share of sale consideration in cash on a honest and Bonafide belief that sale proceeds received in cash from sale of agricultural land is not covered u/s 269SS of the Act. Further, the ld. A.R. of the assessee was under the honest and Bonafide belief that property in question was agricultural property and was sold to his relatives (blood related) who are also agriculturist(s) and therefore, the provisions of section 269SS of the Act will not apply in his case.
7. The ld. D.R. has vehemently supported the order of the authorities below and submitted that there is clear violation of the provision of section 269SS of the Act and therefore, the authorities below have rightly levied the penalty of Rs.14,64,000/- and prayed to dismiss the appeal of the assessee.
8. We have heard the rival submissions and perused the materials available on record. On going through the assessment order passed u/s 143(3) of the Act dated 30.4.2019, we take a note of the fact that there is no finding of AO regarding any violation of provision of section 269SS of the Act. The order of the assessment is very cryptic and only states that after carefully examining the details furnished by the assessee, the assessment is completed accepting the returned income. We also take a note of the fact that penalty proceedings u/s 271D of the Act were not initiated by AO on or before the completion of assessment proceedings. Thereafter to the surprise of the assessee, a notice u/s 274 r.w.s. 271D of the Act was issued to the assessee on 30.6.2022 by the ld. JCIT Range-4(3), Bangalore after a gap of more than 3 years. On going through the submissions made before the authorities below, we find that the assessee along with others has sold an ancestral property (agricultural property) situated at Plot No.135/5, Kodagu district, Virajpet Taluk, Balele Hobli, Kottagri village measuring 3.30 acres for a total sale consideration of Rs.29,28,000/- to agriculturists who are relatives (blood related) of the assessee. During the course of proceedings, the assessee explained his shares out of total sale consideration of Rs.29,28,000/- is Rs.14,64,000/- and his share of total sale consideration were received in cash. The assessee was under the honest and Bonafide belief that the agricultural property sold to his relatives who are agriculturists is not covered u/s 269SS of the Act. Further, the assessee was also under the honest and Bonafide belief that as the agricultural land is exempt u/s 2(14) of the Act, the sale proceeds received from the agricultural land is exempt and therefore, sale proceeds received from sale of such agricultural lands is also not covered u/s 269SS of the Act. We are of the considered opinion that assessee has received cash amounting to Rs.14,64,000/- towards the sale consideration for transfer of his agricultural land. In the instant case, the sale of property and consequent receipt of sale consideration in cash are not disputed by the either side. The assessee had only sold an ancestral property on a honest and Bonafide belief that same are not covered under the provisions of the section 269SS of the Act accepted the sale consideration in cash. On identical set of facts, the coordinate bench of ITAT, Bangalore in the case of Smt. Pushpalatha Vs. ITO reported in (2024) 165 taxmann.com 767 has held that where the assessee sold a property and received cash exceeding Rs.20,000/- as part of sale consideration having no knowledge of tax law there was reasonable cause as mandated u/s 273B of the Act for failure to comply with section 269SS of the Act. Hon’ble ITAT therefore, held that the penalty u/s 271D of the Act was not warranted and hence deleted. The relevant paragraph of the Hon’ble ITAT is reproduced below for ease of reference and record:
9. We have heard the rival submissions and perused the material on record. Admittedly, assessee had received cash amounting to Rs.49,10,000/- towards sale consideration for transfer of her immovable property. It is the contention of the learned AR that receipt of such sale consideration is not covered under the provisions of section 269SS of the Act as the scope of said section is limited to receipt of money in the nature of advance. To adjudicate the issue, we need to examine the relevant provision of section 269SS of the Act, which reads as follows:
“269SS. Mode of taking or accepting certain loans, deposits and specified sum.
No persons hall take or accept from any other person (herein referred to as the depositor), any loan or deposit or any specified sum, otherwise than by an account payee cheque……..
