Penalty under section 271D upheld for cash receipt exceeding limit despite claims of wrong deed entries

The ITAT Chennai dismissed the assessee's appeal against penalty under section 271D for violating section 269SS provisions. The assessee sold immovable property and received Rs. 1,60,00,000 in cash as per the registered sale deed. The assessee claimed the deed wrongly recorded cash payment when it was actually debt adjustment through journal entry. The tribunal rejected this contention, stating no court can accept claims of wrong entries in documents duly signed by both parties and registered by Sub-Registrar without material evidence. The CIT(A)'s penalty confirmation was upheld.

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Issues involved:
The appeal against the penalty levied under section 271D of the Income Tax Act, 1961 for accepting part of the sale consideration in cash in violation of section 269SS.

Issue 1 - Condonation of Delay:
The appeal was delayed by 24 days, but the delay was condoned as the assessee provided sufficient cause, and the appeal was admitted for adjudication.

Issue 2 - Penalty under section 271D:
The Assessing Officer imposed a penalty of Rs. 1,60,00,000 under section 271D for accepting part of the sale consideration in cash, violating provisions of section 269SS. The ld. CIT(A) upheld the penalty.

Assessee's Argument:
The assessee contended that the transaction was an adjustment of an existing debt through a journal entry, not a cash transaction. They relied on a decision of the Madras High Court and submitted evidence to support their claim.

Revenue's Argument:
The Revenue argued that the assessee failed to provide sufficient evidence to support their claim of an existing debt adjustment. They contended that the case law cited by the assessee was not applicable to the present case.

Tribunal's Decision:
The Tribunal noted that the registered deed of sale indicated receipt of Rs. 1,60,00,000 in cash, which violated section 269SS. The assessee's argument of a wrong entry was deemed unacceptable without substantial evidence. The Tribunal upheld the penalty, stating that the ld. CIT(A) correctly confirmed it, leading to the dismissal of the appeal.

Conclusion:
The Tribunal dismissed the appeal, upholding the penalty imposed under section 271D of the Income Tax Act, 1961. The decision was pronounced on 7th February, 2024, in Chennai.

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