The Chennai ITAT said that receipt of sale consideration of a massive amount of Rs. 1.60 Crores in cash, which is, in breach of the provisions of section 269SS (this section restricts cash receipts over & above twenty thousand) of the Income-tax Act, rightly merits the imposition of penalty under section 271D.
The Bench of V. Durga Rao (Judicial Member) & Manjunatha, G. (Accountant Member) noted that “The contention of the assessee is not acceptable by any Court of Law, claiming to have wrong entry has been made in a document, which was duly signed by both the vendor and purchaser and registered by the Sub-Registrar of the State Revenue Department in the absence of any material evidence”. (Para 6)
According to the matter, at the time of verification conducted by the DIT(I&CI), Chennai, it was encountered that the taxpayer had sold an immovable property of SRO Virugambakkam, and part of the sale consideration of Rs. 1.60 Crores was obtained in cash. On receipt of the same data, the AO issued a notice u/s 274 r.w.s. 271D.
However, the taxpayer appeared before the AO, but did not provide any reasonable cause for accepting the sale consideration of the immovable property by cash, the AO imposed a penalty under section 271D for accepting the sale consideration of immovable property otherwise through the way of an account payee cheque or account payee bank draft without reasonable cause and disobeying the provisions of section 269SS.
The Bench directed to the registered deed of sale, to discover that the taxpayer has obtained part of sale consideration of Rs. 1.60 Crores in cash.
Taxpayer contention, the consideration clause of the act of sale had incorrectly entered the transaction in the mode of cash while in reality, it was an adjustment of an existing debt through a journal entry, Bench said.
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The Bench, the taxpayer must have approached the Appellate Authority of the Tamil Nadu State Revenue Department for any modification/addition/deletion, etc., which was not accomplished in the same case.
Under section 271D of the Income-tax Act, the ITAT concluded that the penalty was correctly imposed.
| Case Title | Nammalvar Lingusamy Vs. The Additional Commissioner of Income Tax |
| Appeal Number | I.T.A. No.532/Chny/2022 |
| Date | 07.02.2024 |
| Appellant by | Shri J.K. Reddy, CA |
| Respondent by | Shri AR V Sreenivasan, Addl. CIT |
| Chennai ITAT | Read Order |