Explanation. — For the purposes of this section, —
(iv) “specified sum” means any sum of money receivable, whether as advance or otherwise, in relation to transfers of an immovable property, whether or not the transfer takes place.
(Emphasis supplied)”
10. The doctrine of Ejusdem Generis is a Latin maxim meaning “of the same kind and nature”. According to the Black’s Law Dictionary, “the principle of Ejusdem Generis is where general words follow an enumeration of persons or things by particular and specific words. Not only these general words are construed but also held as applying only to persons or things of the same general kind as those specifically enumerated.”. We are of the view that the word “otherwise” used under section 269SS of the Act cannot include “sale consideration” as the word “otherwise” should be read in accordance with the principle of Ejusdem Generis. The word “otherwise” should draw its colour from other words used in the provisions contained in section 269SS of the Act i.e., “money receivable as an advance”. Invoking the doctrine of Ejusdem Generis, we are of the view that the term “otherwise” should be interpreted in a narrow sense and it must include the words similar to “money receivable, as advance”. In other words, the term “otherwise” cannot be given a wider interpretation. The Hon’ble Supreme Court in the case of Kamlesh Kumar Sharma Vs. Yogesh Kumar Gupta reported in (1998) 3 SCC 45 held that wherever there is term “otherwise” the word is to be given a restricted meaning. The relevant finding of the Hon’ble Apex Court reads as follows:
“13. We find, after giving our careful consideration that in case the appellant’s’ argument is accepted by giving wider interpretation to the word “otherwise”, it would thwart the very object of the Act…. The word “otherwise” has to be read as ejusdem generis, that is to say, in group similar to death, resignation, long leave vacancy, invalidation, person not joining after being duly selected…. Hence the word “otherwise” cannot be given the wide and liberal interpretation which would exclude a large number of expected applicants who could be waiting to apply for the vacancies occurring in the succeeding year in question.”
11. Further, the Hyderabad Bench of the Tribunal in the case of Suman Savings and Investments Pvt. Ltd., reported in (1987) 23 ITD 345 (Hyd.), had accepted the Department’s contention that the principle of Ejusdem Generis should be applied to the term “otherwise” in section 40A(8)(c)(iv) of the Act and that it should be interpreted within the context in which it is used. The relevant finding of the Hyderabad Bench of the Tribunal reads as follows:
“9. We are not persuaded by the contention of Sri Parthasarathy that the term ‘otherwise’ occurring in sub-cl. (iv) of cl. (c) of Explanation to sub-s. (8) of s. 40A would cover the chit fund business. The Legislature in its superior wisdom has used the term ‘otherwise’ in juxtaposition with ‘loans’ and ‘advances’. There is force in the contention of the learned departmental representative that the principle of ejusdem generis should be applied and the term should be interpreted in the context in which it is used. There are several methods of financing in addition to making loans or advances, as for instance, by making deposits for a fixed term, by underwriting or standing as surety or guaranteeing the loan for a fee or a commission. In our view, in the context in which the term ‘otherwise’ occurs in the said subcl. (iv), it is only such other modes of financing which are envisaged but not the chit transactions which are totally alien in this context.”
12. Further, we find that the AO could have initiated penalty proceedings only under section 269ST of the Act instead of section 269SS of the Act. Section 269ST of the Act places restriction on the assessee who receives an amount of Rs.2,00,000/-or more. In the instant case, the amount received as consideration for the transfer of immovable property would be covered under the rigor of section 269ST of the Act and not under section 269SS of the Act. On identical facts, the Chennai Bench of the Tribunal in the case of ITO Vs. Shri. R. Dhinagharan (HUF) (supra) had held that the consideration received on execution of the sale deed would not be covered under section 269SS of the Act but only an advance in relation to sale of property. The Chennai Bench of the Tribunal, after considering the relevant provisions of the Act and the Circular issued by the Board, had held as under :
“12. We have heard the rival contentions, and gone through the facts and circumstances of the case. We find that the Revenue has challenged the correctness of the decision rendered by the CIT(A) vide order dated 30.09.2019 in deleting the penalty levied u/s 271D of the Act vide penalty order dated 12.06.2019. The CIT(A) had deleted the penalty on two counts namely on the non-applicability of the provisions of Section 269SS of the Act to the facts of the present case and on the ground of reasonable cause within the scope of Section 273B of the Act. We noted that the provisions of Section 269SS of the Act was amended w.e.f. 01.06.2015 to include the ‘specified sum’ within its ambit and the said term was defined in Explanation to the said Section which is reproduced as under:
A “specified sum” means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place.
