HANS RAJ,DELHI V. JCIT, RANGE 67, DELHI , NEW DELHI

ITA 3937/DEL/2023

AI Insights

The case involves Hans Raj, a bank employee, who transferred a residential property to his mother-in-law, Smt. Chander Kala, without any financial transaction at the time of transfer. The property transfer was recorded in a sale deed that erroneously stated cash was exchanged, which led to a penalty under Section 271D of the Income Tax Act for accepting cash as consideration for the property. The assessee contested the penalty, arguing that no cash was exchanged and that the sale deed's cash mention was a clerical error. The Tribunal, after considering the affidavits and the circumstances of the property transfer within the family, found the assessee's explanation credible and deleted the penalty.

• Counselvise Citation: [2025] 140 COUNSELVISE.COM (IT) 298831 (ITAT-DELHI)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 05-03-2025
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: SMC
• Assessment Year: 2017-2018
• Other Referred Cases: Collector Land Acquisition vs. Mst. Katiji & Ors. 167 ITR 471, Ram Nath Sao @ Ram Nath Sahu & Others vs Gobardhan Sao and Others
• Laws Referred To: Income Tax Act, 1961
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Department Lawyers: RAJESH TIWARI
• Assessee Lawyers: S SALIL KAPOOR; SHIVAM YADAV
• Keywords: Set aside
• Section: 22; 271D

