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2025 Supreme(Online)(ITAT) 3275
INCOME TAX APPELLATE TRIBUNAL (DELHI BENCH)
Shri Yogesh Kumar US, Shri Naveen Chandra, JJ
KRISHNA WANTI NEW DELHI – Appellant
Versus
JCIT RANGE-35 DELHI – Respondent
ITA 158/DEL/2023
Shri Ved Jain, Adv, Shri Ayush Garg, CA, Shri Daya Inder Singh Sidhu, CIT-DR
Penal provisions under the Income Tax Act cannot be applied retrospectively unless explicitly stated, reaffirming the principle of legality in tax law.
Headnote:(A) Income Tax Act, 1961 - Sections 271D, 269SS, and 269ST - Appeal against penalty for alleged cash transaction - The CIT(A) misapplied Section 269ST, which was not in effect at the time of the transaction, leading to an invalid penalty under Section 271DA - The court held that penal provisions cannot be applied retrospectively. (Paras 8-10)
(B) Legal Principles - The principle that penal tax provisions cannot be applied retrospectively unless expressly stated in the statute was reaffirmed. (Para 10)
Facts of the case:
The assessee was penalized for allegedly receiving cash in violation of Section 269SS, but the transaction occurred before the enactment of Section 269ST. (Para 4)
Findings of Court:
The penalty was deemed invalid as the provisions invoked were not applicable to the transaction date. (Para 10)
Issues: Whether the CIT(A) correctly applied Section 269ST and upheld the penalty under Section 271DA. (Para 7)
Ratio Decidendi: The court ruled that the application of Section 269ST was legally unsound as it could not be applied retrospectively to transactions that occurred before its enactment. (Para 10)
Result: Appeal allowed and penalty deleted.
ORDER
PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:-
This appeal by the assessee is preferred against the order of the NFAC, Delhi dated 20.12.2022 for A.Y 2017-18.
2. The assessee has raised the following grounds of appeal:
“1. On the facts and circumstances of the case, the order passed by the learned Commissioner Income Tax (Appeals), National Faceless Appeal Centre (CIT(A), NFAC)) is bad, both in the eye of law and on the facts.
2 On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in confirming the action of the AO (JCIT, Range-35) levying the penalty of Rs. 33,60,000/- invoking section 271D of the Income Tax Act.
3. On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in passing the order by wrongly holding that the assessee has violated the provisions of section 269ST of the Income Tax Act and thus liable for penalty under section 271DA of the Act by grossly ignoring the fact that AO has levied the penalty under section 271D in respect of violation of the provisions of section 269SS of the Income Tax Act.
4. On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in ignoring the contention of the assessee that the penalty has been levied by the AO despite there being no contravention of the provisions of section 269SS of the Income Tax Act.
5. On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in confirming the penalty ignoring the contention of the assessee that the penalty has been initiated and levied by the AO without recording any satisfaction as to the contravention of provisions of section 269SS of the Income Tax Act by the assessee.
6. On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in confirming the penalty ignoring the contention of the assessee that the penalty has been levied by the AO despite the fact that no cash has been received by the assessee against the alleged sale transaction and thus, there is no contravention of the provisions of section 269SS of the Income Tax Act.
7. On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in confirming the penalty ignoring the contention of the assessee that the penalty has been levied by the AO without bringing on record any evidence which could justify that the assessee has received the cash against the sale of property.
8 On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in confirming the penalty ignoring the contention of the assessee that the property alleged to have been sold by the assessee does not belong to the assessee and not registered in the name of the assessee.
9. On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in confirming the penalty ignoring the contention of the assessee that alleged agreement to sell on the basis of which the penalty has been levied has no reference that the assessee has received any cash amount from the buyer.
10 On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in confirming the penalty ignoring the contention of the assessee that civil suit has been filed against the alleged document (agreement to sell) and the same is the dumb document which should not be relied upon by the AO.
11. On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in confirming the penalty ignoring the contention of the assessee that AO has made the allegation that the assessee has received the cash without conducting any independent enquiry from the buyer of the property by invoking section 131 of the Income Tax Act.
12. On the facts and circumstances of the case, the learned CIT(A), NFAC has erred both on fact and in law, in confirming the penalty ignoring t
