The Hyderabad bench of the Income Tax Appellate Tribunal (ITAT) held that the assessee not having any reasonable cause for accepting the consideration, which is more than Rs.20,000/- by way of cash makes the appeal having no merit.
The assessee is an individual and was regularly assessed to tax. The Assessing Officer came to know that assessee accepted cash payment of Rs.14,73,960/- on sale of agricultural land situated at Nadergal Village, R.R. District, in contravention to the provisions of Section 269SS of the Act. Thereafter, the explanation given by the assessee was not satisfactory to the Assessing Officer and hence, he passed order under section 271D of the Act on 29.02.2020 imposing penalty of Rs.14,73,960/- for AY 2017-18.
Feeling aggrieved with the penalty order passed by the assessing officer, assessee filed appeal and thereafter, it was migrated to the CIT(A), NFAC, Delhi, who dismissed the appeal of the assessee. Aggrieved with the order of CIT(A), assessee appealed before the tribunal.
After hearing both the parties, the tribunal noted that the issue was whether the assessee can be he liable for violation of provisions of section 269SS read with Section 271D of the Income Tax Act or not.
For that purposes, the assessee should receive the specified sum by way of cash, while entering into the transaction of sale of immovable property. In the present case, undoubtedly, the appellant has received specified sum in cash and therefore, there was a violation of provisions of Section 269SS read with Section 271D of the Income Tax Act.
In the present case, the exact nature of the Agreement cum Sale of GPA was not known to us. However, from the portion reproduced hereinabove, it is abundantly clear that the assessee got the transfer of title of properties in his favour on the strength of this agreement of sale cum GPA and thereafter, he had put the purchaser in physical possession of the schedule properties.
Therefore, it is wrong on the part of the assessee before us to allege that no penalty can be imposed upon him under Section 271D of the Income Tax Act. It is clear that assessee has admitted to have received an amount of Rs.21,34,375/- by way of cash towards his share of sale consideration and therefore, the assessee has neither disputed the receipt of cash towards the sale of property nor has disputed that he has not received the amount. Thus, the requirements of section 271D are fulfilled as the assessee has received an amount i.e., more than Rs.20,000/- by way cash in violation of section 269SS of the Act.
Furthermore, the last contention raised by the AR before us is that the CIT(A) has wrongly enhanced the penalty and thereafter, issued show cause notice to the assessee. Perusal of the order of CIT(A) from Para 5.1 to 5.3.3 makes it abundantly clear that the notice has been given for enhancement vide order dt.29.02.2020 whereby the CIT(A) sought to enhance from Rs.14,73,960/- to Rs.21,34,375/-. Therefore, this contention of the AR also fails, the tribunal observed.
The two member bench consisting of R.K Panda (Vice President) and Laliet Kumar (Judicial member) held that the assessee not having any reasonable cause for accepting the consideration, which is more than Rs.20,000/- by way of cash and in view of the above, there is no merit in the appeal of the assessee. Thus the appeal was dismissed.
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