Income Tax Appellate Tribunal

Income Tax Appellate Tribunal, Delhi: In an appeal filed by the assessee against an order of the Commissioner of Income Tax (Appeals) (‘CIT (A)’), wherein the CIT (A) dismissed an appeal against the order of the Joint Commissioner of Income Tax (JCIT), levying penalty of Rs. 28,13,000/- under Section 271-D of the Income Tax Act, 1961 (‘the Act’) for the violation of Section 269-SS of the Act, the two-member Bench of Yogesh Kumar U.S. (Judicial Member) and Dr. B. R. R. Kumar (Accountant Member), allowed the appeal and set aside the impugned order imposing penalty. The Tribunal held that Section 269-SS of the Act does not deal with the receipt of ‘sale consideration of immovable property’ in cash, and only deals with loan or deposit.

The Assessing Officer said that the assessee had received the sale consideration in cash an amount exceeding Rs.20,000, which is in violation of the provisions of Section 269-SS of the Act. Thereafter, the matter was referred to the JCIT to consider levy of penalty under Section 271-D of the Act for violation of provisions of Section 269-SS of the Income Tax Act, 1961. 15 more cash transactions against sale of property were done by the assessee, thus, a total cash transaction of Rs. 1,40,65,000/- was done, resulting in the assessee’s share at Rs. 28,13,000/-.

The JCIT recorded that the assessee failed to prove that the said transactions were declared in the income tax returns and that there was any reasonable cause for receiving the cash payment. Therefore, the JCIT levied penalty of Rs. 28,13,000/- under Section 271-D of the Act for violation of Section 269-SS of the Act, vide order dated 20-09-2019. The assessee preferred an appeal against the JCIT’s order before the CIT(A), which came to be dismissed. Hence, the present appeal was filed on the grounds that the impugned penalty order passed by the JCIT was illegal, arbitrary, bad in law and without jurisdiction. The assessee was also aggrieved by non-consideration of the fact that he is an uneducated person and was not aware of the provision of Section 269-SS, which was newly amended.

The Tribunal perused Section 271-D and 269-SS of the Act and said that Section 269-SS of the Act has a specific bar to receive a sum more than 20,000/- from any other persons by way of loan or deposit. The Tribunal explained that Section 269-SS of the Act does not deal with the receipt of ‘sale consideration of immovable property’ in cash, but only deals with loan or deposit. Therefore, the Tribunal said that Section 269-SS of the Act was wrongly interpreted by the Authorities below, while imposing the penalty in the matter at hand, wherein the subject matter was receipt of sale consideration in cash in respect of selling the immovable properties.

Thus, the Court allowed the assessee’s appeal and held that the Assessing Officer had committed an error in invoking Section 269-SS read with Section 271-D of the Act and imposing of the penalty. Accordingly, the penalty imposed by the Assessing Officer, confirmed by the CIT(A) was quashed.

[Wahid Ali v. JCIT, 2024 SCC OnLine ITAT 259, Order Dated: 08-01-2024]

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