Analysis of Section 269SS of the Act This section was introduced in the Act with the objective that Unaccounted cash found in the course of searches carried out by the Income-tax Department is often explained by taxpayers as representing loans taken from or deposits made by various persons. Unaccounted income is also brought into the [&he...
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a) Legal Measure Applicable to Receipt of Money i. Section 13A : Exemption for certain income of political parties No donation exceeding Rs.2000 is received by such political party otherwise than by an account payee cheque drawn on a bank or an account payee bank draft or use of electronic clearing system through a bank […]...
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A number of new provisions have been introduced in the Income Tax Act from time to time to put restrictions on cash transactions as well as to incentivise the non-cash transactions. Cash transactions have always played a major role in the Indian Economy and consistently were responsible for generation and accumulation of Black Money. The ...
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Mohammadyusuf R.Dargad Vs ACIT. (ITAT Bangalore) -
The issue under consideration is whether the issue of penalty notice u/s 271D is justified under the Act? Penalty u/s 271D shall not be levied in the case of near relatives...
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Measures taken to discourage Cash Transactions and to promote Digital Economy by CBDT Introduction:- a) Sections 269SS and 269T which deals with cash payment and repayment of loans and deposits. b) Both the sections were introduced to curb the black money. Tax evasion is one of the serious problems in India causing economic disparities. c...
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Provisions Of 269SS, 269T, 271D AND 271E As Per Finance Bill 2014 And Finance Bill 2015 And Some Issues Regarding Penalty U/S 271D, 271E And Relating To Amendments. Consequences of contravention of section 269SS: Section 271D of Income Tax Act 1961 provides that if a loan or deposit is accepted in contravention of the provisions of sectio...
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No person shall accept any loan or deposit in a single day from another person in any form other than account payee cheque or bank draft, if aggregate amount involved is more than Rs 20,000. This provision has come into force to counteract the evasion of tax by mode of acceptance of money in certain cases.
The objective is to prevent tra...
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Hardeep. Singh Vs JCIT (ITAT Chandigarh) -
Transactions between the assessee and the Commission Agent were relating to the sale of agriculture crops, therefore, there was no receipt or repayment of loan or deposit, accordingly penalty levied by the A.O. and sustained by the Ld. CIT(A) under section 271 E of the Act is also deleted....
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Apart from penalty for various defaults, the Income-tax Act also contains provisions for launching prosecution proceedings against the taxpayers for various offences. In this part you can gain knowledge about the various provisions relating to prosecution which can be launched under the Income-tax Act....
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Apart from levy of penalty for various defaults by the taxpayer, the Income-tax Law also contains provisions for launching prosecution for offences committed by the taxpayer. In this part you can gain knowledge about offences in respect of which prosecutions can be launched under the Income-tax Law....
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In the tutorial on Penalties Under the Income-tax Act, we discussed various penalties imposable under the Income-tax Act in respect of various defaults. Apart from enacting penalty provisions...
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Under the Income-tax Act, penalties are levied for various defaults committed by the taxpayer. Some of the penalties are mandatory and a few are at the discretion of the tax authorities. In this part, you can gain knowledge about the provisions relating to various penalties leviable under the Income-tax Act....
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Penalties and Prosecutions Default in complying with provisions of or with conditions prescribed under the Income-tax Act would attract certain penalty and in critical cases prosecutions as well. The document will provide you information about the punishable offences, prosecutions and the quantum of penalties that can be imposed under the...
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N.S.S. Karayogam Vs CIT (Kerala High Court) -
Assessee could not establish any 'reasonable cause' with respect of acceptance of the deposits in cash, exceeding the permissible limit, imposition of the penalty was re-affirmed....
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Shri Venkat Narayana Raju Pasuparthy Vs Addl. CCIT (ITAT Hyderabad) -
: Where there existed reasonable cause for the assessee in accepting the loans in cash and particularly as the loans were repaid by way of RTGS, i.e., via banking channels, penalty levied by AO under section 271D was deleted....
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With a view to counteracting evasion of tax, section 269SS provides modes of taking / accepting certain types of loan / deposit / specified sum. In case the person fails to comply with the said provisions of section 269SS, then he would be liable to pay the penalty as prescribed under section 271D of the […]...
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Snehalata Sitani Vs JCIT (ITAT Kolkata) -
Where the loans were taken by assessee in cash from his relatives, the transactions between relatives were not in the nature of loans or deposits as envisaged in section 269SS and the penalty imposed under section 271D was accordingly cancelled....
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Ashok Kumar Bagaria Vs JCIT (ITAT Kolkata) -
Since assessee had given reasonable cause for availing loan in cash from his father within the meaning of section 271D, therefore, he would be out of the rigours of levy of penalty under section 271D and no penalty could be levied....
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SOME INTERESTING ASPECTS OF PENALTY U/S 271D r.w.s 269SS OF THE INCOME-TAX ACT, 1961 Penalty under section 271D the Income-tax Act, 1961 is imposed upon contraventions of provisions of section 269SS of the Act. In this article, an attempt has been made to touch upon certain aspects not usually discussed but at the same time […]...
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Shri Sanmathi Ambanna Vs JCIT (ITAT Bangalore) -
Shri Sanmathi Ambanna Vs JCIT (ITAT Bangalore) In penalty proceedings, the assessee, inter alia, submitted that the transactions in question cannot be strictly construed as loan but rather are in the nature of gifts from his father-in-law Shri. G. P. Padmakumar because of the fact that the person giving the money and the person accepting ...
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Sonia Malik Vs JCIT (ITAT Delhi) -
In the instant case, has received cash loan from her parents and brother to meet the stamp duty cost for purchase of a house property for her own living, therefore, I am of the considered opinion that it is not a fit case for levy of penalty u/s 271D of the Act and the provisions of section 273B will come to the rescue of the assessee as ...
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M/s. Space N Place Promoters P. Ltd. Vs. JCIT (ITAT Chennai) -
Penalty u/s 271D could not be imposed on assessee for advances against sale of flats and cash receipts received from the promoters through their respective current accounts as nothing had been brought on record by Revenue to show that the receipts were superfluous in nature and not for the business of assessee....
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M/s. P.R. Associates Vs ACIT (ITAT Pune) -
M/s. P.R. Associates Vs ACIT (ITAT Pune) We find that the assessee specifically submitted before the AO during the course of penalty proceedings, which fact has also been captured in the penalty order, that its business was inoperative for the last 7 years and it had already borrowed loans from Shree Suvarna Sahakari Bank Ltd. […]...
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M/s. Vasan Healthcare P Ltd. Vs Addl. CIT (Madras High Court) -
Penalty u/s 271D and 271 E was leviable as there was absolutely no genuinity or bonafideness in the transaction done between the promoter/ director and assessee- company....
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M. Sougoumarin Vs ACIT (Madras High Court) -
M. Sougoumarin Vs ACIT (Madras High Court) High Court held that there was no such reason for regular loan transactions of borrowing and repayment in cash of amounts exceeding Rs.20,000/- so as to escape penal liability under Sections 271E and 271D of the IT Act. FULL TEXT OF THE HIGH COURT ORDER / JUDGMENT These […]...
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Income Tax Officer Vs Shri Prashant Sharma (ITAT Jaipur) -
Penalty order u/s 271D and 271E would reckon from the date when the show cause notice was issued by the AO and not from the date when the show cause notice was issued by the Joint Commissioner who is competent to pass the penalty orders....
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ITO Vs Dayamayee Marble & Granite (ITAT kolkata) -
Where assessee received capital from the partner in cash, it did not tentamount to loan or deposit and therefore, penalty under section 271D was not to be levied for violation of section 269SS....
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Monarch Dyestuff Industries And Exports Ltd. Vs JCIT (ITAT Ahemdabad) -
Assessee was not liable for penalty under section 271D and 271E for availing cash loans/deposits in violation of section 269SS and 269T as it had availed the facility in order to re-establish itself, and for fulfilment of promises given for the purpose of BIFR which was a reasonable cause foe not levying penalty....
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ITO Vs Shri Prashant Sharma (ITAT Jaipur) -
Order of penalty passed under sections 271D and 271E was to set aside as the same was passed after expiry of six months from the action initiated for imposition of penalty and barred by limitation as per section 275(1)(c)....
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Baldev Singh Vs Addl. CIT (ITAT Chandigarh) -
The assessee in the present case has also raised the plea of reasonable cause, that the person advancing the loan was agriculturist and had no bank account. Accordingly, we delete the penalty levied under sections 271D and 271E of the Act....
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M. Sougoumarin Vs The Assistant Commissioner of Income Tax (Madras High Court) -
These appeals are against an order dated 31-3-2016 passed by the Income Tax Appellate Tribunal B Bench, Chennai, allowing the appeals, being I.T.A.Nos.262 and 263/Mds/2015, in relation to the assessment years 2008-2009 and 2012-2013 filed by the respondent Revenue and restoring the penalty imposed by the Assessing Officer under Sections 2...