The Budget Speech of the Hon’ble Finance Minister while placing the Finance Bill, 2015 highlighting the intention of the amendment relevant for decision making in the present appeal is captured below:
B. A. Measures to curb black money
3.1 With a view to curbing the generation of black money in real estate, it is proposed to amend the provisions of section 269SS and 269T of the Income-tax Act so as to prohibit acceptance or repayment of advance in cash of Rs. 20,000 or more for any transaction in immovable property. It is also proposed to provide a penalty of an equal amount in case of contravention of such provisions.
The Memorandum forming part of Finance Bill, 201.5 highlighting the intention of the amendment is captured below:
B. MEASURES TO CURB BLACK MONEY
Mode of taking or accepting certain loans, deposits and specified sums and mode of repayment of loans or deposits and specified advances
The existing provisions contained in section 269SS of the Income tax Act provide that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, if the amount of such loan or deposit is twenty thousand rupees or more. However, certain exceptions have been provided in the section. Similarly, the existing provisions contained in section 269T of the Income-tax Act provide that any loan or deposit shall not be repaid, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, by the persons specified in the section if the amount of loan or deposit is twenty thousand rupees or more.
In order to curb generation of black money by way of dealings in cash in immovable property transactions it is proposed to amend section 269SS, of the Income-tax Act so as 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 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.
It is also proposed to amend section 269T of the Income-tax Act so as to provide that no person shall repay any loan or deposit made with it or any specified advance received by it, otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount or aggregate amount of loans or deposits or specified advances is twenty thousand rupees or more. The specified advance shall mean any sum of money in the nature of an advance, by whatever name called, in relation to transfer of an immovable property whether or not the transfer takes place.
It is further proposed to make consequential amendments in section 271D and section 271E to provide penalty for failure to comply with the amended provisions of section 269SS and 269T, respectively. These amendments will take effect from 1st day of June, 2015.
The Notes on Clauses forming part of Finance Bill, 2015 highlighting the intention of the amendment is captured below:
Clause 66 of the Bill seeks to substitute section 269SS of the Income-tax Act relating to mode of taking or accepting certain loans and deposits. The existing provision contained in section 269SS provides that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account if the amount of such loan or deposit is twenty thousand rupees or more.
It is proposed to substitute the said section so as to provide that no person shall take from any person, any loan or deposit or specified sum, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account if the amount of such loan or deposit or specified sum is twenty thousand rupees or more.
It is also proposed to define “specified sum” as any sum of money receivable, whether as advance or otherwise in relation to transfer of an immovable property whether or not the transfer materialises. These amendments will take effect from 1st June, 2015.
12.1 In the present case, the sale consideration was received in cash at the time of execution of multiple sale deeds from different persons for the sale of plots and accepted as genuine in the assessment order completed on 23.05.2018 and admittedly there was no advance received by the seller. The amended provisions of Section 269SS of the Act was applied by the A.O to the facts of the present case only to the sale consideration received as ‘specified sum’ and on such presumption the JCIT levied penalty u/s 271D of the Act. The intention of the amendment is very clear right from the Budget speech of the Finance Minister that the said amendment is brought into the statute in Section 269SS of the Act would get attracted to sum received in cash as an advance in an immovable property transaction and not to the completed transaction namely cash received as a sale consideration at the time of execution of the registered sale deed. In fact, the statute brought in another amendment in Section 269ST of the Act from the assessment year 2017-18 with a view to cover all situations of cash transaction Rs. 2 Lakhs or over other than the situation captured in Section 269SS of the Act. This provision has been explained with more clarity by the CBDT Circular No.19 of 2015, dated 27.11.2015 and the relevant circular reads as under:-
Departmental Circular No.19 of 2015, dated 27-11-2015:-
54. Mode of taking or accepting certain loans, deposits and specified sums and mode of repayment of loans or deposits and specified advances.
