2026 (6) TMI 362

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....raised the following grounds of appeal: "1. The learned CIT(A)/NFAC erred in law and on facts in confirming the penalty of Rs. 5,45,000 levied u/s 271D, without appreciating that the transaction was genuine, recorded through a registered sale deed, and fully disclosed in the return of income. 2. The learned authorities failed to appreciate that Section 269SS is primarily intended to curb unaccounted loans, deposits, and black-money transactions, and not bona fide sale transactions of capital assets where the entire consideration is disclosed and taxed. 3. The learned CIT(A) erred in holding that penalty u/s 271D is automatic, ignoring the mandatory protection provided under Section 273B, which clearly states that ....

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....balance amount was received through banking channels. The assessee filed return of income for AY 2019-20 on 26.06.2020, declaring total income of Rs. 3,46,650/-, which included Long Term Capital Gains (in short "LTCG") arising from the subject property as well as another property sold during the year. The Assessing Officer (in short "Ld. AO") held that since the assessee received cash it is in contravention of the provisions of section 269SS of the Income Tax Act, 1961 (in short "the Act"). The Ld. AO issued several show cause notices as well as the penalty proceedings u/s 271D of the Act were initiated. The assessee submitted its reply dated 20.08.2022 via email signed by the chartered accountant. The assessee explained that he is purely a....

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....ceived the cash component and rest of the amount was received through cheques only. The Ld. AR relied upon the following decisions: 1. CIT v. Triumph International Finance (1) Ltd. [345 ITR 270 (Bom.) 2. CIT v. Idhayam Publications Ltd. [285 ITR 221 (Mad.) 3. CIT v. Lakshmi Trust Co. [303 ITR 99 (Mad.) 4. CIT v. Ajanta Dyeing & Printing Mills [264 ITR 505 (Guj.) 5. Omec Engineers v. CIT [294 ITR 599 (Jhar.) 6. CIT v. Lokhpat Film Exchange [304 ITR 172 (Raj.)] 7. CIT CIT v. Balaji Traders [303 ITR 312 (Mad.) 8. CIT v. Vardaan Fashion [2015] 53 taxmann.com 260 (Del.) 5.1 The Ld. AR further submitted that levy of penalty u/s 271D of the Act on the same amount will cause....