TMI Blog2024 (1) TMI 61X X X X Extracts X X X X X X X X Extracts X X X X ..... r 2017-18 with a view to cover all situations of cash transaction Rs. 2 Lakhs or over other than the situation captured in Section 269SS of the Act. This provision has been explained with more clarity by the CBDT Circular No.19 of 2015, dated 27.11.2015 Memorandum explaining the intention of amendment by Finance Bill, 2015 including the definition of sum specified brought in the Explanation to Section 269SS of the Act, it is clear that the intention for brining this provision was to curb the generation of black money in real estate prohibiting acceptance or repayment of advance in cash of Rs. 20,000/- or more for any transaction in immovable property. This was explained by Hon ble Finance Minister while placing the Finance Bill, 2015 in her budget speech highlighting the intention of the amendment that the amendment in Explanation to Section 269SS i.e., sum specified means only applicable for advance receivable, whether as advance or otherwise means advance can be in any manner. Hence, this provision will not apply to the transaction that happens at the time of final payment at the time of registration of sale deed and payment is made before sub-registrar at the time o ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... corded by the A.O raised by the assessee under Rule 27 of the Rules for the reason that the Tribunal Rules are very clear on this issue and the issue can be raised only when the CIT(A) has allowed the relief and assessee want to support the order of CIT(A) on any other ground which is decided against him. The Ld. CIT-DR drew our attention to Rule 27 of the Rules, which reads as under: Respondent may support order on grounds decided against him. 27. The respondent, though he may not have appealed, may support the order appealed against on any of the grounds decided against him. 4. We have gone through Rule 27 of the Rules and noted that in supporting the decision of the first appellate authority, the respondent may no doubt support it on any ground other than the one on which the first appellate authority had come to this conclusions, but such a ground must arise on the record of the assessment proceedings and must have been raised on his behalf at some stage of the proceedings and the facts in respect thereof had been on the record. No new ground can be raised for the first time before the Tribunal by the respondent. 5. In view of the above and the fact that the as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... atter to the JCIT for levy of penalty u/s. 271D of the Act for violation of the provisions of Section 269SS of the Act and the JCIT, Kanchipuram Range, Kanchipuram levied penalty u/s. 271D of the Act vide order dated 12.06.2019 for an equivalent amount of cash received of sales transaction for a total consideration of Rs. 3,03,46,301/-. Aggrieved, the assessee preferred appeal before CIT(A). 8. The CIT(A) after going through the facts of the case and familiar circumstances, deleted the penalty by observing in para 5 as under: 5.1 The only grievance of the appellant is the levy of penalty under section 271D imposed by the JCIT, Kancheepuram Range 7, vide order dated 12.06.2019 of sum of Rs. 3,03,46,301/-. The JCIT in his order has stated that in the appellant s case sale consideration of immovable property in the form of plots of land was received in cash in excess of Rs. 20,000/- thereby contravening the provisions of section 269SS of the IT Act. The JCIT also mentioned that in the Finance Act, 2015 the scope of section 269SS was extended to include cash receipts in immovable property transactions. He also held that the appellant fulfilled none of the exceptions provided in ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... d in 277 ITR 420 (2005) where this judicial premise has been pronounced. The gist of the High Court decision is mentioned in the 4para on Page 5 of this order where bona fide belief and genuineness of the transactions form the bed rock of reasonable cause u/s 273B of the Act. It may also be noted that the persons, who have invested in the lands, are people of meagre means, who are living in a small villages in Kancheepuram district. Appellant submitted the list of such persons and it is noted that the payments are ranging between Rs. 2,97,000/- to Rs. 6,04,800/-. I have gone through the list submitted, comprising 82 persons, the plot number, area, and amounts against each name. The sums invested by the persons involved are not very large amounts. Hence looking into the entire background of the facts of this case the reasonable cause propounded section 273 B of the Income Tax Act is found to be applicable to the appellant. It is also important to mention that there is no loss to the revenue since appellant has disclosed the entire sales amount in the return of income. The appellant has relied upon the following case laws. Aggrieved, the Revenue is in appeal before the Tribu ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt in the return of income. 