54.1 Provisions contained in section 269SS of the Income-tax Act, before amendment by the Act, provided that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, if the amount of such loan or deposit is twenty thousand rupees or more. However, certain exceptions were provided in the section.
54.2 Similarly, the provisions contained in section 269T of the Income-tax Act, before amendment by the Act, provided that any loan or deposit shall not be repaid, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, by the persons specified in the section if the amount of loan or deposit is twenty thousand rupees or more.
54.3 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.
54.4 Section 269T of the Income-tax Act has also been amended to provide that no person shall repay any loan or deposit made with it or any specified advance received by it, otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount or aggregate amount of loans or deposits or specified advances is twenty thousand rupees or more. The specified advance shall mean any sum of money in the nature of anadvance, by whatever name called, in relation to transfer of an immovable property whether or not the transfer takes place.
54.5 Consequential amendments in section 271D and section 271E, to provide penalty for failure to comply with the amended provisions of section 269SS and 269T, respectively, have also been made.
54.6 Applicability: These amendments have taken effect from 1st day of June, 2015.
From the above provisions, Memorandum explaining the intention of amendment by Finance Bill, 2015 including the definition of ‘sum specified’ brought in the Explanation to Section 269SS of the Act, it is clear that the intention for brining this provision was to curb the generation of black money in real estate prohibiting acceptance or repayment of advance in cash of Rs.20,000/- or more for any transaction in immovable property. This was explained by Hon’ble Finance Minister while placing the Finance Bill, 2015 in her budget speech highlighting the intention of the amendment that the amendment in Explanation to Section 269SS i.e., ‘sum specified’ means only applicable for advance receivable, whether as advance or otherwise means advance can be in any manner. Hence, this provision will not apply to the transaction that happens at the time of final payment at the time of registration of sale deed and payment is made before sub-registrar at the time of registration of property. In the present case before us, it is an admitted fact that all sale deeds were registered and cash payment was made at one go before the subregistrar at the time of registration of sale deeds of plots. Hence, in our view, there is no violation of provisions of section 269SS of the Act in the present case in the given facts and circumstances of the case and hence, penalty is not exigible in this case. Hence, we confirm the order of CIT(A) deleting the penalty but on entirely different ground i.e., on jurisdictional issue only. Accordingly, the appeal of the Revenue is dismissed.”
13. Similar view has been held by the Hyderabad Bench of the Tribunal in the case of Ramkumar Reddy Satty Vs. ACIT (supra). The Hyderabad Bench of the Tribunal followed the Order of the Chennai Bench of the Tribunal in the case of ITO Vs. Shri. R. Dhinagharan (HUF) (supra).
14. Further, on the facts of the present case, we find there is “reasonable cause” as mandated under section 273B of the Act, for the failure to comply with section 269SS of the Act. Section 269SS of the Act was amended by the Finance Act, 2015, wherein the term “specified sum” was introduced to include amount received for transfer of immovable property as a measure to curb generation of black money. The relevant extract of the memorandum of Finance Bill, 2015, reads as follows:
B. MEASURES TO CURB BLACK MONEY
Mode of taking or accepting certain loans, deposits and specified sums and mode of repayment of loans or deposits and specified advances
The existing provisions contained in section 269SS of the Income-tax Act provide that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, if the amount of such loan or deposit is twenty thousand rupees or more. However, certain exceptions have been provided in the section. Similarly, the existing provisions contained in section 269T of the Income-tax Act provide that any loan or deposit shall not be repaid, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, by the persons specified in the section if the amount of loan or deposit is twenty thousand rupees or more.
