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TMI Blog2025 (1) TMI 236X X X X Extracts X X X X X X X X Extracts X X X X ..... proceedings. AO has also accepted the returned income while passing order u/s 143(3) of the Act. In view of the aforesaid reasoning and judicial pronouncements cited, we hold that the fact of the instant case penalty u/s 271D of the Act is not warranted and accordingly, we delete the same - Decided in favour of assessee. - Shri Waseem Ahmed, Accountant Member And Shri Keshav Dubey, Judicial Member For the Appellant : Sri Ravishankar, A.R. For the Respondent : Shri V. Parithivel, D.R. ORDER PER KESHAV DUBEY, JUDICIAL MEMBER: This appeal at the instance of the assessee is directed against the order of ld. CIT(A)/NFAC dated 31.1.2024 vide DIN Order No.ITBA/NFAC/S/250/2023-24/1060316528(1) for the assessment year 2017-18. The assessee has raised following grounds of appeal: 1. The order passed by the authorities below insofar as it is against the Appellant, is opposed to law, weight of evidence, natural justice and probabilities on the facts and circumstances of the Appellant's case. for the 2. The Appellant denies himself liable to penalty of Rs. 14,64,000/- assessment year 2017-18, on the facts and circumstances of the case. 3. The levy of penalty under section 269SS of the Act ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... stantial cause of justice. Reliance is placed on the decision of Hon ble Apex Court in the case of National Thermal Power Company Ltd. Vs. CIT reported in 229 ITR 383 and also on the ratio of the decision of Hon ble Karnataka High Court in the case of Gundathur Thimmappa and Sons reported in 70 ITR 70. 4. Ld. D.R. on the other hand, opposed the additional grounds taken by the assessee at this stage. 5. We have heard both the parties on admission of additional grounds. In our opinion, all the facts are already on record and there is no necessity of investigation of any fresh facts for the purpose of the adjudication of above grounds. Further, we also find that the grounds are purely question of law and accordingly by placing reliance on the judgement of Hon ble Supreme Court in the case of NTPC Vs. CIT cited (supra), we inclined to admit the additional grounds for the purpose of adjudication as there is no investigation of any fresh facts otherwise on record and the action of the assessee is Bonafide. 6. Brief facts of the case are that assessment order was passed u/s 143(3) of the Act in the case of assessee on 30.4.2019. The AO after carefully examining the details furnished by th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ok comprising 22 pages enclosing therein copy of notice u/s 271D of the Act dated 30.6.2022, notification 803814(E) dated 17.9.2021 and 3 numbers case laws relied upon by the assessee. Before us, ld. A.R. of the assessee submitted that the order passed u/s 271D of the Act is barred by limitation and deserve to be quashed. Further, ld. A.R. of the assessee submitted that show cause notice dated 30.6.2022 does not specify the limb for which penalty u/s 271D of the Act is initiated and also there is no satisfaction recorded in the assessment order for which the penalty proceedings u/s 271D of the Act was initiated. Further, ld. A.R. of the assessee submitted that the assessee along with others has sold an ancestral property (agricultural property) for a total consideration of Rs. 29,28,000/- in cash to an agriculturist(s) who are relatives (blood related) of the assessee. The assessee s share out of total sale consideration of Rs. 29,28,000/- is amounting to Rs. 14,64,000/- and he has received his share of sale consideration in cash on a honest and Bonafide belief that sale proceeds received in cash from sale of agricultural land is not covered u/s 269SS of the Act. Further, the ld. A ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... eeds received from sale of such agricultural lands is also not covered u/s 269SS of the Act. We are of the considered opinion that assessee has received cash amounting to Rs. 14,64,000/- towards the sale consideration for transfer of his agricultural land. In the instant case, the sale of property and consequent receipt of sale consideration in cash are not disputed by the either side. The assessee had only sold an ancestral property on a honest and Bonafide belief that same are not covered under the provisions of the section 269SS of the Act accepted the sale consideration in cash. On identical set of facts, the coordinate bench of ITAT, Bangalore in the case of Smt. Pushpalatha Vs. ITO reported in (2024) 165 taxmann.com 767 has held that where the assessee sold a property and received cash exceeding Rs. 20,000/- as part of sale consideration having no knowledge of tax law there was reasonable cause as mandated u/s 273B of the Act for failure to comply with section 269SS of the Act. Hon ble ITAT therefore, held that the penalty u/s 271D of the Act was not warranted and hence deleted. The relevant paragraph of the Hon ble ITAT is reproduced below for ease of reference and record: 9 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ter giving our careful consideration that in case the appellant's' argument is accepted by giving wider interpretation to the word otherwise , it would thwart the very object of the Act.... The word otherwise has to be read as ejusdem generis, that is to say, in group similar to death, resignation, long leave vacancy, invalidation, person not joining after being duly selected.... Hence the word otherwise cannot be given the wide and liberal interpretation which would exclude a large number of expected applicants who could be waiting to apply for the vacancies occurring in the succeeding year in question. 11. Further, the Hyderabad Bench of the Tribunal in the case of Suman Savings and Investments Pvt. Ltd., reported in (1987) 23 ITD 345 (Hyd.), had accepted the Department s contention that the principle of Ejusdem Generis should be applied to the term otherwise in section 40A(8)(c)(iv) of the Act and that it should be interpreted within the context in which it is used. The relevant finding of the Hyderabad Bench of the Tribunal reads as follows: 9. We are not persuaded by the contention of Sri Parthasarathy that the term 'otherwise' occurring in sub-cl. (iv) of cl. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 015 to include the specified sum within its ambit and the said term was defined in Explanation to the said Section which is reproduced as under: A 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. The Budget Speech of the Hon'ble Finance Minister while placing the Finance Bill, 2015 highlighting the intention of the amendment relevant for decision making in the present appeal is captured below: 3. A. Measures to curb black money 3.1 With a view to curbing the generation of black money in real estate, it is proposed to amend the provisions of section 269SS and 269T of the Income-tax Act so as to prohibit acceptance or repayment of advance in cash of Rs. 20,000 or more for any transaction in immovable property. It is also proposed to provide a penalty of an equal amount in case of contravention of such provisions. The Memorandum forming part of Finance Bill, 201.5 highlighting the intention of the amendment is captured below: B. MEASURES TO CURB BLACK MONEY Mode of taking or accepting certain loans, deposits and specified sums and mode of repayment of loans o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 269SS of the Income-tax Act relating to mode of taking or accepting certain loans and deposits. The existing provision contained in section 269SS provides that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account if the amount of such loan or deposit is twenty thousand rupees or more. It is proposed to substitute the said section so as to provide that no person shall take from any person, any loan or deposit or specified sum, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account if the amount of such loan or deposit or specified sum is twenty thousand rupees or more. It is also proposed to define specified sum as any sum of money receivable, whether as advance or otherwise in relation to transfer of an immovable property whether or not the transfer materialises. These amendments will take effect from 1st June, 2015. 12.1 In the present case, the sale consideration was received in cash at the time of execution of multiple sale deeds from different persons for the sale of plots and accepted as genuine in the ass ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... advance or otherwise, in relation to transfer of an immovable property(specified sum) otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount of such loan or deposit or such specified sum is twenty thousand rupees or more. 54.4 Section 269T of the Income-tax Act has also been amended to provide that no person shall repay any loan or deposit made with it or any specified advance received by it, otherwise than by an account payee cheque or account payee bank draft or by electronic clearing system through a bank account, if the amount or aggregate amount of loans or deposits or specified advances is twenty thousand rupees or more. The specified advance shall mean any sum of money in the nature of anadvance, by whatever name called, in relation to transfer of an immovable property whether or not the transfer takes place. 54.5 Consequential amendments in section 271D and section 271E, to provide penalty for failure to comply with the amended provisions of section 269SS and 269T, respectively, have also been made. 54.6 Applicability: These amendments have taken effect from 1st day of June, 2015. From th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sits and specified sums and mode of repayment of loans or deposits and specified advances The existing provisions contained in section 269SS of the Income-tax Act provide that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, if the amount of such loan or deposit is twenty thousand rupees or more. However, certain exceptions have been provided in the section. Similarly, the existing provisions contained in section 269T of the Income-tax Act provide that any loan or deposit shall not be repaid, otherwise than by an account payee cheque or account payee bank draft or online transfer through a bank account, by the persons specified in the section if the amount of loan or deposit is twenty thousand rupees or more. In order to curb generation of black money by way of dealings in cash in immovable property transactions it is proposed to amend section 269SS, of the Income-tax Act so as to provide that no person shall accept from any person any loan or deposit or any sum of money, whether as advance or otherwise, in relation to transfer of an immovable property otherwise ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... sfer of immovable property would not have come to the knowledge of the assessee who is a woman having elementary education and no knowledge of tax laws. She would have not been under a belief that there was contravention of any provision of the Act. On identical facts, the following judicial pronouncements had held that there is reasonable cause as mandated under section 273B of the Act : a. Smt. Vijapurapu Sudha Rao reported in [2023] 157 taxmann.com 669 (Visakhapatnam - Trib.) b. Smt. Anuradha Chivukula Challa in IT(IT)A No.585/Bang/ 2022 : Asst.Year 2017-2018 dt. 14.09.2022 c. Sri Padmanabha Mangalore Chowta in ITA No.1147/Bang/2022 dt. 07.03.2023 d. Narendrakumar Chunilal Soni ITA No. 195/A11d/2022 dt. 17.05.2023 e. Kanchumarthi Venkata Sita Ramachandra Rao, Rajahmundry reported in 2022 (9) TMI 53 - ITAT VISAKHAPATNAM 16. In view of the aforesaid reasoning and judicial pronouncements cited, we hold that on the facts of the instant case, penalty under section 271D of the Act, is not warranted and we delete the same. It is ordered accordingly. 8.1 Respectfully following the above decision of this coordinate bench in the present case also, there was no intention whatsoever to gene ..... X X X X Extracts X X X X X X X X Extracts X X X X
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