Abbayi Sunkara vs. Income Tax Officer

Parties Involved

Facts Summary

Abbayi Sunkara, the appellant, filed his return of income for the assessment year 2017-18, declaring an income of Rs. 5,26,150/-. The Assessing Officer (AO) determined the assessee's total income at Rs. 8,93,342/- under Section 143(3) of the Income Tax Act, 1961. The AO observed that the assessee had made cash deposits aggregating to Rs. 63,12,776/- during the year under consideration. The assessee submitted that he was an agent for M/s Navata Road Transport, Annaparthi, and his main source of income was from plying of lorries. The assessee also admitted capital gains arising from the sale of an immovable property during the year under consideration. The Joint Commissioner of Income Tax initiated penalty proceedings under Section 271D of the Act for accepting sale consideration in excess of the prescribed limit in cash. The assessee contended that the purchasers were agriculturists who insisted on purchasing the property by making payment in cash. The assessee also submitted that he was not aware of the tax implications and the amendment made to Section 269SS of the Act. The Joint Commissioner imposed a penalty of Rs. 9,15,000/- under Section 271D of the Act, which was upheld by the Commissioner of Income Tax (Appeals). The assessee appealed against the penalty before the Income Tax Appellate Tribunal.…

Legal Issues

• 1. Whether the Assessing Officer is justified in levying penalty U/s 271D of Income Tax Act which is bad in law and facts of the case.
• 2. Whether the Order of penalty u/s 271D of the Act is time-barred and is liable to be quashed.
• 3. Whether the penalty of ₹ 9,15,000 levied under section 271D by NFAC vide order dated 22.08.2021 is liable to be quashed as invalid in the absence of any satisfaction recorded by the assessing officer vide order dated 09.12.2019 under section 143(3) of the Act.

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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