TMI Blog2023 (4) TMI 892X X X X Extracts X X X X X X X X Extracts X X X X ..... efore, provisions of section 269SS, if any, has been violated in the assessment year 2016-17 and not in A.Y 2017-8. Therefore, the very initiation of penalty proceedings u/s 271D for the A.Y 2017-18 is void abinitio and therefore, the order of the CIT (A) NFAC confirming the penalty u/s 271D of the Act has no legs to stand. We, therefore, set aside the order of the CIT (A) NFAC and direct the Assessing Officer to cancel the penalty. The grounds raised by the assessee are accordingly allowed. - ITA No.523/Hyd/2022 - - - Dated:- 19-4-2023 - Shri R.K. Panda, Accountant Member And Shri Laliet Kumar, Judicial Member For the Assessee : Advocate Smt. S. Sandhya For the Revenue : Shri KPRR Murthy, CIT(DR) ORDER PER R.K. PAN ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... er CASS for examination of cash deposited during the demonetization period . Accordingly statutory notices u/s 143(2) and 142(1) were issued to the assessee. 4. During the course of assessment proceedings, the assessee explained that the cash deposit of Rs.10,48,000/- on 7.12.2016 in the Bank A/c maintained with SBI Gandhinagar, Musheerabad was out of the sale proceeds of property on 20.01.2016 vide registered sale deed No.416/2016 dated 20.01.2016 for Rs.10,48,000/- and the entire consideration was received in cash as per sale deed. The assessee stated that the cash was kept with him with an intention to invest in another property and in the meantime he left India on 8.6.2016 and returned back on 5.12.2016. On 7.12.2016, the assessee d ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... dated 24th Aug 2021. The penalty was levied U/S 271D at Rs 10,48,000/- . While levying the penalty the AO had not considered the genuine belief of the appellant who believed that once capital gains was offered to tax, it would be a sufficient compliance of all the legal requirements. Attention is drawn to the judgement of the Honorable High Court of Gauhati in the case of CIT Vs Bhagwati Prasad Bajoria (HUF)' [2003] [133 Taxman 426] where it was held that where the transaction got duly concluded that the reflected in the books, it could not be assessee had entered into a defraud transaction to avoid payment of tax or to revenue. Hence, penalty U/S 271D cannot be levied. In the instant case also, the was transaction under of ca ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... 21.01.2022 for the A.Y.2017- 18, the A.0, NFAC has mentioned that the appellant has not responded to the two penalty show cause notices issued and after considering the facts on record has levied the penalty. 5.3.2. Admittedly, as may be seen from the copy of sale deed dated 20.01.2016, the appellant has not received the sale consideration of Rs.10,48,000/- in account payee cheque or Demand draft or use of ECS through a bank account; The appellant has received the same in cash. 5. 3. 3. The appellant, a retired officer of NMDC, despite working in a quasi-Government undertaking for long years has not received the sale consideration of Rs.10,48,000/- in account payee cheque or Demand draft or use of ECS through a bank account. Admit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... llowing authorities : (i) 245 ITR 661(Karn)-Chamundi Granites Pvt Ltd- While affirming the Hon.Karnataka High Court order, the Hon.Apex Court(255 ITR 258,266- SC) ruled that sec.269. which prescribes the mode of taking or accepting certain loans or deposits, is not discriminatory and is not violative of article 14 of the constitution; nor was it enacted by Parliament without legislative competence. It cannot be said that sec.269 SS deals with, a subject which is outside the scope of the Income Tax Act or that relates to a topic not within the competence of Parliament. It cannot be said - that sec:269 Ss or Sec.271 D or the earlier,section276DD is unconstitutional on the ground that it was draconian or expropriator in nature. (ii) ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng to the copy of the penalty notice, she submitted that the Assessing Officer has initiated penalty proceedings u/s 271D of the Act for the A.Y 2017-18 and therefore, in absence of any violation of provisions of section 269SS by the assessee for the A.Y 2017-18, the penalty notice issued by the Assessing Officer itself is void abinitio and the order of the CIT (A) NFAC upholding the order is devoid of any merit. Referring to the decision of the Hon'ble Supreme Court in the case of Hindustan Steel Ltd vs. State of Orissa (1972) 183 ITR 26 (S.C), she submitted that levy of penalty is not automatic. Relying on various other decisions, she submitted that penalty levied by the Assessing Officer and upheld by the CIT (A) NFAC being not in co ..... X X X X Extracts X X X X X X X X Extracts X X X X
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