GORLE APPALASWAMY,VISAKHAPATNAM V. INCOME TAX OFFICER, WARD-2(5), VISAKHAPATNAM

ITA 475/VIZ/2024

AI Insights

The case involves an appeal by Gorle Appalaswamy against the order of the Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi, which upheld a penalty of Rs. 14 lakhs for alleged violation of Section 269SS of the Income Tax Act, 1961. The penalty was imposed because the assessee accepted cash amounting to Rs. 14 lakhs during the sale of immovable property, which was claimed to be in violation of the Act. The assessee argued that the entire sale consideration was received at the time of registration before the Sub-Registrar, citing similar cases where it was held that Section 269SS does not apply to final payments at the time of registration. The Tribunal agreed with the assessee, referencing decisions in Katasani Thirupal Reddy vs. ITO and ITO vs. Shri R. Dhinagharan (HUF), which supported the view that Section 269SS does not cover the final payment at the time of registration of the sale deed.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 35835 (ITAT-VISAKHAPATNAM)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 09-01-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB
• Assessment Year: 2017-2018
• Other Referred Cases: Katasani Thirupal Reddy vs. ITO, ITO vs. Shri R. Dhinagharan (HUF)
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: APARNA VILLURI
• Assessee Lawyers: G.V.N.HARI
• Section: 271D

Judgement Text

"आयकर अपीलȣय अͬधकरण, ͪवशाखापटणम पीठ मɅ IN THE INCOME TAX APPELLATE TRIBUNAL VISAKHAPATNAM BENCH, VISAKHAPATNAM BEFORE SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER & SHRI S. BALAKRISHNAN, ACCOUNTANT MEMBER आ.अपी.सं / ITA No. 475/Viz/2024 (Ǔनधा[रण वष[ / Assessment Year: 2017-18) Gorle Appalaswamy, Visakhapatnam. [PAN : ADCPG5048F] Vs. Income Tax Officer, Ward-2(5), Visakhapatnam. अपीलाथȸ / Appellant Ĥ× यथȸ / Respondent Ǔनधा[ǐरती ɮवारा/Assessee by: Shri G.V.N. Hari, AR राजè व ɮवारा/Revenue by: Dr. Aparna Villuri, Sr. AR सुनवाई कȧ तारȣख/Date of hearing: 09/01/2025 घोषणा कȧ तारȣख/Pronouncement on: 09 /01/2025 आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 27/09/2024 passed by the learned Commissioner of Income Tax (Appeals), NaƟonal Faceless Appeal Centre, Delhi (“Ld. CIT(A)”), in the case of Appalaswamy Gorle (“the assessee”), assessee preferred this appeal. 2. Brief facts are that in this case a penalty of Rs. 14 lakhs was levied U/s. 271D of the Income Tax Act, 1961 (“the Act”) on the ground that the ITA No. 475/Viz/2024 Page 2 of 3 assessee accepted cash amounƟng to Rs. 14 lakhs during the sale of immovable property, in violaƟon of the provisions of secƟon 269SS of the Act. 3. Assessee pleaded before the First Appellate Authority that the enƟre sale consideraƟon was received at the Ɵme of registraƟon of the document itself before the Sub-Registrar, since the seller insisted for cash payments. Assessee placed reliance on the view taken by the Coordinate Bench of the Tribunal in the case of Katasani Thirupal Reddy vs. ITO in ITA No.372/Hyd/2023 (AY 2016-17), dated 05/07/2024 and pleaded that secƟon 269SS of the Act is not violated and therefore, secƟon 271D of the Act cannot be invoked. Ld. CIT(A), however, referred to secƟon 269SS of the Act and held that the assessee received the cash in violaƟon of the provisions of secƟon 269SS of the Act and thereby penalty is jusƟfiable. Hence this appeal by the assessee. 4. Learned Authorized RepresentaƟve (“learned AR”) submiƩed that secƟon 269SS of the Act has no applicaƟon to the facts of this case inasmuch as the specified sum as defined in secƟon 269SS of the Act and in view of the consistent view taken by various Benches of the Tribunal, it does not include sale consideraƟon or the final payment at the Ɵme of registraƟon of the sale deed, therefore, it refers only to the sums received as advance or otherwise. He placed reliance on the view taken by the Coordinate Bench of the Tribunal in the case of ITO vs. Shri R. Dhinagharan (HUF), ITA No. 3329/Chny/2019, dated 28/12/2023, and Katasani Thirupal Reddy (supra) 5. Learned Departmental RepresentaƟve (“learned DR”) vehemently relied on the orders of the AuthoriƟes below. 6. Issue involved in this appeal is no longer res integra and is clearly covered by the view taken by the Tribunal in the cases of R. Dhinagharan (supra) and Katasani Thirupal Reddy (supra). In the present case, the total sale consideraƟon is Rs. 14 lakhs and the sale deed clearly shows that the enƟre sale consideraƟon was paid before the RegistraƟon AuthoriƟes. ITA No. 475/Viz/2024 Page 3 of 3 Following the view taken by this Bench (supra), we hold that there is no violaƟon of secƟon 269SS of the Act and consequently, no penalty could be levied U/s. 271D of the Act. Therefore, we direct the Assessing Officer to delete the penalty. 7. In the result, appeal filed by the assessee is allowed. Order pronounced in the open court on the 09th January, 2024. Sd/- Sd/- (S. BALAKRISHNAN) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated:09/01/2025 OKK/sps Copy forwarded to: 1. Gorle Appalaswamy, D.No. 18-135, Chandra Nagar, Gopalapatnam, Visakhapatnam, Andhra Pradesh-530027. 2. Income Tax Officer, Ward-2(5), O/o. ITO, Infinity Towers, Sankaramatam Road, Visakhapatnam, Andhra Pradesh-530016. 3. Pr. CIT, 4. DR, ITAT, Visakhapatnam. 5. GUARD FILE. आदेशानुसार / BY ORDER Sr. Private Secretary ITAT, Visakhapatnam "