Penalty for cash receipt before statutory amendment and dismissal for delay both fail where the record shows timely filing.

Cash received under an agreement to sell executed before the operative date of the section 269SS amendment could not attract penalty under section 271D, because the receipt predated the statutory prohibition and the unregistered agreement still had evidentiary value for that limited purpose. The commentary also notes that dismissal of an appeal as time-barred was unsustainable where the appellate record showed timely filing and no actual delay. On those facts, deletion of the penalty and relief to the assessee were warranted.

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Issues: (i) Whether penalty under section 271D of the Income-tax Act, 1961 was sustainable where cash of Rs. 7 lakhs was received under an agreement to sell dated prior to the amendment to section 269SS. (ii) Whether the Commissioner (Appeals) was justified in dismissing the appeal as time-barred.

Issue (i): Whether penalty under section 271D of the Income-tax Act, 1961 was sustainable where cash of Rs. 7 lakhs was received under an agreement to sell dated prior to the amendment to section 269SS.

Analysis: The cash receipt was recorded in the agreement to sell dated 31.01.2015, while the relevant amendment to section 269SS introducing the specified-sum restriction took effect from 01.06.2015. The unregistered nature of the agreement did not displace its evidentiary value for the limited purpose of showing receipt of consideration, especially when the authorities made no effective inquiry to rebut the assessee's version. On these facts, the receipt of cash predated the statutory prohibition.

Conclusion: Penalty under section 271D was not leviable and the deletion of the penalty was warranted.

Issue (ii): Whether the Commissioner (Appeals) was justified in dismissing the appeal as time-barred.

Analysis: The appellate record itself reflected that the appeal had been instituted within time, and the later date treated as the filing date was inconsistent with the order and unsupported by the record. In the absence of actual delay, dismissal on limitation could not stand.

Conclusion: The dismissal of the appeal as time-barred was erroneous.

Final Conclusion: The penalty was unsustainable both on merits and on limitation, and the assessee was entitled to relief.

Ratio Decidendi: Cash received under an agreement to sell before the operative date of the section 269SS amendment cannot attract penalty under section 271D, and a dismissal of appeal for delay cannot survive when the record shows timely filing.

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