Kesireddy Ravinder Reddy Vs ITO (ITAT Hyderabad)
ITAT Hyderabad Deletes Sec 271D Penalty – Cash Received as Sale Consideration of Property Not Covered by Sec 269SS
In Kesireddy Ravinder Reddy & Yata Ramchander vs ITO (AY 2017-18), the ITAT Hyderabad allowed the assessees’ appeals and deleted penalty levied u/s 271D for alleged violation of sec 269SS. The assessees had received cash of ₹15.65 lakh (₹7.82 lakh each) as part of registered sale consideration for transfer of immovable property, which the JCIT treated as “specified sum” and imposed penalty equal to the cash amount.
The Tribunal held that cash received at the time of execution of registered sale deed is distinct from advance money contemplated under the amended provisions of sec 269SS. Referring to Finance Bill 2015 intent and CBDT Circular explaining “specified sum,” ITAT observed that the amendment targeted cash advances in real-estate transactions to curb black money, not final consideration paid before the Sub-Registrar. Hence, sec 269SS was held inapplicable to completed sale transactions.
Further, ITAT noted additional legal defects — absence of assessment proceedings and lack of recorded satisfaction by AO, as well as limitation issues — which independently rendered the penalty unsustainable. Accordingly, penalties levied u/s 271D in both cases were deleted and appeals allowed.
FULL TEXT OF THE ORDER OF ITAT HYDERABAD