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Shri Tej Narayan Agarwal Vs Addl. CIT (ITAT Hyderabad) -
Shri Tej Narayan Agarwal Vs Addl. CIT (ITAT Hyderabad) Amount received and repaid by the assessee subsequently is not a loan. This is a transaction done on behalf of his children to accommodate tham in obtaining DD’s without charges and cannot be considered as taking of loan or repayment of loan in cash. Facts of […]...
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Deepak Sales & Properties Pvt. Ltd Vs ACIT (ITAT Mumbai) -
Deepak Sales & Properties Pvt. Ltd Vs ACIT (ITAT Mumbai) There is no dispute between the parties that bonafide nature of transactions alone would not be sufficient to escape the clutches of sec. 271D of the Act. As per the decision rendered by Hon’ble Supreme Court in the case of Kum. A.B. Shanthi (supra), it […]...
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Shri Sunil Kumar Sood Vs The JCIT (ITAT Delhi) -
Since in the present case also the assessee had taken the loan from his wife for the purchase of house which is for the benefit of the whole family, therefore, following the decision cited [supra], we hold that penalty levied u/s 271D of the Act in the instant case is not justified. ...
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Mr. Girishkumar Popatlal Vs JCIT (ITAT Ahmedabad) -
The ld. counsel vehemently stated that the legislative intent in prohibiting the acceptance and repayment of money in cash over and above Rs. 20,000/- is to check the unaccounted money and not to hit the genuine business need....
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The Commissioner Of Income Tax Vs. M/s Al-Ameen Educational Trust -
The Revenue is in appeal against the common order of the Tribunal for the assessment years 2005-06 and 2006-07. The issue relates to acceptance of loans and deposits other than by way of Cheque or Draft, in violation of Section 269SS of the Income Tax Act, 1961 [for brevity the Act] and the resultant penalty levied under Section 271D, tot...
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The Government of India with an intention to evade black money and to discourage the cash transactions time and again taking various steps. Specially the Income tax Act is amended and provided with disallowances and stringent penal provisions for various types of cash transactions. Let us briefly understand some of such provisions here....
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Sri Jagmohan Sharma Vs. JCIT (ITAT Kolkata) -
Sri Jagmohan Sharma Vs. JCIT (ITAT Kolkata) The transactions between these family members are neither loans nor deposit and purely a family system and purely a family requirement to help each other in the needy hours, for example medical help, education help and expenses to run the family. That is, one member of the family […]...
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Sri Nikhil Banik Mazumder Vs. JCIT (ITAT Kolkata) -
To support the family members, the money has been given by the assessee to his son/wife. This is simply a transfer of money from one family member to another family member to support day to day expenses, educational expenses and other family expenses...
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CIT Vs. Apex Finlease Ltd. & Ors. (Allahabad High Court) -
CIT Vs. Apex Finlease Ltd. & Ors. (Allahabad High Court) Section 269SS does not include in its ambit where there is a transaction of loan or deposit by way of entries in the books of account by crediting or debiting the account of the other person. In other words, the provisions of section 269SS of […]...
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The Income Tax Officer Vs Mrs. Lakshmi Vishwanath (ITAT Delhi) -
The Income Tax Officer Vs Mrs. Lakshmi Vishwanath (ITAT Delhi) Briefly the facts of the case are that the A.O. in the assessment order noted that assessee was asked to explain source of the cash deposit in her bank account maintained with State Bank of India. The assessee attended the proceedings before A.O. and filed […]...
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CIT Vs. Sunil Sugar Co. (Allahabad High Court) -
Assessee’s contention was that the entries were not in the nature of the loan or deposit on the face of it was not acceptable, as once any amount had been received by the assessee and the same was shown as received in its books of account, then it had partaken the nature of deposit and penal provision of section 271D was attracted. ...
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Pr. CIT Vs Tehal Singh Khara & Sons (Punjab and Haryana High Court) -
Punjab and Haryana High Court held in the case of Pr. CIT Vs Tehal Singh Khara & Sons that Penalty under section 271D of Income Tax Act, 1961 not justified for Contravention of section 269SS if assessee had given reasonable cause for entering into the cash transactions, as creditors from whom the cash was received […]...
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The A.P. Dairy Development Vs Dy. Commissioner of Income (ITAI Hyderabad) -
Brief facts of the case are that the assessee filed the return of income on the basis of the provisional accounts audited by a Chartered Accountant but did not file the audited accounts. The AO, therefore, issued a notice u/s 271D for levy of penalty for non filing of the audit report. The assessee explained […]...
