| Question And Answer | |
|---|---|
| Subject: | sale of agriculture land in cash penalty under section 269ss |
| Category: | Income-Tax |
| Querist: | CA Praveen Bansal |
| Answered by: | Law Intern |
| Tags: | section 269SS, Section 269ST |
| Date: | May 19, 2025 |
assessee sold the agriculture land in cash of rs. 90.00 lakhs and cash was deposited into the bank account by the asssessee. the assessee don’t has any taxable income. whole cash was received at time of sale deed. whether penalty is leviable under section 269SS, if not what are the grounds.
The transaction of receiving Rs. 90 lakhs in cash for the sale of agricultural land violates Section 269SS. It also violates Section 269ST. The assessee is liable for penalty under Section 271D and Section 271DA. It is arguable that only Section 269ST and Section 271DA should be considered as it is a high-value cash transactions.
The defence can be that the transaction was bona fide and there was no intention to evade tax as is shown by the deposit of the money in the bank account. If the assessee is illiterate or having elementary education, that can also be a defence.
In Pushpalatha, Bengaluru vs Income Tax Officer, Ward-3(2)(1), the ITAT was considering a similar case and held:
“there was no intention, whatsoever, to generate unaccounted money/black money as the assessee had recorded the receipt of entire cash in the registered sale deed and duly disclosed the same in the return of income filed. Assessee had also claimed exemption under section 54 of the Act towards construction of residential house. In this context, it is pertinent to note that the claim made by the assessee under section 54 of the Act has been allowed by the AO in the assessment completed. Copy of the bank statement and the Assessment Order dated 09.12.2019 is placed on record. Therefore, it is clear that there is no unaccounted money / black money in the transaction. Moreover, we find that in this case there was no agreement to sell executed between the parties as is evident from the sale deed. Therefore, the assessee had no legal right to enforce the sale. All the payments were made through DD and cheques and cash was paid to the assessee only on the date of sale deed being executed. Hence, denial by the assessee to receive the consideration in cash would have resulted in failure of sale of the said property. Moreover, the amendment effected by Finance Act, 2015, to section 269SS of the Act, which had laid a restriction for receiving cash for transfer of immovable property would not have come to the knowledge of the assessee who is a woman having elementary education and no knowledge of tax laws. She would have not been under a belief that there was contravention of any provision of the Act.”