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Judgment
PER SANJAY AWASTHI, ACCOUNTANT MEMBER:
This appeal arises from order dated 25.02.2026, passed u/s 250 of the Income Tax Act, 1961 (hereafter as “the Act”), by NFAC.
In this case, the Ld. AO has imposed a penalty u/s 271D of the Act for receiving payments in cash amounting to Rs.4,28,330/-. It is seen from the orders of authorities below that the assessee jointly sold a property where cash payments of Rs.12,85,000/- was received by the assessee along with two other persons. Thereafter, one third amount, being Rs.4,28,330/-, was held to be in contravention of 269SS of the Act.
The aggrieved assessee approached the Ld. CIT(A) where also she could not succeed on the basis of finding given in the body of the impugned order. It was held that the assessee received the impugned payment in cash and any explanation that some part of which was received through cheque, could not be proved.
The assessee has now approached the ITAT with grounds challenging the action of authorities below.
Before us the Ld. AR stated that the assessee was entirely ignorant of taxation provisions and thereafter had accepted some payment in cash. The Ld. AR read out the explanation submitted before the Ld. AO and for the sake of capturing the essence of the same, we may extract it as under: -
“This is to confirm that I Ranju Devi having PAN card number CRJPD2369P have sold the part of property No.4707 to 4709, Ward No. XV Shora Kothi, Pahar Ganj, New Delhi – 110055 to Mrs. Rukmesh Kumari Rathor (PAN : BRWPR5858R) By Sale Deed dated 18th September, 2017 registered with Sub Registrar III, New Delhi at Sr. No.7562 on 19.09.2017. The total consideration of Rs.12,85,000/-was paid to me is attached in PDF in the name of justification. I have received the above mentioned amount from Rukmesh Kumari Rathor as per the amount available with her. She has given me cash from time to time as per the sources which to my knowledge was earnings from her daily business and savings. I have received amount in the form of NEFT and Cheque also. During the period of these transactions my mother in law was severely ill due to heart attack which became a chronic disease for her till date. Her daily medicine cost was around 3000-4000. Me being not so educated took some parts of the payment in cash as my mother in law was hospitalized and I had to pay for her daily medicines and other medical tests cost. I don’t know how to operate ATM or other Banking Transactions with confidence since I have only did my schooling till 8th class, which left me uneducated. The agreement amount was Rs.12.85 lakhs only and the amount was distributed evenly between three people 1. Ranju Devi, 2. Brajesh Kumar, 3. Rajesh Kumari.”
The Ld. AR concluded his argument by stating that due to ignorance of law and requirement of cash the assessee has inadvertently violated the provisions of section 269SS of the Act and she deserved consideration u/s 273B of the Act.
The Ld. DR relied on the orders of the authorities below.
We have heard the Ld. AR/DR and we have gone through the records before us. It is seen that the prayer of the assessee before the authorities below and specifically before the Ld. AO, as extracted (supra), would lend credence to the fact that the infraction of law was inadvertent and motivated by a need for cash. We are inclined to grant relief to the assessee under the provisions of Section 273B of the Act, which is specifically for cases of this kind where “reasonable cause” is visible at first glance. We direct the deletion of the impugned penalty accordingly.
In the result, the appeal is allowed.