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.
