Katasani Thirupal Reddy, Andhra Pradesh V. Income Tax Officer, Ward-1, Nandyal., Nandyal

ITA 372/Hyd/2023

• Counselvise Citation: [2024] 101 COUNSELVISE.COM (IT) 6013 (ITAT-HYDERABAD)
• Duration Of Justice: 11 month(s) 7 day(s)
• Appeal Type: Income Tax Appeal
• Pronouncement Date: 04-07-2024
• Appeal Filed By: Assessee
• Order Result: Allowed
• Bench Allotted: DB-A
• Next Hearing Date: 05-06-2024
• Assessment Year: 2016-2017
• Appeal Filed On: 27-07-2023
• Result in Favour of: Assessee
• Court: TRIBUNAL
• Section: 271D

Judgement Text

आयकर अपीलीय अिधकरण, हैदराबाद पीठ मŐ IN THE INCOME TAX APPELLATE TRIBUNAL HYDERABAD BENCHES “A”, HYDERABAD BEFORE SHRI MANJUNATHA G., ACCOUNTANT MEMBER & SHRI K.NARASIMHA CHARY, JUDICIAL MEMBER आ.अपी.सं / ITA No. 372/Hyd/2023 (िनधाŊरण वषŊ / Assessment Year: 2016-17) Katasani Thirupal Reddy, OWK Mandal, AP [PAN : ADQPT9229D] Vs. Income Tax Officer Ward -1 Nandyal अपीलाथŎ / Appellant Ů̝ यथŎ / Respondent िनधाŊįरती Ȫारा/Assessee by: Shri K.A. Sai Prasad, CA राज̾ व Ȫारा/Revenue by: Shri Shakeer Ahamed, DR सुनवाई की तारीख/Date of hearing: 06/06/2024 घोषणा की तारीख/Pronouncement on: 05/07/2024 आदेश / ORDER PER K. NARASIMHA CHARY, J.M: Aggrieved by the order dated 16/03/2022 passed by the learned Commissioner of Income Tax (Appeals)-NaƟonal Faceless Appeal Centre (NFAC), Delhi (“Ld. CIT(A)”), in the case of Katasany Thirupal Reddy (“the assessee”) for the assessment year 2016-17, the assessee preferred this appeal. 2. Brief facts of the case are that the assessee is an individual. During the year under consideraƟon the assessee sold a property for a consideraƟon of Rs.21,42,000/- vide registered sale deed dated ITA No. 488/Hyd/2023 Page 2 of 5 03/07/2015, and received the enƟre sale consideraƟon in cash. Hence the learned Assessing Officer passed an order dated 16/03/2022 under secƟon 271D of the Income Tax Act, 1961 (‘the Act’) by levying penalty of Rs.21,42,000/-. 3. Aggrieved, assessee preferred appeal before the learned CIT(A), and pleaded that the cash was received from the purchaser on the day of registraƟon and before the Jt. Sub Registrar only, due to pressing medical need of his mother. Learned CIT(A), however, did not accept the contenƟon of the assessee, staƟng that it is only an aŌerthought and self-serving. Learned CIT(A) accordingly dismissed the appeal of the assessee vide order dated 01/06/2023, holding that violaƟon of the provisions under secƟon 269SS of the Act shall follow and confirmed the penalty. 4. Aggrieved by the order of learned CIT(A), the assessee is now in appeal before us. Learned AR submiƩed that the amendment brought out under the provisions of secƟon 269SS of the Act w.e.f. 01/06/2015 which includes the ‘specified sum’, and the definiƟon of ‘specified sum’ as given in ExplanaƟon to SecƟon 269SS of the Act shows that it means any sum of money receivable, whether as advance or otherwise, in relaƟon to transfer of immovable property, whether or not the transfer takes place; whereas the sale transacƟon in this case took place on 3/7/2015, within a short Ɵme aŌer the amended law coming into force, and not knowing the same. he further submiƩed that that the amendment brought out under the provisions of secƟon 269SS of the Act w.e.f. 01/06/2015 is applicable for advance given at the Ɵme of entering into agreement for purchase/sale of property and not for actually registraƟon done and sale consideraƟon received at Ɵme of registraƟon of sale deed for purchase/sale of property. Learned AR also submiƩed that a provision was also brought in by the legislature in the statute vide Finance Act, 2017 w.e.f. 01/04/2017 by introducing the provision of secƟon 269ST of the Act, wherein even the purchase of property, if the amount is two lakhs or more will be covered and penalty will be levied of an equivalent to the amount under secƟon ITA No. 488/Hyd/2023 Page 3 of 5 271DA of the Act, which was also simultaneously introduced by the Finance Act, 2017 w.e.f. 01/04/2017. Hence, according to learned AR, this provision of ‘specified sum’ introduced w.e.f. 01/06/2015 does not hit the assessee's transacƟon, because on facts, the assessee has not received the amount of cash of Rs. 9,38,000/- as advance, but he received the same in front of the sub-registrar at the Ɵme of registraƟon for sale of property. For this, he produced a copy of the registered sale deed for verificaƟon, which was not denied by the Learned assessing officer. 