Introduction
The Income Tax Appellate Tribunal (ITAT) Delhi Bench ‘G’, New Delhi, presided over by Shri Shamim Yahya, Accountant Member, and Shri Anubhav Sharma, Judicial Member, delivered a landmark judgment on 20th October 2022, in the case of Saroj Sethi vs. JCIT, Range 36, Delhi. The case discussion revolves around the appeal filed by Saroj Sethi, the appellant, against the order dated 25.03.2022 by the National Faceless Appeal Centre (NFAC) concerning the Assessment Year 2017-18.
Background of the Case
The contention at the heart of this appeal was the imposition of a penalty of Rs.5,80,000/- under section 271D of the Income-tax Act, 1961 (‘the Act’), on the appellant, Saroj Sethi. The basis of this penalty was a purported violation of section 269SS of the Act, following an ex-parte order. Section 269SS restricts the acceptance of cash loans or deposits of Rs.20,000 or more, a condition aimed at curbing black money circulation and ensuring transparency in the transaction of immovable properties.
Arguments Presented
The appellant raised several grounds in her appeal, including the significant point of not being granted a chance to be heard. Despite this, the Commissioner of Income Tax (Appeals) [CIT(A)] confirmed the penalty citing the amendment to section 269SS, which from 1st June 2015, explicitly prohibited cash transactions in the sale of immovable property over a specific amount.
The defense, represented by Shri Abhishek Kumar, Senior DR, argued in support of the penalty, holding the transgression against section 269SS as clear and indubitable. However, none appeared on behalf of Saroj Sethi during the hearing, emphasizing the procedural lapses in granting the appellant a fair hearing opportunity.
The Tribunal’s Judgement
The ITAT found that the appellant, an elderly woman, received cash consideration for the sale of immovable property, contravening the amended provisions of section 269SS. The tribunal noted the appellant’s absence of representation, the lack of a sale deed to confirm the transaction’s timeline, and the procedural irregularities in the imposition of the penalty.
Considering the circumstances, the tribunal remitted the issue back to the Assessing Officer (AO) to reassess the case, adhering to the principles of justice and fairness. The AO was directed to provide Saroj Sethi an opportunity to be heard and to reevaluate the penalty imposition in light of the tribunal’s observations.
Conclusion
The appeal of Saroj Sethi was allowed for statistical purposes, providing a fresh opportunity for justice. This case underscores the significance of procedural fairness and the necessity of adhering strictly to statutory provisions. The judgment serves as a crucial precedent for cases involving penalties under section 271D and 269SS, highlighting the importance of granting taxpayers an opportunity to present their case effectively.
