TaxTMI 
TaxTMI 
2023 (3) TMI 761
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....e grounds of appeal before the appeal is finally heard or disposed off. 2. The relevant facts of the case are that the assessee resident of House No. 3469, Mohalla Lahorian, Jagraon Distt. Ludhiana for the consideration of Rs. 9,10,000/- sold her flat No. 361, G.F. Blk-G, PKT-7, Sector 16, Rohini, Delhi to Shri Pawan Kumar, C-2/98, Block C, Pocket-2, Sector 16, Rohini, Delhi in the year under consideration. The sale proceeds were accepted in cash. On account of this fact, penalty u/s. 271D of the Act was levied upon the assessee. 2.1. In response to the notice issued u/s. 274 read with Section 271D, the assessee as per record filed written submissions. These are extracted in para 3 of the Penalty order and are reproduced hereinafter for completeness: "3. The counsel of the assessee submitted that the assessee owns very small Janta flat and for the purpose of arranging funds for the marriage of her daughter, the assessee sold her impugned Janta flat for a total consideration of Rs. 9,10,000/-. The registry for the sale of the aforesaid impugned Janta flat was duly executed on 22.11.2016 with Sub Registrar VI, New Delhi vide registration No. 11070. The sale considerati....
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....s relied upon by the assessee in her submission. Accordingly, after due consideration of all facts and circumstances of the case. I am satisfied that the assessee has contravened the proviso of Sec. 269SS of the Income-tax Act, 1961 and-it is a fit case for imposing penalty u/s. 271D of the Income-tax Act, 1961. Accordingly., the penalty of Rs. 9,10,000/- is hereby imposed u/s. 271D of the Income-tax Act, 1961. The assessee is directed to pay the penalty of Rs. 9,10,000/- as per notice of demand." 3. The issue carried in appeal before the First Appellate Authority challenging the levy of penalty was also unsuccessful. For the purposes of completeness, it is necessary to bring out the contentions of the assessee as summed up by the First Appellate Authority referring to facts as available before the AO: c) The contentions of Appellant before the AO are as under:- i. Appellant sold the Janta Flat for arranging funds for marriage of her daughter. Registry for sale was executed on 22.11.2016 with Sub Registrar VI, Delhi. ii. Sale consideration was received in cash on 5 different dates upto 10.10.2016 and e-stamp was purchased on 10.10.2016. ....
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....aid property. vii. It is bona fide and genuine transaction and is no way related to evasion of tax. Section 269SS is not applicable on bona fide genuine transaction. viii. Appellant had proved the reasonable cause for failure to comply with provisions of section 269SS. Thus, statutory relief u/s. 273 be allowed to Appellant. ix. Appellant has relied on number of judgments in support of her contentions. (emphasis supplied) 3.2. The explanation has been discarded again resulting in confirming the penalty order. 4. Aggrieved the assessee is in appeal before the ITAT. 5. The Ld. AR inviting attention to the impugned order relied heavily upon the submissions as found advanced in para 3 of the penalty order and assailed the findings in para 5 submitting that the assessee's husband was doing small job work with a goldsmith in Jagraon and admittedly had no assessable income and consequently was a non-filer of return. It has been argued that due to her husband's incapacity on account of some accident, the assessee had to do the running from Jagraon to Delhi frequently for the sale of the asset and utilized the proceeding for making purcha....
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.... Court in (Sl No. 4) CIT vs. M/s. Harpal Singh Jaswant Singh in ITR No. 14 of 1995 dated 13.09.2006 (P&H); (Sl. No. 5) CIT vs. Speedways Rubber (P) Ltd. reported in [2010] 326 ITR 31 (P&H.); (Sl. No. 6) PCIT vs. M/s. Tehal Singh Khara & Sons, Village Changli Jadid, Ferozepur in ITA No. 248 of 2017 (O & M) and (Sl. No. 9) Judgment of Hon'ble High Court of Allahabad in the case of CIT-II, Agra Vs. Smt. Dimpal Yadav ITA No. 174 of 2015 dated 21.08.2015 it was his prayer that the penalty imposed may be quashed. These decisions were specifically highlighted while simultaneously reliance was also placed upon the other decisions also filed in the Paper Book, namely Hindustan Steel Ltd. vs. State of Orissa [1972] 83 ITR 26 (SC); Motilal Lal Padampat Sugar Mills Co. Ltd. vs. State of Uttar Pradesh & Ors. reported in [1979] 118 ITR 326; Faridkot Bathinda Kshetriya Gramin Bank vs. JCIT reported in [2003] 125 Taxman 268 (ASR.) (MAG.); CIT vs. Saini Medical Store reported in (2005) 276 ITR 79 (P&H); CIT vs. Sunil Kumar Goel reported in [2009] 183 Taxman 53 (P&H); CIT-1 vs. Smt. M. Yesodha reported in [2013] 31 taxman.com 153 (Madras); CIT vs. Maheshwari Nirman Udyog reported in [2008] 170 T....
