IN THE INCOME TAX APPELLATE TRIBUNAL COCHIN BENCH BEFORE SHRI INTURI RAMA RAO, AM AND SHRI SOUNDARARAJAN K., JM Assessment Year: 2017-18 Subramanyan Harikumar .......... Appellant

29/58-4, 42/409-I, Mania, M.G. Road Karnaki Nagar, Palakkad 678001 [PAN: ACHPH7765A]

vs.

Jt. Commissioner of Income Tax .......... Respondent Aayakar Bhavan, English Church Road Palakkad 678014 Appellant by: Smt. Divya Ravindran, Advocate Respondent by: Smt. Leena Lal, Sr. D.R. Date of Hearing: 10.03.2025 Date of Pronouncement: 20.03.2025

O R D E R

Per: Inturi Rama Rao, AM This appeal filed by the assessee is directed against the order of the National Faceless Appeal Centre, Delhi [CIT(A)], dated 14.06.2024 for Assessment Year (AY) 2017-18 confirming the levy of penalty u/s. 271D of Income Tax Act, 1961 (hereinafter "the Act").

2. Brief facts of the case are that the appellant is an individual. The return of income of AY 2017-18 was filed on 29.03.2018 declaring total income of Rs. 1,42,860/-. Against the said return of income, the assessment was completed by the by the Income Tax Officer, Ward – 1 & TPS, Palakkads (hereinafter called "the AO") vide order dated 10.10.2019 passed u/s. 143(3) of the Act accepting the returned income.

3. During the course of assessment proceedings, the AO noticed that the appellant had violated provisions of section 269SS of the Act by accepting sale consideration of Rs. 17,50,000/- in cash against sale of residential property on 29.06.2016. Accordingly, the matter was referred to the Jt. Commissioner of Income Tax, who issued show a cause notice dated 25.10.2019, to the appellant. In response to the show cause notice, the appellant filed an explanation admitting the receipt of sale consideration towards the residential property located at Vadakkanthara Road, Palakkad and the same was registered on 29.06.2016, pleading that no advance was received on sale of the said property, therefore, provisions of section 269SS had no application. However, the JCIT had proceeded with levy of penalty of Rs. 17,50,000/- u/s. 271D of the Act vide order dated 19.01.2022 placing reliance on the provisions of clause (iv) of Explanation inserted to section 269SS of the Act.

4. Being aggrieved, an appeal was filed before the CIT(A), who vide the impugned order confirmed the levy of penalty by dismissing the appeal.

5. Being aggrieved, the appellant is in appeal before us in the present appeal.

6. The learned A.R. submits that provisions of section 269SS have no application, inasmuch as, the sale consideration was received at the time of registration of the sale deed. The transaction does not fall within the purview of section 269SS of the Act. In this connection she also placed reliance on the decision of the coordinate bench in the case Bhaskar Thattaruthodiyil in ITA No. 754/Coch/2023 dated 25.09.2024. She further submits that the AO only recorded his satisfaction for initiation of penalty proceedings u/s. 271D of the Act and not the Jt. Commissioner of Income Tax.

Therefor the penalty order is vitiated.

7. On the other hand, the learned Sr. DR vehemently opposed the above submissions and submitted that the penalty proceedings were initiated by the JCIT as the show cause notice was issued by him. In this connection she also placed reliance on the decision of the Hon'ble Jurisdictional High Court in the case of Grihalakshmi Vision v. Addl. CIT [2015] 379 ITR 100. Further, she submits that there is a clear violation of provisions of section 269SS of the Act. In the absence of any reasonable cause for violation of provisions of section 269SS, the penalty is exigible, no interference in the orders of the lower authorities is called for.

8. We have heard the rival contentions of both the parties and perused the material available on record. Admittedly, in the present case the appellant had received sale consideration on sale of residential property located at Vadakkanthara Road, Palakkad in cash at the time of registration of the sale deed. It is the cas