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CIT Vs Hissaria Brothers (Supreme Court of India) -
Penalty proceedings for default in not having transactions through the bank as required under Sections 269SS and 269T are not related to the assessment proceeding but are independent of it....
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Circular No. 10/2016-Income Tax -
(26/04/2016) -
It is a settled position that period of limitation of penalty proceedings under section 271D and 271E of the Act is governed by the provisions of section 275(1)(c) of the Act. Therefore, the limitation period for the imposition of penalty under these provisions would be the expiry of the financial year in which the proceedings, in the cou...
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Circular No. 09/DV/2016 (Departmental View) -
(26/04/2016) -
It has been brought to notice of CBDT that there are conflicting interpretations of various High Courts on the issue whether the limitation for imposition of penalty under sections 271D and 271E of the Income tax Act, 1961commences at the level of the Assessing Officer (below the rank of Joint Commissioner of Income Tax.) or at level of t...
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Global Realty Heritage Venture (Cochin) (P.) Ltd., Vs Addl. CIT (ITAT Delhi) -
Global Realty Heritage Venture (Cochin) (P.) Ltd., vs Addl. CIT (ITAT Delhi) In the absence of any such evidence the plea of bonafide belief in the peculiar circumstances cannot be discarded. It is seen that the assessee has consistently canvassed that there was a bonafide belief that the amount taken...
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Grihalakhsmi Vision Vs Additional CIT (Kerala High Court at Ernakulam) -
The Hon'ble Kerala High Court in the case of Grihalakshmi Vision held that the penalty proceeding under Sec 271D and 271E can be initiated by Joint commissioner only and the limitation period of six months to be reckoned from the end of month of initiation of penalty proceedings by Joint ...
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CIT-II, Agra Vs Smt. Dimpal Yadav (Allahabad High Court) -
In a landmark judgement of Hon’ble Allahabad High Court in the case of CIT- V. Smt. Dimpal Yadav, it was held that where even through assesee had taken a loan in cash, since loan was routed through bank account of the assessee for the payment to Government for converting land into free ...
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Envogue Wood Working Pvt Ltd Vs ACIT (ITAT Delhi) -
ITAT held in Envogue Wood Working Pvt Ltd Vs ACIT that if the assessee had taken and repaid the loan in cash and provided the sufficient reasonable cause of doing such then penalty u/s 271D & 271E would not be imposed....
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Smt. Parin K. Rajwani Vs JCIT (ITAT Mumbai) -
The ld. Counsel for the assessee for the year AY 2007-08 regarding the imposition of penalty contended that the Assessee were not aware of the provisions of Law in which the receipt of loan through cheque or bank draft was required. ...
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M/s Muthoot Financiers group firms Vs CIT (Delhi High Court) -
The respondent assessee in all these appeals are partnership firms engaged in the business of banking and registered under the Kerala Money Lending Act. The assessees had filed return of income and the same was accepted in due course....
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Goldstar Electricals Pvt. Ltd. Vs ACIT (ITAT Mumbai) -
Hon’ble Bombay High Court in the case of Triumph International Finance (I) Ltd., 345 ITR 270, held that settling claims by making journal entries in the respective books is also one of the recognized modes of repaying loan or deposit. In the absence of any finding recorded in the assessment order or in the penalty order to the effect th...
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Mode of taking or accepting certain loans, deposits and specified sums and mode of repayment of loans or deposits and specified advances The earlier provisions contained in section 269SS of the Income-tax Act provide that no person shall take from any person any loan or deposit otherwise than by an account payee cheque or account [&hellip...
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As per Section 269SS if specified sum (any sum of money receivable, whether as advance or otherwise, in relation to transfer of an immovable property, whether or not the transfer takes place) taken or accepted in cash is Rs. 20,000 or more , penalty equal to amount taken shall be imposed under S. 271D....
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According to section 269SS of Income Tax Act, while transacting Immovable Property, 100% penalty will be levied if seller has accepted an amount of Rs. 20,000 or more in cash from the buyer. e.g. if for selling an immovable property 'A' has received an amount of Rs.1 lakh in cash from 'B' then 'A' has to pay 100% penalty of Rs. 1 lakh....
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Measures to curb black money have been on the lips of every Finance Minister and Honorable Minister Shri Arun Jaitley is no exception. As we know, Real Estate business is the largest contributor of black money transactions. He trusts on the JAM (Jandhan, Aadhar, Mobile) generation to move away from such dark deals and build […]...