9.1 The Ld. CIT-DR stated that the decision taken by the CIT(A) is not acceptable for the following reasons: (i) From plain reading of Sec.269SS, penalty is imposable for violation of Sec.269SS either for accepting cash over Rs. 20,000/- in the form of loan or deposit or for receiving cash in excess of Rs. 20,000/- in respect of sale of immovable property(ies.). The only exemption given vis-a-vis this penal provision is in terms of proviso 2 to Sec.269SS. The said proviso takes transaction involving loan or deposit or specified sum between persons having agricultural income outside the ambit of this penalty. The case under dispute does not fall under these categories. (ii) The CIT(A) has mentioned about no loss of revenue as a ground for his decision. However, loss of revenue can never be a ground for consideration of this penalty u/s. 271D. 9.2 The Ld. CIT-DR stated that the reliance of the following case laws by the CIT(A) are also appear to be misplaced. (i) In the case of CIT Vs Saini Medical Store, the Hon'ble Punjab- Haryana High Court considered the genuineness of the transaction while giving verdict in favour of the asses ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... not liable to act in the manner prescribed by the statute . It may be mentioned that the quasi-criminal angle is not present in Sec.271D of the Act. In fact, Sec.271DD providing for imprisonment for a maximum of two years for violation of provisions of Sec.269SS has been omitted w.e.f.1.4.1989. Therefore, this ruling of the Hon'ble Supreme Court in the context of a different taxing statute, which is not a central act, is not applicable in the current case. (iii) In the case of Coastal Tea Pvt. Ltd., the Hon'ble ITAT, Vishakhapatnam has given a ruling in favour of the assessee in specific facts of the case while the transaction was between sister concern of Directors closely related to the assessee, apart from the fact that the transaction was genuine. The closeness of relation between the parties has not been related in this case and is ostensively not present in this case of transaction between seller and purchaser. Therefore, this case law is not applicable in this current case. (iv) On the other hand, reliance can be made on the jurisdictional decision of High Court of Madras in Vasan Healthcare Ltd. cited in 411 ITR 499. SLP against the said ruling has be ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... f documents for verification which was not denied i.e., neither by the A.O nor by CIT(A) and even now by Ld. CIT-DR. 11. In reply, the Ld. CIT-DR stated that the whole consideration was received in cash at the time of registration of sale deed, that this also is hit by the provisions of Section 269SS of the Act in relation to acceptance of specified transaction of specified sum of money i.e., whether as advance or otherwise, which means even the sale consideration received at the time of registration of sale deed is hit by this provision and hence, the CIT(A) should not have deleted the penalty. He requested that the order of JCIT may be affirmed. 12. We have heard the rival contentions, and gone through the facts and circumstances of the case. We find that the Revenue has challenged the correctness of the decision rendered by the CIT(A) vide order dated 30.09.2019 in deleting the penalty levied u/s 271D of the Act vide penalty order dated 12.06.2019. The CIT(A) had deleted the penalty on two counts namely on the non-applicability of the provisions of Section 269SS of the Act to the facts of the present case and on the ground of reasonable cause within the scope of Section ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ther as advance or otherwise, in relation to transfer of an immovable property 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. It is also proposed to amend section 269T of the Income-tax Act so as 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 an advance, by whatever name called, in relation to transfer of an immovable property whether or not the transfer takes place. It is further proposed to make 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. These amendments will take effect from 1st day of June, 2015. The Notes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... explained with more clarity by the CBDT Circular No.19 of 2015, dated 27.11.2015 and the relevant circular reads as under:- Departmental Circular No.19 of 2015, dated 27-11-2015:- 54. Mode of taking or accepting certain loans, deposits and specified sums and mode of repayment of loans or deposits and specified advances. 54.1 Provisions contained in section 269SS of the Income-tax Act, before amendment by the Act, provided 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 were provided in the section. 54.2 Similarly, the provisions contained in section 269T of the Incometax Act, before amendment by the Act, provided 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. 54.3 In order to curb generation of black money by way of de ..... X X X X Extracts X X X X X X X X Extracts X X X X
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