Smt. Pushpalatha Vs ITO (ITAT Bangalore)
ITAT Bangalore held that imposition of penalty under section 271D of the Income Tax Act unwarranted as reasonable cause shown for accepting the cash on account of sale of immovable property.
Facts- Assessee is an individual. Assessee had sold a property for Rs.90 lakhs. Out of it, she received cash of Rs.49,10,000/-. During the course of assessment proceedings, it was noticed by the AO that assessee was in receipt of cash of Rs.49,10,000/- on account of sale of property. AO was of the view that accepting cash on account of sale of immovable property was in contravention of provision of section 269SS of the Act which was amended by Finance Act, 2015 w.e.f. 01.06.2015. Accordingly, assessee was issued show cause notice u/s. 274 of the Act r.w.s. 271D of the Act.
AO rejected the explanation of the assessee and held that there is no “reasonable cause” for accepting the cash on account of sale of immovable property and imposed penalty u/s. 271D of the Act. Penalty imposed was confirmed by CIT(A). Being aggrieved, the present appeal is filed.
Conclusion- Held that 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. Further, 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. Thus, penalty u/s. 271D of the Act, is not warranted.