Judgement Text

"आयकर अपीलीय अिधकरण िदʟी पीठ “एस एम सी”, िदʟी ŵी िवकास अव̾थी, Ɋाियक सद˟ IN THE INCOME TAX APPELLATE TRIBUNAL DELHI BENCH “SMC”, DELHI BEFORE SHRI VIKAS AWASTHY, JUDICIAL MEMBER आअसं. 3937/िदʟी/2023 (िन.व. 2017-18) ITA No.3937/DEL/2023 (A.Y.2017-18) Hans Raj, C A3/230, 3rd Floor, Sector-5, Rohini, Delhi 110085 PAN: AQUPR-4429-C ...... अपीलाथᱮ/Appellant बनाम Vs. Joint Commissioner of Income Tax, Range 67, CR Building, IP Estate, New Delhi 110002 ..... ᮧितवादी/Respondent अपीलाथŎ Ȫारा/ Appellant by : S/Shri Salil Kapoor, Shivam Yadav and Tarun Chanana, Advocates ŮितवादीȪारा/Respondent by : Shri Rajesh Tiwari, Sr. DR सुनवाई कᳱ ितिथ/ Date of hearing : 11/12/2024 घोषणा कᳱ ितिथ/ Date of pronouncement : : 05/03/2025 आदेश/ORDER PER VIKAS AWASTHY, JM: This appeal by the assessee is directed against the order of Commissioner of Income Tax (Appeals), National Faceless Appeal Centre, Delhi (hereinafter referred to as 'the CIT(A)') dated 31.10.2022, for assessment year 2017-18. 2. The appeal is time barred by 366 days. The assessee has filed an application supported by an affidavit citing reasons causing delay in filing of appeal. After perusal of the same, I am satisfied that delay in filing of appeal is not intentional, the delay has been caused for the reasons stated in petition which appears to be bonafide. 2 ITA No.3937/Del/2023 (AY 2017-18) 3. The Hon’ble Apex Court in an unequivocal manner has repeatedly held that acceptance of reason given by the appellant/petitioner explaining delay should be the rule and refusal an exception. By taking a pedantic and hyper technical view the explanation furnished should not be rejected, causing loss and irreparable injury to the party against whom the lis terminates. The expression “sufficient cause” should be liberally construed so as to sub-serve the ends of justice. 3.1 The Hon’ble Apex Court in the case of Collector Land Acquisition vs. Mst. Katiji & Ors. 167 ITR 471 has held that liberal approach should be adopted while dealing with an application praying for condonation of delay. Refusing to condone delay can result in meritorious matter being thrown out at the very threshold and cause of justice being defeated. Pedantic and hyper technical approach should not be adopted while dealing with an application for condonation of delay. 3.2 The Hon’ble Apex Court in the case of Ram Nath Sao @ Ram Nath Sahu & Others vs Gobardhan Sao and Others has held that the expression “sufficient cause” within the meaning of Section 5 of the Limitation Act or Order 22 Rule 9 of Civil Procedure Code or any other similar provision should receive a liberal construction so as to advance substantial justice. The courts should not proceed with the tendency of finding fault with cause shown and reject the petition by a slipshod order in over jubilation of disposal derive. Acceptance of explanation furnished should be the rule and refusal, an exception, more so when no negligence or inaction or want of bonafide can be imputed to the defaulting party. 3.3. Thus, in facts of the case and in light of aforesaid decisions, delay of 366 days in filing of appeal is condoned and appeal is admitted for decision on merits. 3 ITA No.3937/Del/2023 (AY 2017-18) 4. Shri Salil Kapoor, appearing on behalf of the assessee submits that the assessee is a bank employee. During the period relevant to assessment year under appeal, the assessee had transferred immovable property i.e. a residential house situated at 416, Pocket-B5, Sector 5, Rohini, Delhi to her mother-in-law Smt. Chander Kala, W/o. Late Shri Chetan Prakash. At the time of original purchase of house the entire purchase consideration was paid by father-in-law of the assessee i.e. Shri Chetan Prakash, except Rs.4.5 lakhs which was sourced by the assessee through loan from Punjab National Bank vide loan sanction letter dated 01.12.2005. Though, the loan amount was deducted from assessee’s salary account, however, in actual father-in-law of the assessee paid the loan installments. After settlement of loan account, in the year 2016, the assessee transferred the house in the name of Smt. Chander Kala, mother- in-law without any further financial transaction. Thus, no amount whatsoever was received by the assessee from Smt. Chander Kala at the time of execution of Sale Deed. However, while executing registered sale deed the consideration ‘Rs.24,21,000/- paid in cash’ was wrongly mentioned in the sale deed. He pointed that a perusal of sale deed would show that the amount has been mentioned in hand, whereas, the entire sale deed has been typed. He thus contended that since there was no exchange of cash, the penalty provisions u/s. 271D of the Income Tax Act,1961(hereinafter referred to as ‘the Act’) are not attracted. 5. Per contra, Shri Rajesh Tiwari representing the department submitted that the AO had issued notice of hearing to the assessee in penalty proceedings u/s. 271D of the Act. The assessee did not respond to the notices issued by the AO. Therefore, the AO on the basis of material available on record levied penalty u/s. 271D of the Act. Even before the CIT(A) the assessee had not furnished any explanation. Therefore, the CIT(A) upheld levy of penalty u/s. 271D of the Act. 4 ITA No.3937/Del/2023 (AY 2017-18) 6. Both sides heard, orders of the authorities below examined. From perusal of records it emanates that the assessee has failed to furnish any explanation before the Assessing Officer in penalty proceedings. Hence, the AO vide order dated 28.02.2022 in ex-parte proceeding levied penalty of Rs.24,21,000/- on account of accepting cash of an equal amount as consideration for sale of immovable property. The contention of the assessee is that the transfer of immovable property is within the family i.e. from the assessee to his mother-in-law. Though, there was no actual exchange of cash between the assessee and his mother-in-law, while executing sale deed it was inadvertently mentioned therein that, “Rs. 24,21,000/- paid cash in advance”. As per the assessee, consideration for purchase of house in 2005 was in fact paid by father- in-law of the assessee. The assessee had taken loan for part payment of consideration i.e. Rs.4.5 lakhs and that to, the assessee had taken loan from Punjab National Bank. In support of his contention the assessee has placed on record copy of loan letter dated 01.12.2005 from Punjab National Bank. The assessee has also furnished copy of affidavit of his mother-in-law Smt. Chander Kala, wherein, she has reiterated the explanation given by the assessee. The assessee has also furnished his own affidavit in support of his contention. Taking into consideration entire facts of the case, I find explanation furnished by the assessee as plausible one. Since, the sale deed was executed with in the family, a fair presumption can be drawn that there was no exchange of consideration at a time of execution of sale deed, as at the time of purchase of house in the year 2005 the purchase consideration was purportedly paid by father-in-law of the assessee. However, the property was transferred in the name of mother-in-law later, in 2016. Considering entire facts of the case, I accept the explanation furnished by the assessee and delete penalty levied u/s. 271D of the Act. 5 ITA No.3937/Del/2023 (AY 2017-18) 7. In the result, impugned order is set aside and appeal of the assessee is allowed. Order pronounced in the open court on Wednesday the 05th day March, 2025. Sd/- Sd/- (VIKAS AWASTHY) ᭠याियक सद᭭य/JUDICIAL MEMBER िदʟी/Delhi, ᳰदनांक/Dated 05.03.2025 NV/- ᮧितिलिप अᮕेिषतCopy of the Order forwarded to : 1. अपीलाथᱮ/The Appellant , 2. ᮧितवादी/ The Respondent. 3. The PCIT/CIT(A) 4. िवभागीय ᮧितिनिध, आय.अपी.अिध., िदʟी /DR, ITAT, िदʟी 5. गाडᭅ फाइल/Guard file. BY ORDER, //True Copy// (Dy./Asstt. Registrar) ITAT, DELHI "