ITAT overturns penalty for cash sale of property, citing no black money involvement.

The ITAT allowed the appeal and deleted the penalty imposed under section 271D for receiving cash on the sale of immovable property, holding that the transaction did not involve black money dealings in cash. The ITAT rejected the argument that sale consideration is excluded from the purview of Section 269SS, emphasizing the wider definition of immovable property to include both land and buildings. The digital signatures on the penalty order were deemed valid, and the ITAT concluded that the penalty was not justified in this case.

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Issues involved: Confirmation of penalty under section 271D for receiving cash on sale of immovable property in contravention of Section 269SS of the Act.

Summary:

Issue 1: Condonation of delay in appeal
The assessee appealed against the penalty imposed under section 271D for receiving Rs. 5 Lacs in cash on the sale of an immovable property of Rs. 50 Lacs. The delay of 34 days in filing the appeal was condoned despite opposition from the Department.

Issue 2: Violation of Section 269SS
The penalty was levied by the Assessing Officer under Section 271D due to the violation of Section 269SS, which prohibits accepting specified sums in cash in relation to the transfer of immovable property. The penalty was confirmed by the Commissioner of Income Tax (Appeals) [CIT(A)].

Issue 3: Interpretation of Section 269SS
The CIT(A) upheld the penalty, emphasizing that the intention of Parliament in amending the section was to curb black money in cash dealings in immovable property transactions. The argument that the sale consideration was disclosed as income was deemed simplistic, and the wider definition of immovable property includes both land and buildings.

Issue 4: Adjudication by ITAT
The ITAT rejected the argument that sale consideration is excluded from the purview of Section 269SS, stating that the intention of the amendment was to include sale consideration arising from immovable property. The digital signatures on the penalty order were deemed valid, and the ITAT concluded that the penalty was not justified in this case as the transaction did not involve black money dealings in cash.

In conclusion, the ITAT allowed the appeal and deleted the penalty imposed under section 271D.

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