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Commissioner Of Income-Tax.Vs Balaji Traders. (Madras High Court) -
Whether on the facts and in the circumstances of the case, the Appellate Tribunal was right in law in holding that no penalty is leviable under section 271D when there has been repeated violations of section 269SS on the ground that the creditors are genuine persons and there was no revenue loss to the Exchequer...
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M/s. Soundarya Textiles Vs The Assistant Commissioner Of Income Tax (Kerala High Court) -
The authorities below as well as the Tribunal, on verification of the materials on record, came to a finding that the audit report and balance sheet of the assessee had shown the outstanding amount as loan received from 12 persons....
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CIT Vs M/s Muthoot Financiers (Delhi High Court) -
Section 269SS would not be violative when money is exchanged inter-se between the partners and partnership firm in spite of the fact that the partnership firm and individual partners are separate assessees. ...
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M/s Eqbal Inn & Hotels Ltd. Vs The JCIT (ITAT Chandigarh) -
The Assessing Authority having noticed that the assessee-company had accepted share application money in cash from its directors in violation of provisions of section 269SS, imposed penalty under section 271D and Commissioner (Appeals) upheld penalty order....
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Deputy Commissioner of Income-tax, Circle-5 Vs Akhilesh Kumar Yadav (ITAT Agra) -
In the instant case, the AO did not dispute the genuineness of the transaction entered into between the assessee and Samajwadi Party and no addition had been made in this regard. Instead of cash, if the assessee had taken loan through cheque, it would have taken some time for process in clearing. Since the amount was deposited and withdra...
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DCIT Vs Rupen Das (ITAT Kolkata) -
DCIT Vs Rupen Das (ITAT Kolkata)- The assessee was engaged in providing security guards to various Government and non-Government organisations and regular payment to the employees was essential to provide better services. ...
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Income Tax Officer Vs. M/s. Avadh Rubber Ltd. (ITAT Kolkata) -
Income Tax Officer Vs. M/s. Avadh Rubber Ltd. (ITAT Kolkata) I.T.A. No. 1853/Kol/2008 Dated : 28th May, 2010 Sole dispute is whether the contribution of Abhisek Saraf in cash towards share application money in the sum of Rs. 3 lacs should be construed to be a deposit within the meaning of s. 269SS in order […]...
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CIT Vs. M/s Speedways Rubber Pvt. Limited (Punjab & Haryana High Court at Chandigarh) -
The Assessing officer initiated proceedings for alleged violation of section 269SS of the Act in as much as the assessee accepted share application money being Rs.20,000/- in cash. Thereafter, penalty was imposed. On appeal, CIT(A) upheld the stand of the assessee that the amount received...
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VLS Foods (P.) Ltd. Vs Additonal Commissioner of Income-tax IT (ITAT Delhi) -
In the present case, the alleged amount of Rs. 8.55 lakhs was received by the assessee in cash on account of share application money, penalty under s. 271D cannot be levied because the receipt of share application money is neither loan nor deposit and hence the impugned receipt of Rs. 8.55 lakhs is not governed by s. 269SS of the Act. We ...
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The Commissioner of Income Tax Vs Sunil Kumar Goel (Punjab & Haryana High Court) -
There is no dispute about the fact, that the instant cash transactions of the respondent-assessee were with the sister concern, and that, these transactions were between the family, and due to business exigency. A family transaction, between two independent assessees, based on an act of casualness, specially in a case where the disclosure...
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Commissioner Of Income-Tax. Vs. Maheshwari Nirman Udyog (Rajasthan High Court) -
In the instant case, there was no evidence to show that money was loaned or kept deposited for a fixed period or repayable on demand. Further, the sister concerns and the assessee were owned by the same family group of people with a common managing partner with centralised accounts under the same roof...
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Commissioner Of Income-Tax. Vs. Rugmini Ram Raghav Spinners Private Limited. (Madras High Court) -
Q.1. What is the definition of MSME? A.1. The Government of India has enacted the Micro, Small and Medium Enterprises Development (MSMED) Act, 2006 in terms of which the definition of micro, small and medium enterprises is as under:(a) Enterprises engaged in the manufacture or production, processing or preservation of goods as specified b...
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Commissioner Of Income-Tax Vs Lokhpat Film Exchange (Cinema) (Rajasthan High Court) -
Under the general provision relating to Partnership Act that partnership firm is not a juristic person and for inter relationship different remedies are provided to enforce the rights arising out of their inter se transactions, the issue about separate entities apart, it cannot be doubted that the assessee has acted bona fide and his plea...
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