TaxTMI 
TaxTMI 
2023 (2) TMI 165
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....uthorities erred in holding and not appreciating the crucial fact that the sale consideration received cash and cheque upon the sale of the property equally owned by the appellant in his HUF status/capacity and the appellant's wife and the sale was not effected in the individual capacity of the appellant but in the capacity as a kartha of HUF. 4. The appellant has furnished his individual PAN ADCPN3023D in the sale deed for identification purpose only and had replied to the penalty notices that he is not the owner of the property and his HUF and his wife Kalaiselvi are the owners and the penalty cannot be levied on him. 5. The lower authorities have wrongly levied penalty of Rs. 14,00,000/- in his individual status when the assessee has no locus standi to the impugned transaction in question and he is a non-entity for all practical purposes viz to the sale of the property and he cannot be called upon to give the explanation for the receipt of cash merely because his PAN Number has been mentioned in the sale deed wrongly. 6. The lower authorities erred in stating that the HUF PAN was generated later on only and hence the individual has to be taxed is a....
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.... convinced with the explanation furnished by the assessee and according to the AO, the arguments of the assessee that property was owned by Shri. Natarajan in his HUF status is devoid of merits, because when the property has been purchased in the year 2013, the assessee had given his individual PAN number and further, the HUF has generated PAN number on 03.03.2017, after the date of sale. Therefore, rejected arguments of the assessee that consideration has been received by assessee, HUF and hence, penalty cannot be levied in the hands of the individual and levied penalty of Rs. 14 lakhs u/s. 271D of the Act for failure to comply with the statuary provisions of section 269SS of the Act. The relevant findings of the AO are as under: "3. The contention of the assessee has been carefully examined. It is claimed by the assessee that the property was purchased jointly by Sri Natarajan in his HUF status (PAN: ABDHS2089O) and his wife Smt. N Kalaiselvi (PAN: ARJPK 2926R) each having 50% of share and the rental income from this property has been admitted in their hands and filed their income tax returns including this rental income. However, as per the PAN data base of the Departme....
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....e person by whom the loan or deposit or specified sum is taken or accepted, are both having agricultural income and neither of them has any income chargeable to tax under this Act. Explanation.--For the purposes of this section,- (i) "banking company" means a company to which the provisions of the Banking Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking institution referred to in section 51 of that Act; (ii) "co-operative bank" shall have the same meaning as assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949); (iii) "loan or deposit" means loan or deposit of money; (iv) "specified sum" means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place. Penalty for failure to comply with the provisions of section 269SS. 271D. (1) If a person takes or accepts any loan or deposit or specified sum] in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit or specified sum so taken or accepted. ....
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....-18, the assessee has received a sum of Rs. 14,00,000- in cash on sale of immovable property from M Gomathi (PAN:ASTPG6321R) in contravention of provisions of Sec. 269SS of the Income Tax Act, 1961. The mode of receipt of the amounts was otherwise than by an account payee cheque or account payee bank draft {or use of electronic clearing system through a bank account. The relevant data collected from the Sub Registrar's Office is reproduced below: ---------------- From the above it is clear that the assessee has received a portion of sale proceeds in cash contravening the provisions of section 269SS of the Income Tax Act, 1961. Hence, penalty proceedings u/s. 271D of the Income Tax Act, 1961 was initiated in this case for AY 2017-18 by issue of notice u/s. 274 r.w.s. 271D dated 23.3.2020. 3. The contention of the assessee has been carefully examined. It is claimed by the assessee that the property was purchased jointly by Sri Natarajan in his HUF status (PAN: ABDHS2089D) and his wife Smt. N Kalaiselvi (PAN: ARJPK 2926R) each having 50% of share and the rental income from this property has been admitted in their hands and filed their income tax returns ....
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....hich cannot be sustained. 6. The ld. DR, referring to paper book filed by the assessee submitted that as per sale deed executed by the assessee, the assessee has executed said sale in his individual capacity along with his wife. Further, when the property has been purchased in the year 2013, the assessee had given his individual PAN number. Further, the assessee has filed income tax returns in the status of HUF on 30.03.2018 to circumvent penalty leviable u/s. 271D of the Act. From the above facts, it is very clear that the property has been purchased in his individual capacity and thus, the AO has rightly levied penalty u/s. 271D of the Act and therefore, their order should be upheld. 7. We have heard both the parties, perused materials available on record and gone through orders of the authorities below. The facts borne out from record indicates that the assessee has coated his individual PAN number (AADCPN3023D), when he had executed a sale deed in favour of Smt. M. Gomathi on 07.11.2016. In other words, if you go by PAN number referred to in purchase and sale deed, on both occasions, the assessee has coated his individual PAN number. Therefore, from the above it is abunda....