5. Per contra, learned DR placed heavy reliance on the orders of the authoriƟes below and submiƩed that the sale consideraƟon received in cash at the Ɵme of registraƟon of sale deed, also hit by the provisions of SecƟon 269SS of the Act in relaƟon to acceptance of specified transacƟon of ‘specified sum’ of money i.e., whether as advance or otherwise, which means even the sale consideraƟon received at the Ɵme of registraƟon of sale deed is hit by this provision. Learned DR, however, does not dispute the contention of the assessee that the cash was paid and received in the presence of the Sub-Registrar. He requested that the order of the learned CIT(A) may be affirmed. 6. We have gone through the record in the light of the submissions made on either side. Case of the assessee is that in the transacƟon in quesƟon he received the sale consideraƟon of Rs. 21.42 Lacs in cash in view of the pressing need of health care of his mother and since the amendment has come into force only a month earlier, he was not properly advised as to the bar of receiving cash under the amendment act. AdmiƩedly the sale took place on 3/7/2015 whereas the amendment in quesƟon has come into force w.e.f. 1/6/2015. Assessee suffered loss in this transacƟon and such a posiƟon is not disputed by the Department. In the circumstances, the assessee not receiving proper advice as to the non-desirability of receiving the sale consideraƟon in cash and his explanaƟon cannot be brushed aside. ITA No. 488/Hyd/2023 Page 4 of 5 7. Apart from this, the relevant word “specified sum” has been defined under explanaƟon (iv) to secƟon 269SS, which is reproduced as under : “(iv) “specified sum” means any sum of money receivable, whether as advance or otherwise, in relaƟon to transfer of an immovable property, whether or not the transfer takes place.” 8. The meaning of the “specified sum” has also been dealt with by a Co-ordinate Bench of the Tribunal in the case of ITO vs. Shri. R. Dhinagharan (HUF), ITA No. 3329/Chny/2019, dated 28/12/2023, wherein the ITAT took the view that the ‘ sum specified’ as per ExplanaƟon to SecƟon 269SS of the Act, only applicable for advance receivable, namely, ‘as advance or otherwise’ means advance can be in any manner, and therefore, this provision will not apply to the transacƟon that happens when the final payment at the Ɵme of registraƟon of sale deed and payment takes place before sub-registrar for registraƟon of property. Relevant part of para-No.12.1 of the decision of the ITAT is as under : “From the above provisions, Memorandum explaining the intenƟon of amendment by Finance Bill, 2015 including the definiƟon of ‘sum specified’ brought in the Explanation to Section 269SS of the Act, it is clear that the intenƟon for bringing this provision was to curb the generaƟon of black money in real estate prohibiƟng acceptance or repayment of advance in cash of Rs.20,000/- or more for any transacƟon in immovable property. This was explained by Hon'ble Finance Minister while placing the Finance Bill, 2015 in her budget speech highlighƟng the intenƟon of the amendment that the amendment in ExplanaƟon to SecƟon 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 transacƟon that happens at the Ɵme of final payment at the Ɵme of registraƟon of sale deed and payment is made before sub-registrar at the Ɵme of registraƟon of property. In the present case before us, it is an admiƩed fact that all sale deeds were registered and cash payment was made at one go before the sub- registrar at the Ɵme of registraƟon of sale deeds of plots. Hence, in our view, there is no violaƟon of provisions of secƟon 269SS of the Act in the present case in the given facts and circumstances of the case and hence, penalty is not exigible in this case. Hence, we confirm the order of CIT(A) deleƟng the penalty but on enƟrely ITA No. 488/Hyd/2023 Page 5 of 5 different ground i.e., on jurisdicƟonal issue only. Accordingly, the appeal of the Revenue is dismissed.” 9. In the present case before us, it is an admiƩed fact that the assessee received the amount of cash of Rs.9,38,000/- not as advance, but as the final payment in front of the Sub-Registrar at the Ɵme of registraƟon for sale of property. While respecƞully following the view taken by the Co-ordinate Bench of the Tribunal in the case of R. Dhinagharan(HUF) (supra), we hold that there is no violaƟon of provisions of secƟon 269SS of the Act in the present case in the given facts and circumstances and hence, penalty under secƟon 271D of the Act is not leviable. Hence, we allow the grounds raised by the assessee. 10. In the result, appeal of the assessee is allowed. Order pronounced in the open court on this the 05 th July, 2024. Sd/- Sd/- (MANJUNATHA G.) (K. NARASIMHA CHARY) ACCOUNTANT MEMBER JUDICIAL MEMBER Hyderabad, Dated: 05/ 07/2024 PVV/SPS Copy forwarded to: 1. Katasani Thirupal Reddy C/o KatrapaƟ & Associates, 1-1-298/2/B/3 Sowbhagya Avenue Apts, 1st Floor, Ashoknagar, Street No.1 Secunderabad 500020 2. Income Tax Officer Ward-1 Nandyal 3. Pr.CIT GUNTUR. 4. DR, ITAT, Hyderabad. 5. GUARD FILE