TaxTMI 
TaxTMI 
2025 (12) TMI 1712
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....ct. Subsequently, the A.O., the Joint Commissioner of Income Tax, Range-6, Hyderabad, initiated penalty proceedings under Section 271D of the Income Tax Act, 1961, and a Show Cause notice under Section 274 r.w.s. 271D of the Act, was issued on 26.08.2019 and called upon the assessee to explain as to why penalty shall not be levied for contraventions of provisions of section 269SS of the Income Tax Act, 1961 for accepting sale consideration of Rs. 15,78,000/- in cash. In response, the assessee, vide letter dated 12.09.2019, submitted that, the assessee had received consideration of Rs. 15,78,000/- in cash for sale of property, and the same has been received in the presence of witnesses at the time of registration of the property and, said transaction cannot fall within the ambit of loan or deposit or "Specified sum" as defined under Section 269SS of the Income Tax Act, 1961, and consequently, penalty under Section 271D of the Act, cannot be levied. The assessee also relied upon certain judicial precedents, including the decision of the Hon'ble Apex Court in the case of Assistant Director of Income Tax Vs. Kumar A.B. Shanti (255 ITR 258) and the decision of the Hon'ble Gujarat High C....
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....71D of the Income Tax Act, 1961. 6. The Ld. CIT(A), after considering the relevant submissions of the assessee and also taking note of the reasons given by the A.O. for levy of penalty, observed that, as per the amended provisions of Section 269SS, by insertion of the term "specified sum" with effect from 01.06.2015, any sum means any sum of money receivable, whether as advance or otherwise, in relation to the transfer of immovable property, whether or not the transfer takes place, attracts the provisions of Section 269SS of the Act, which warrants penalty under Section 271D of the Act. In the present case, the assessee has received cash on 11.04.2016 for sale of immovable property for a sum of Rs. 15,78,000/-, which falls under the definition of "specified sum" and therefore, there is no error in the reasons given by the A.O. to levy penalty under Section 271D of the Act. Thus, the Ld. CIT(A) rejected the explanation of the assessee and sustained the penalty levied by the A.O. 7. Aggrieved by the order of Ld. CIT(A), the assessee is now in appeal before the Tribunal. 8. The learned counsel for the assessee Shri C. Maheshwar Reddy, C.A. referring to the additional grounds ....
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.... the agreement dated 15.05.2015, which is much before the date of amendment to Section 269SS of the Act i.e., by insertion of the definition of "specified sum" which includes any sum received for transfer of any immovable property, whether or not the registration takes place and therefore, invoking the said provisions for the genuine transactions between the parties, is contrary to the law. Therefore, he submitted that, the penalty levied by the A.O. should be deleted on merits. In this regard, he relied upon the decision of ITAT Hyderabad Bench in the case of Ramkumar Reddy Satty Vs. JCIT in ITA No.488/Hyd/2023 and also the decision of ITAT Chennai Bench in the case of the ITO Vs. Sri R. Dinagharan (HUF) in ITA No. 3329/Chny/2019. 11. The Learned Senior A.R. for the Revenue, Dr. Sachin Kumar, on the other hand, supporting the order of the Ld. CIT(A), submitted that, on a plain reading of Section 271D of the Act, there is no requirement of any proceedings under the Act for initiation of penalty proceedings and further, there is no requirement of any satisfaction from the A.O. because, the authority initiating and imposing the penalty are different from the A.O. Therefore, the re....
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....nt of consideration for sale of property in cash. Therefore, there is a reasonable cause for the assessee to accept the cash consideration for sale of property, and the case of the assessee falls within the ambit of Section 273B of the Income-tax Act, 1961. 14. We have given our thoughtful consideration to the reasons given by the A.O. to impose penalty u/s 271D of the Act in light of various arguments of the assessee and we ourselves do not subscribe to the reasons given by the A.O. for the simple reason that, the assessee had entered into agreement for sale of property and had also received Rs. 15,00,000/- before the amendment came to provisions of Section 269SS of the Act, by insertion of 'specified sum' which includes any amount received towards sale of property whether the transactions takes place or not. In the present case, there is no dispute with regard to the fact that, the assessee had entered into an agreement for sale of property on 15.05.2015 and also received a sum of Rs. 15,00,000/- advance in cash and finally executed the sale deed in favour of the purchaser on 11.04.2016 and received the balance consideration of Rs. 15,78,000/- in cash in the presence of witnes....