Manemma Polu vs. ITO, Ward 9(1)

Parties Involved

Facts Summary

The assessee, Manemma Polu, did not file her return of income for the assessment year 2017-18 within the prescribed time. The Assessing Officer issued a notice under section 142(1) of the Income-tax Act, 1961 on 30.01.2018. During the financial year 2016-17, the assessee deposited cash aggregating to Rs.26,98,051/- in her bank account during the demonetization period between 09.11.2016 and 30.12.2016. The assessee explained that the cash deposits were from the sale consideration received from the sale of an open plot of land for a total consideration of Rs.26,67,000/-. The Assessing Officer accepted the explanation and completed the assessment under section 144 of the Act, determining the income at nil demand. However, the Assessing Officer noticed that a portion of the sale consideration amounting to Rs.14,70,000/- was received in cash prior to the execution of the registered sale deed, which was in violation of the provisions of Section 269SS of the Act. The Assessing Officer initiated penalty proceedings under section 271D of the Act and levied a penalty of Rs.14,70,000/-. The assessee appealed against the penalty order before the Commissioner of Income Tax (Appeals), who confirmed the penalty. The assessee then appealed to the Tribunal.…

Legal Issues

• 1. Whether the penalty proceedings initiated under section 271D of the Act are sustainable in law?
• 2. Whether the amount of Rs.14,70,000/- received in cash falls within the scope of Section 269SS of the Act?

Judgment Outcome

Decided in favour of Assessee.

Precedents Relied Upon

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