9911796707
TMI Blog2024 (2) TMI 790X X X X Extracts X X X X X X X X Extracts X X X X ..... ified. Ground no. 1 of the appeal of the assessee stands dismissed. Addition u/s 69A - Source of Cash deposit - Assessee contended that same is received in advance against the sale of property - Levy of penalty u/s 271D - Held that:- Since the AO had recorded a finding that the amount was the unexplained money of the assessee u/s 69A and thus, chargeable income of the assessee. Impliedly, the stand of Ld. AO while treating the amount received in cash as assessee s own money, establishes that it was neither any loan, a deposit nor specified sum. On one hand when the impugned cash receipts are characterized as assessee s own money the same, on the other hand cannot be a specified sum received from someone else in contravention to provisions of section 269SS, therefore, the very foundation and prerequisite to bring such amount within the realm of section 269SS was lost. Consequently, the penalty imposed under section 271D r.w.s. 269SS by the Ld. AO and confirmed by Ld. CIT(A), therefore, is liable to be quashed. Decided in favour of assessee. - Shri Ravish Sood, JM And Shri Arun Khodpia, AM For the Assessee : Shri Y.K. Mishra, Adv. For the Revenue : Shri Satya Pr ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... the Income Tax Act, with the following observations: 5. In view of the amended provisions in section 269SS of the I.T. Act with effect from 01.06.2015, the case of assessee clearly attracts the violation of section 269SS of the l. T. Act and the amount of specified sum was in aggregate of Rs. 5,30,000/- in cash on 20.02.2016 apart from cash advance of Rs. 21,000/- and 2,00,000/- received in cash from Shri Shiv Shambhu Singh in cash during F.Y. 2015-16 and such facts, the assessee himself admitted in his reply during the course of re-assessment proceedings, therefore, the assessee violated the provisions of section 269SS of the l. T. Act and it is fit case for levy of penalty u/s 27 ID of the I.T. Act. The relevant extract of penalty 271 D of I.T. Act is as under:- Penalty for failure to comply with the provisions of section 269SS 271D. [(1)] If a person takes or accepts any loan or deposit [or specified sum] in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit [or specified sum] so taken or accepted.] . 6. Considering the facts of the case and non- submission of sati ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ll not apply to any loan or deposit or specified sum, where the person from whom the loan or deposit or specified sum is taken or accepted and the person by whom the loan or deposit or specified sum is taken or accepted, are both having agricultural income and neither of them has any income chargeable to tax under this Act. Explanation. - For the purposes of this section,- 1. banking company means a company to which the provisions of the Banking Regulation Act, 1949 (10 of 1949) applies and includes any bank or banking institution referred to in section 51 of that Act; 2. co-operative bank shall have the same meaning as assigned to it in Part V of the Banking Regulation Act, 1949 (10 of 1949) ; 3. loan or deposit means loan or deposit of money; 4. specified sum means any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place.] 6. In the present case, admittedly, the assessee has received a sum of Rs. 7,51,000/- in cash on account of sale/agreement of immovable property which is a specified sum as described in explanation 4 to section 269SS and, therefore, penalty w ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d sum received above Rs. 20,000/- as per amendment brought in the statute w.e.f. 01.06.2015. Admittedly, the assessee has received the consideration towards the sale of properties in cash on the basis of two agreements with Shri Khalid Khan on 27.12.2011 and with Shri Shambhu Singh on 19.08.2014 i.e. both these agreements are entered prior to the date of amendment in section 269SS applicable from 01.06.2015, it is further submitted by Ld. AR that the penalty was only levied for cash received during the AY 2016-17, whereas the assessee and his wife has received the cash during the FY 2011-12 to 2016-17. The amendment is prospective in nature, therefore, the transactions or agreement entered into after 01.06.2015 only are covered by the amended provisions, whereas the agreement in the present case were entered much prior to the effective date of amendment, had it been prospective Ld. AO would have levied penalty for all the years. 10. It is the submission that since the transaction of cash are in accordance with the agreement entered into FY 2011-12 and FY 2014-15 i.e., prior to the date of amendment therefore, the amended provisions of section 269SS brought into w.e.f. 01.06.2015 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e, as under: 1.25 Your honour, it is also a settled law if reasonable cause exists then no penalty u/s 27 ID can be levied. The assessee relied in CIT vs. Manoj Lalwani (2003) 260 ITR 590 (Raj.) 1.26 Your honour, the assessee is not familiar as far as the complex Income Tax Laws are concerned. The assessee was not aware about the amended provisions u/s 269SS. No one informed the assessee about the change in the provisions of section 269SS. The assessee was under the bonafide belief that the acceptance of cash against the sale agreement is not illegal. It is a settled law that ignorance of law can be excused. The assessee relied in following judicial pronouncements - (i) CIT vs. SCHELL INTERNATIONAL (2005) 278 ITR 630 (Bombay) (ii) SUDERSHAN AUTO GENERAL FINANCE vs. CIT (1998) 60 TTJ 567 (Del) 1.27 Your honour, it is pertinent to mention that the Id. AO has levied penalty u/s 27ID in respect of payment of Rs. 21,000/- on 19008.2014 and Rs. 85,000/- on 16.05.2015, which was prior to amendment in section 269SS. Your honour, must appreciate that when the Assessing Officer does not know the law then how anyone' can expect that a salaried employed person sha ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ted the facts and arguments from the same are extracted as under: Your honour, in this ground, the assessee has raised that on the facts and circumstances of the case and in law, the Id. CIT(Appeal) erred in not appreciating the fact that on the same set of information the AO made addition u/s 69A of Rs. 7,51,000/- considering the same as unexplained income of the assessee. 2.1 Your honour, the Id. AO re-opened the assessment to assess the undisclosed capital gain income and completed the assessment accordingly. Thus, according to the Id. AO the money received against the sale agreement belongs to the assessee himself. 2.2 Your honour, it is clear that while levying the penalty the action of the Id. AO was not bona fide because the Id. AO knows the penalty cannot be levied on one's money u/s 271D of the Act. 2.3 Your honour, it is a settled law that one's income is treated as undisclosed income no penalty u/s 271D of the Act, can be levied. The assessee relied in following judicial pronouncement (i) CIT vs. R.P. SINGH CO. PVT. LTD. (2012) 340 ITR 217 (Del.) (ii) DIWAN ENTERPRISES vs. CIT (2000) 246 ITR 571 (Del.) In the light of above f ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... o say that the said question may arise where the facts would be different but the same has no relevance to the case at hand. In view of the aforesaid analysis, the appeal being devoid of merit stands dismissed without any order as to costs. (ii) DIWAN ENTERPRISES vs. CIT (2000) 246 ITR 571 (Del.) Section 269SS provides, inter alia, that no person shall, after June 30, 1984, take or accept from any other person, any loan or deposit otherwise by an account payee cheque or account payee bank draft, if the amount of such loan or deposit or the aggregate thereof is Rs. 20,000 or more. Section 271D provides that if a person takes or accepts any loan or deposit in contravention of the provisions of section 269SS, he shall be liable to pay, by way of penalty, a sum equal to the amount of the loan or deposit so taken or accepted. The record of the proceeding's shows that the Assessing Officer had discarded the theory of the assessee having taken any loan. He accepted the surrender of the amount as income of the assessee. It was open to the Assessing Officer not to accept the surrender, treat the amount as loan and then to hold the petitioner liable to penalty under sectio ..... X X X X Extracts X X X X X X X X Extracts X X X X
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