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....arriage of my elder daughter. 5. That the sale consideration of the aforesaid flat was utilized by me for incurring expenses in relation to the marriage of my daughter. 6. That since my daughter's in laws were residing at Delhi and the venue of the marriage was also at Delhi, as such I done most of the shopping/expenditure etc. in connection with her marriage at Delhi. As such I took all the payments in Delhi and had spent most of it at Delhi itself. Thus the actual utilization of most of the aforesaid funds were at Delhi. 7. That if I took the sale consideration through banking channels then under these circumstances this will cause genuine hardship for me because I maintain the bank account at Jagraon District Ludhiana and the expenditure was be incurred at Delhi. 8. That I was having no knowledge that I cannot take the payments in cash against the sale consideration of property and sale consideration was received in cash under a bona fide belief that I can take sale consideration in cash. Sd/- Deponent Verification I do hereby declare that my above statement is true and correct to the best of my k....
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....ses for the wedding of the daughter, these are some of the relevant consistent explanation on record. Documentary evidence in support of these submissions is available. These facts are also stated on an Affidavit. This remains unrebutted on record. The arguments that the assessee could have arranged her affairs differently is an argument based on ifs and buts of the myriad possible ways of addressing a situation. These arguments to rebut the explanation in the present facts of the case are not relevant to decide whether there was a reasonable cause for failure on the part of the assessee. The fact that there is a failure is also not in dispute. The supporting argument for the justification in accepting cash on 5 different occasions canvassing that the assessee's action was prudent as she could not rely upon the purchaser to make payments by cheques which may or may not be honoured and as argued before the First Appellate Authority that getting the amount deposited by way of RTGS/Cheque in her Jagraon account and then travelling with cash withdrawn at Jagraon to Delhi to make purchases was considered to be unsafe/impractical and alternatively/simultaneously it is seen that as pe....
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....o also weigh judiciously whether the actions are excessive or moderate to address the situation. Applying these yardsticks, considering the consistent explanation available on record, I am satisfied that the assessee has successfully made out a case demonstrating that there was a reasonable cause for her to accept payments on the specific dates and thus, the bona fide explanation offered by the assessee in the peculiar facts of the present case, I find deserves to be accepted. The penalty, accordingly, is directed to be quashed. 8. While coming to the said conclusion, I have taken into consideration the various decisions cited in the orders and relied upon in the proceedings before the ITAT. 9. Before parting, I deem it appropriate to address the specific objection of the Ld. Sr. DR namely that ignorance of law is not an excuse. I find that the said submission correct in law is not open to debate and is a valid submission. However, in the present set of facts though it is pleaded, it need be emphasized that it has not been the reason or rationale for quashing the penalty. At the cost of re-iteration what is required to be seen for confirming or quashing the penalty imposed is....
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....n. The Assessing Officer too busy to meet his own targets may not be sufficiently equipped alone to help these hapless people to be tax compliant. It is my humble opinion that the mindset of the entire tax administration has to change. The journey from colonial times tax collectors as authoritarian figures to people friendly tax administration must start. As an economy India is moving as a juggernaut towards 7 trillion dollars. For achieving this laudable aim, we necessarily need to financially empower and enable all citizens to be ready for this change. The drag on the system by ill equipped vulnerable citizens needs to be addressed on a priority as in the absence of any support, they can fall prey to alienating and divisive forces and could tragically wrongly trust the dubious manipulators of the system instead of placing reliance on the good advice and offices of systematic supportive tax administration of the country. Hence, in my opinion disseminating financial literacy information for ensuring compliances to the citizens cannot be postponed any further as in the absence of relevant information, the public at large comprising of small taxpayers are left floundering hopelessly ....