ITAT deletes Penalty Imposed for accepting Cash Payment for Sale of Land: No Sufficient Reasons to show Tax Evasion Attempt [Read Order]

The Banglore Bench of the Income Tax Appellate Tribunal (ITAT), recently deleted the penalty imposed under Section 271D of the Income Tax Act, 1961 as the revenue could not show sufficient reasons to prove tax evasion attempt. 

The appeal by assessee was that the Commissioner of Income Tax (Appeals) [CIT(A)] had erred in law in upholding the order of the Assessing Officer (AO), imposing penalty under Section 271D of the Income Tax Act.

The assessee was an NRI. During the relevant assessment year, the assessee had sold two immovable properties on 26.12.2016 and received part sale consideration in cash. Since there was violation of provisions of Section 269SS of the Income Tax Act, the AO, initiated a penalty under Section 271D of the Income Tax Act. To the notices issued to the assessee calling for her explanation, there was no response.

Since the assessee failed to offer satisfactory explanation, the AO imposed a penalty amounting to Rs.12,37,000 (the amount equal to the sum accepted by the assessee in contravention of provisions of Section 269SS of the Income Tax Act).

Aggrieved by this, the assessee approached the CIT(A), who rejected the appeal of the assessee, aggrieved by  which the assessee has filed the present appeal before the tribunal.

The learned Departmental Representative, submitted that the assessee has not made out a case of reasonable cause as mandated in the Act for the waiver of penalty.

It was observed by the Tribunal comprising Judicial Member George George K and Accountant Member Laxmi Prasad Sahu that, “the intention of the assessee was not to defraud the  revenue by violating the provisions of the Act or by evading taxes. The same is evident from the fact that the cash receipts have been duly disclosed in the sale deed as well as the income tax returns. The copies of the sale deeds are enclosed in the paper book filed by the assessee”, and in favour of the appellant-assessee, it was held that the penalty was unjustified in law and deleted the penalty.

Support our journalism by subscribing to Taxscan premium. Follow us on Telegram for quick updates