Section 269SS intended to curb Black Money, does not extend to Genuine Final Consideration: ITAT quashes ₹20 Lakh Penalty [Read Order]
The Tribunal observed that the legislative intent, as clarified in the Finance Bill, 2015, was to restrict cash advances and not to invalidate bona fide cash settlements at registration. It was further noted that S. 269SS does not extend to genuine final consideration paid in cash at the time of registration in front of the Sub-Registrar.
![Section 269SS intended to curb Black Money, does not extend to Genuine Final Consideration: ITAT quashes ₹20 Lakh Penalty [Read Order]](https://images.taxscan.in/h-upload/2025/08/28/2081411-itat-delhi-penalty-taxpayer-itat-penalty-taxscan.webp "Section 269SS intended to curb Black Money, does not extend to Genuine Final Consideration: ITAT quashes ₹20 Lakh Penalty [Read Order]")
The Income Tax Appellate Tribunal (ITAT), Cochin Bench, has set aside a penalty of ₹20 lakh levied under Section 271D of the Income Tax Act, 1961, in a property transaction case, ruling that cash received as final consideration at the time of registration does not violate Section 269SS of the Income Tax Act.
The case involved assessee Bhaskar Thattaruthodiyil Nair of Palakkad, Kerala, who was penalised by the tax authorities for accepting cash of ₹20 lakh in connection with the sale of immovable property during the assessment year 2017- 18. The National Faceless Appeal Centre (NFAC), Delhi, had earlier upheld the penalty.
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Before the tribunal, the Revenue argued that the statutory bar under Section 269SS prohibits acceptance of cash exceeding ₹20,000, whether as advance or otherwise, in relation to immovable property transactions. The Department insisted that the assessee’s receipt fell within the mischief of the provision.
The assessee, represented by counsel Smt. Divya Ravindran, contended that the amount in question was not an advance but part of the final sale consideration received before the Sub-Registrar at the time of executing the registered deed. It was further submitted that all details of the buyer had been duly disclosed and were never questioned by the authorities.
The bench, comprising Judicial Member Satbeer Singh Godara and Accountant Member Amarjit Singh, found merit in the assessee’s argument. Referring to coordinate bench rulings including Ramkumar Reddy Satty v. ACIT (2024) and R. Dhinagharan (HUF) (2023), the Tribunal reiterated that Section 269SS is intended to curb the circulation of black money through cash advances in property deals. It does not extend to genuine final consideration paid in cash at the time of registration in front of the Sub-Registrar.
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The Tribunal observed that the legislative intent, as clarified in the Finance Bill, 2015, was to restrict cash advances and not to invalidate bona fide cash settlements at registration. Since the payment was a one-time final settlement and not an advance, the penalty under Section 271D was deemed unsustainable.
Accordingly, the ITAT ordered deletion of the penalty and allowed the appeal in favour of the assessee on September 25, 2024.
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