In order to curb generation of black money by way of dealings in cash in immovable property transactions it is proposed to amend section 269SS, of the Income-tax Act so as 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 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.
It is also proposed to amend section 269T of the Income-tax Act so as to provide that no person shall repay any loan or deposit made with it or any specified advance received by it, otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount or aggregate amount of loans or deposits or specified advances is twenty thousand rupees or more. The specified advance shall mean any sum of money in the nature of an advance, by whatever name called, in relation to transfer of an immovable property whether or not the transfer takes place.
It is further proposed to make consequential amendments in section 271D and section 271E to provide penalty for failure to comply with the amended provisions of section 269SS and 269T, respectively.
These amendments will take effect from 1st day of June, 2015.
[Clauses 66, 67, 69 & 70]
15. In the present case, there was no intention, whatsoever, to generate unaccounted money/black money as the assessee had recorded the receipt of entire cash in the registered sale deed and duly disclosed the same in the return of income filed. Assessee had also claimed exemption under section 54 of the Act towards construction of residential house. In this context, it is pertinent to note that the claim made by the assessee under section 54 of the Act has been allowed by the AO in the assessment completed. Copy of the bank statement and the Assessment Order dated 09.12.2019 is placed on record. Therefore, it is clear that there is no unaccounted money / black money in the transaction. Moreover, we find that in this case there was no agreement to sell executed between the parties as is evident from the sale deed. Therefore, the assessee had no legal right to enforce the sale. All the payments were made through DD and cheques and cash was paid to the assessee only on the date of sale deed being executed. Hence, denial by the assessee to receive the consideration in cash would have resulted in failure of sale of the said property. Moreover, the amendment effected by Finance Act, 2015, to section 269SS of the Act, which had laid a restriction for receiving cash for transfer of immovable property would not have come to the knowledge of the assessee who is a woman having elementary education and no knowledge of tax laws. She would have not been under a belief that there was contravention of any provision of the Act. On identical facts, the following judicial pronouncements had held that there is “reasonable cause” as mandated under section 273B of the Act :
a. Smt. Vijapurapu Sudha Rao reported in [2023] 157 taxmann.com 669 (Visakhapatnam – Trib.)
b. Anuradha Chivukula Challa in IT(IT)A No.585/Bang/ 2022 : Asst. Year 2017-2018 dt. 14.09.2022
c. Sri Padmanabha Mangalore Chowta in ITA No.1147/Bang/2022 dt. 07.03.2023
d. Narendrakumar Chunilal Soni ITA No. 195/A11d/2022 dt. 17.05.2023
e. Kanchumarthi Venkata Sita Ramachandra Rao, Rajahmundry reported in 2022 (9) TMI 53 – ITAT VISAKHAPATNAM
16. In view of the aforesaid reasoning and judicial pronouncements cited, we hold that on the facts of the instant case, penalty under section 271D of the Act, is not warranted and we delete the same. It is ordered accordingly.”
8.1 Respectfully following the above decision of this coordinate bench in the present case also, there was no intention whatsoever to generate unaccounted money/black money as the assessee had recorded the entire receipt of cash in the registered sale deed and duly disclosed the same not only in the return of income but also during the course of assessment proceedings. The ld. AO has also accepted the returned income while passing order u/s 143(3) of the Act. In view of the aforesaid reasoning and judicial pronouncements cited, we hold that the fact of the instant case penalty u/s 271D of the Act is not warranted and accordingly, we delete the same. It is ordered accordingly.
9. In the result, appeal filed by the assessee is allowed.
Order pronounced in the open court on 20th Dec, 2024
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