Modifications in Sale Deed by approaching Registrar:
Nammalvar Lingusamy v. The Additional Commissioner of Income Tax [I.T.A. No.532/Chny/2022] (ITAT Chennai)
The assessee had sold an immovable property dated 27.04.2016. A portion of the sale consideration (₹.1,60,00,000/-) was received in cash. Upon receiving this information, the Assessing Officer [Addl. CIT] issued a notice under section 274 r.w.s. 271D of the Income Tax Act, 1961, imposing a penalty of ₹.1,60,00,000/- under section 271D of the Act on 30.09.2019 for accepting the sale consideration of the immovable property in a manner that violated the provisions of section 269SS of the Act, without any reasonable cause. The penalty levied under section 271D of the Act was upheld by the ld. CIT(A) on appeal.
The Assessing Officer imposed a penalty under section 271D of the Act as receiving part consideration in cash violates the provisions of section 269SS of the Act. Despite the assessee presenting various grounds to the ld. CIT(A) in an appeal seeking the deletion of the penalty, a different argument was raised before the Tribunal. The assessee contended that the “consideration clause of the deed of sale incorrectly portrayed the transaction as involving cash”.
According to the registered deed of sale, it was stated that the taxpayer received a portion of the sale amount of INR 1,60,00,000 in cash, which goes against the regulations outlined in section 269SS of the Act. Consequently, the Assessing Officer commenced penalty proceedings and imposed a penalty under section 271D of the Act.
It was evident that the assessee has received a portion of the sale consideration in cash amounting to ₹1,60,00,000/-. However, the assessee argued that the cash transaction mentioned in the deed of sale was actually an adjustment of an existing debt through a journal entry, and that it was wrongly recorded as cash.
The ITAT after having reviewed the available materials on record and examined the orders of authorities below, held that The assessee’s contention of a wrong entry in a document that was duly signed by both the seller and buyer and registered by the Sub Registrar of the State Revenue Department, without any substantial evidence, was not acceptable by any Court of Law.
The Hon’ble ITAT further held that, in such a case, the assessee should have approached the Appellate Authority of the Tamil Nadu State Revenue Department for any necessary modifications, additions, deletions, etc., which was not done.
Considering the aforementioned facts and circumstances, the ITAT believed that the ld. CIT(A) has appropriately upheld the penalty imposed under section 271D of the Act, and therefore, the appeal filed by the assessee was dismissed.
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