No Penalty under Section 271D on Broker for Handling Cash Transactions: ITAT Chennai
ITAT Chennai recently has held that no Penalty Under Section 271D on Broker is applicable for Handling Cash Transactions.
The case was regarding the levy of penalty under Section 271D & its applicability of Section 269SS to Agents in a Real Estate Transactions.
The issue framed was whether an intermediary handling cash transactions can be penalized:
ITAT Chennai rules that a land aggregator acting as a broker is not liable under Section 269SS as he does not receive the amount in his own right. Assessee merely facilitated transactions and immediately transferred cash to landowners.
In this case, section 226 of the Indian Contract Act applies, making the principal liable, not the agent.
Revenue’s contradictory stance of taxing commission while imposing penalties rejected – Appeal allowed, penalty quashed.
The copy of the order is as under:
