Verambally Thazhikuniyil Vinodan Vs JCIT (ITAT Cochin)
Ignorance of Law No Excuse- Cochin ITAT confirms Penalty u/s 271D for cash sale consideration; ITAT Cochin: Penalty for Accepting Cash Sale Consideration u/s 271D Upheld – No Relief for NRI Property Dealer
Cochin ITAT dismissed the appeal of an assessee, a Non-Resident Indian engaged in property dealings, & upheld levy of penalty u/s 271D for violation of section 269SS by accepting huge cash consideration on sale of immovable property.
Assessee was subjected to search & seizure operations on 10.02.2016 which revealed that he & his wife had sold property to Sirajul Huda Educational Complex. Although the registered sale deed, executed on 16.06.2015, reflected consideration of only Rs 53.80 lakh, the actual consideration received was Rs 13.72 crore. Out of this, Rs 8.32 crore was received in cash on 15.06.2015, after the amendment to section 269SS became effective from 01.06.2015. JCIT held that this constituted clear violation of section 269SS & levied penalty of Rs 4.16 crore being 50% share of Assessee.
Assessee contended before CIT(A) & later before the Tribunal that penalty was bad in law as proceedings were initiated belatedly, that AO had not recorded satisfaction in the assessment order & that cash received as sale consideration at the time of registration does not come within the ambit of “specified sum” u/s 269SS. It was also argued that major portion of the consideration had been received before the amendment & that balance cash was accepted under compulsion, coupled with ignorance of law about the amended provision to section 269SS, which came into effect just 15 days before the alleged violation took place., which should be treated as reasonable cause.
