ACIT Vs Bapu Reddy Jala (ITAT Hyderabad)
The Revenue appealed against the order of the Commissioner of Income Tax (Appeals) for Assessment Year 2019-20, which had deleted a penalty imposed under Section 271D of the Income-tax Act. The dispute arose from the receipt of ₹75 lakh in cash by the assessee as advance sale consideration for land from the Managing Partner of Bharat Engineering Enterprises. The cash was recovered by the police during investigation of a theft and, during assessment, the Assessing Officer treated the amount as unexplained income under Section 69A read with Section 115BBE. Simultaneously, penalty proceedings under Sections 269SS and 271D were initiated for accepting the amount in cash.
The Commissioner (Appeals) deleted the penalty after holding that once the Revenue had treated the amount as unexplained income, it could not simultaneously treat it as a “specified sum” for invoking Sections 269SS and 271D. Relying on the decisions of the Delhi High Court in CIT v. R.P. Singh & Co. Pvt. Ltd. and CIT v. Standard Brands Ltd., the Commissioner (Appeals) held that undisclosed income and loans, deposits or specified sums under Section 269SS are mutually inconsistent concepts. Accordingly, the penalty of ₹75 lakh was deleted without examining the remaining procedural grounds.
