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TMI Blog2023 (2) TMI 165X X X X Extracts X X X X X X X X Extracts X X X X ..... and amount and also amount received in cash. In fact, the assessee never disputed fact that sum of Rs. 14 lakhs has been received on sale of immovable property. However, the only argument of the assessee was that out of Rs. 14 lakhs, a sum of Rs. 11,50,000/- has been received on 10.02.2016 and further a sum of Rs. 2,50,000/- has been received on 07.11.2016. We find no merit in arguments of the assessee that a sum of Rs. 11,50,000/- has been received by way of cash on 10.02.2016, because the information collected by the AO clearly indicates that as on the date of sale i.e., 07.11.2016, the assessee has received a sum of Rs. 14 lakhs. Therefore, we are of the considered view that the assessee has received a sum of Rs. 14 lakhs in cash for sale of immovable property in contravention of provisions of section 269SS of the Act, and liable for penalty u/s. 271D of the Act. Thus, levy penalty u/s. 271D for violating provisions of section 269SS of the Act Confirmed - Decided against assessee. - ITA No. 565/Chny/2022 - - - Dated:- 18-1-2023 - SHRI MAHAVIR SINGH, VICE PRESIDENT AND SHRI G. MANJUNATHA, ACCOUNTANT MEMBER For the Appellant : Shri. V. S. Jayakumar , Advocate For ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explanation that the medical exigencies necessitated that the cash is needed for emergent purposes and the same constitute a reasonable cause as per Sec 273 of the Income tax Act, 1961 and no penalty is leviable under Sec 271D as though there was a violation of Sec 269SS of the Income tax Act, 1961. 8. The lower authorities have violated the principles of natural justice assessment, penalty action have been taken without considering the J transaction and the parties involved in the to the transaction. The appellant objects to the entire levy of penalty including the sum determined in the order. 9. Penalty proceedings invoked after six months from intimation date are not valid (386 ITR 719 SC). 10. Commissioner (Appeals ought to have recognized that the Registrar documents registered the sale deed reflecting cash transaction. 11. While there was no loss to Revenue due to the bonafide transaction, a penalty is not leviable, just because it is lawful to do so. 12. The appellant craves leave to adduce additional grounds of appeal at the time of hearing. 3. The brief facts of the case are that during the financial year 2016-17 relevant to assessment year 20 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of taking or accepting certain loans, deposits and specified sum. 269SS. No person shall take or accept from any other person (herein referred to a the depositor), any loan or deposit or any specified sum, otherwise than by a account payee cheque or account payee bank draft or use of electronic clearing system through a bank account [or through such other electronic mode as may be prescribed], if, (a) the amount of such loan or deposit or specified sum or the aggregate amount of such loan, deposit and specified sum; or (b) on the date of taking or accepting such loan or deposit or specified sum, loan or deposit or specified sum taken or accepted earlier by such person f the depositor is remaining unpaid (whether repayment has fallen due or not the amount or the aggregate amount remaining unpaid; or (c) the amount or the aggregate amount referred to in clause (a) together with the amount or the aggregate amount referred to in clause (b), is twenty thousand rupees or more: Provided that the provisions of this section shall not apply to any loan or deposit or specified sum taken or accepted from, or any loan or deposit or specified sum taken or accepted by, ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sessee has contravened provisions of section 269SS of the Income Tax Act, 1961 and therefore it is a fit case for levying penalty u/s. 271D of the I.T. Act, 1961. Under the provisions of section 271D of the Act, the amount of penalty shall be a sum equal to the amount of the loan or deposit or any sum so taken or accepted. Accordingly, penalty of Rs. 14,00,000/- (Rupees Fourteen lakhs Only) is hereby levied on the assessee u/s. 271D(1) of the Act for failure to comply with the statuary provisions of section 269SS of the Act. 4. Being aggrieved by the assessment order, the assessee preferred an appeal before the CIT(A). Before the CIT(A), the assessee submitted that the property has been sold by Shri. Natarajan in his HUF status and also declared relevant capital gains in the return of income filed by the HUF. The assessee had filed necessary evidence including income tax returns filed by HUF for relevant assessment year to prove that rental income from property has been offered in the hands of HUF. Therefore, penalty cannot be levied in the hands of the individual. The CIT(A), after considering relevant submissions and also by taking note of various facts observed that the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of electronic clearing system through a bank account [or through such other electronic mode as may be prescribed and therefore contravened the provisions of Sec. 269SS which attracts penalty u/s. 271D of the Act. 5. From the facts brought out above, I am satisfied that the assessee has contravened provisions of section 269SS of the Income Tax Act, 1961 and therefore it is a fit case for levying penalty u/s. 271D of the I.T. Act, 1961. Under the provisions of section 271D of the Act, the amount of penalty shall be a sum equal to the amount of the loan or deposit or any sum so taken or accepted. Accordingly, penalty of Rs. 14,00,000- (Rupees Fourteen lakhs Only) is hereby levied on the assessee u/s. 271D(1) of the Act for failure to comply with the statuary provisions of section 269SS of the Act. 5. The Ld. Counsel for the assessee, submitted that the penalty u/s. 271D of the Act has been levied on wrong person, even though, the assessee has filed necessary evidences including ITR returns filed by the HUF to prove that property has been purchased by HUF in the year 2013 and also relevant capital gains on sale of property has been offered by the HUF only. He further referrin ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... F. Therefore, penalty cannot be levied in the individual status. 8. We have given our thoughtful consideration to the reasons given by the ld. Counsel for the assessee in light of facts brought out by the Assessing Officer and we ourselves do no subscribe to the reasons given by the Counsel for the assessee, for the simple reason that if you go by PAN number coated in purchase and sale deed, it was his individual PAN number and thus, we can safely conclude that the property has been purchased in his individual capacity and also sold in his individual capacity. As regards, the claim of the assessee that property was owned by HUF, if you go by date of generating PAN number for HUF, the assessee HUF has generated PAN number on 03.03.2017 much after the date of sale of asset. Further, the appellant has filed return for HUF capacity on 30.03.2018. In our considered view, the documents relied upon by the assessee can only be considered as an afterthought to circumvent penalty proceedings initiated in his individual capacity. Therefore, we reject arguments of the ld. Counsel for the assessee that penalty proceedings has been initiated on wrong person/assessee. 9. Having said so, let ..... X X X X Extracts X X X X X X X X Extracts X X X X
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