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2023 (7) TMI 271 - AT - Income TaxLevy of penalty u/s 271D - cash transaction in connection with violation of section 269SS - Sale of residential flats to an agriculturist in cash - Scope of “reasonable cause” - HELD THAT:- As assessee sold immovable property to an agriculturist from a small village, wherein Banking facilities are not available. However the above cash sale consideration is very much reflected in the Registered Sale Deed as executed by the Purchaser. When the Purchaser was summoned u/s. 133(6) of the Act by the A.O. he was satisfied with the reply of the Purchaser and passed the assessment order accepting the Returned Income without making any additions. Thus, the grievance made out by the assessee is found to be genuine and reasonable cause. Levy of penalty under Section 271D in our considered opinion is unwarranted. Levy of penalty is discretionary and not automatic - A careful reading of Section 273B encompasses that certain penalties “shall” not be imposed in cases where “reasonable cause” is successfully pleaded. As in the case of Maa Khodiyar Construction [2014 (7) TMI 137 - GUJARAT HIGH COURT] held that no penalty is leviable u/s. 271D for cash loans exceeding Rs. 20,000/- from agriculturists living in remote areas when transaction were not doubted. Decided in favour of assessee.
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