Case Law Details
Anuradha Chivukula Challa Vs Additional Commissioner of Income Tax (ITAT Bangalore)
The assessee is a NRI. She is depending on her father, who is aged 87 years for negotiations of sale of the properties. The assessee had submitted passport details evidencing the date of arrival and the date of departure. It is relevant to note from the said details that the assessee had arrived in Bangalore on 24.12.2016 and departed from Bangalore on 04.01.2017. The above sale deeds were executed within the said period of 10 days. The properties sold were held by the assessee from the year 1994. The assessee was finding it difficult to sell these properties since 50% of the interest in the subject properties were initially held by her estranged husband. Pursuant to the judgment of divorce dated 22.03.2006, the Oak Land Country Circuit Court Family Division in the state of Michigam, United States of America has annulled the marriage and upon arbitration, the subject properties were allotted to the assessee. Despite the above arrangement, many buyers were hesitant to buy subject properties directly from the assessee as the name of the husband was part of the documents purchasing them. The disposal of the property was also challenging due to the slump in the real estate market pursuant to the introduction of RERA and other factors. Finally when the assessee’s father found a buyer, the assessee decided to fly down to Bangalore to complete the formalities. On the date of execution of sale deed, the cash was paid. Considering the age of father, the assessee accepted the cash and closed the deal once and for all. The intention of the assessee was not to defraud the revenue by violating the provisions of the Act or by evading taxes. The same is evident from the fact that the cash receipts have been duly disclosed in the sale deed as well as the income tax returns. The copies of the sale deeds are enclosed in the paper book filed by the assessee. As mentioned earlier, due to paucity of time, the urgency and considering various factors that go into finalizing the transaction, the assessee was forced to accept cash to go ahead with the execution of the sale deed. The above facts clearly stipulated a `reasonable cause’ as mandated u/s 273B of the I.T.Act for violation of the provisions of section 269SS of the I.T.Act.
The decision relied on by the learned DR is distinguishable on facts. The assessee in the case relied on by the learned DR, could not discharge the onus as mandated u/s 273B of the I.T.Act to show that he could not get loan by account payee cheque or demand draft, whereas, in the peculiar facts of the instant case, since the assessee was a NRI, who had come for a short visit to India, had to complete the said sale transaction. Hence, there is `reasonable cause’ as mandated u/s 273B of the I.T.Act on facts of the instant case. The Hon’ble Jharkhand High Court in the case of OMEC Engineers v. CIT reported in (2007) 294 ITR 599 (Jhar) had deleted the penalty by considering the urgency of the assessee to make payment, who had borrowed money in violation of provisions of section 269SS of the I.T.Act.
In the light of the above said reasoning and the judicial pronouncements, cited supra, ITAT delete the penalty imposed u/s 271D of the I.T. Act.
FULL TEXT OF THE ORDER OF ITAT BANGALORE
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