The Addl. CIT says we split one customer's bill into two so each stayed under Rs 2,00,000. Is that a s.269ST violation?
On these facts the Tribunal deleted the s.271DA penalty, holding that where a customer bought several genuinely different items and separate invoices were raised for them, the breach was at most technical or venial and Hindustan Steel applied. But read the order for what it does not say: it never identifies which of the three limbs of s.269ST the Department invoked, and it does not deal with the 'in a day' limb, which aggregates everything received from one person in one day irrespective of how many bills were raised.
Decided by the ITAT (Kul Bharat, Judicial Member and Dr. B.R.R. Kumar, Accountant Member) on 2024-04-02, reported as ITA No. 2561/Del/2022; Assessment Year 2018-19; Income Tax Appellate Tribunal, Delhi Bench 'H'. It bears on section 271DA, section 269ST, section 271D of the Income Tax Act 1961, in Cash Transaction Limits, Penalty and Evidence & Burden of Proof matters.
This is the commonest s.269ST charge in retail and it is almost always framed loosely. Section 269ST bars receiving Rs 2,00,000 or more from a person (a) in aggregate in a day, (b) in respect of a single transaction, and (c) in respect of transactions relating to one event or occasion. Bill-splitting is answered by limb (a), not by limb (b), so an assessee who argues only that the invoices were for 'different items' is answering the wrong limb. This order is useful because the Tribunal accepted the different-items explanation, but it is a thin authority: one of the invoices in the table reproduced in the order is itself Rs 11,53,000, which engages the single-transaction limb on its own, and the order does not address that. Use it as a reasonable-cause precedent, not as a proposition that separate invoices defeat s.269ST.
Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere.
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A search under s.132A was conducted on 29 May 2018 on Shri Rishi Kishan Mehra and Shantanu Mehra, directors of the assessee company. Incriminating documents relating to the assessee were found and seized. The Assessing Officer sent a proposal for penalty to the Addl. CIT, Central Range-1, New Delhi, who on examining the impounded documents and the assessment order recorded that the company had violated s.269ST by receiving Rs 2,00,000 or more in cash from single persons 'by splitting the invoices against sale of goods at its stores'. The CIT(A) deleted the penalty so far as it related to transactions through the bank but confirmed it for the cash transactions, holding that the assessee had issued two bills to the same customer bifurcating each below Rs 2,00,000, that the purpose of bifurcation was obvious, and that no person issues two bills to the same customer for two different items. The Tribunal reproduced a table of fourteen invoices covering six customers, in which several bills of the same date were raised on the same customer — five bills on Anubhav Gupta dated 23.08.2017 (Rs 1,55,066, Rs 34,000, Rs 80,500, Rs 22,800 and Rs 22,000), two on Nisha Bhalla dated 19.12.2017, two on Rohan Kiara dated 10.11.2017 (Rs 11,53,000 and Rs 79,000), two on Fahainda Islam dated 31.12.2017 and two on Nitant Khanna dated 27.12.2017. One customer, Roopakshi Suri, appears in the table with a single invoice of Rs 2,30,000 dated 03.11.2017 and no second bill. The goods were wedding wear — sherwani kurta churidar, gowns, sarees, shoes and the like.
The appeal was allowed and the penalty under s.271DA was deleted. The Tribunal recorded at para 9 that the items purchased were marriage dresses and of different items, and at para 16 that keeping in view the entire facts and peculiar circumstances of the case no penalty was leviable.
The Tribunal set out the legislative intention behind s.269ST, noting that the Finance Act 2017 introduced ss.269ST and 271DA to curb black money by discouraging cash transactions, and reproduced, inside that quoted legislative-intention material at para 11, the observation that 'Chapter XX-B which contains the sections 269SS/T/ST, is titled as "Requirements as to mode of acceptance, payment or repayment in certain cases to Counteract Evasion of Tax."'. It then applied Hindustan Steel Ltd v. State of Orissa (83 ITR 26) for the proposition that penalty may not be imposed where there is a technical or venial breach of the provisions of the Act (para 12). It set out lexicon meanings of 'good cause' and 'sufficient cause' — the latter implying 'no negligence nor inaction nor want of bona fides on the part of the party' (para 13) — and listed four High Court decisions on good and sufficient cause (para 14). It then extracted at length the Guwahati Bench decision in Addl. CIT v. Smt. Prahati Baruah (ITA No. 418/Guwahati/1998), which had held on s.269T that where the identity of the payee is known to the Department and the genuineness of the transaction is not in doubt, the breach cannot be held deliberate and is at most a technical default (para 15). On that basis the Tribunal concluded at para 16.
Hence, keeping in view, the entire facts and peculiar circumstances of the case, we hold that no penalty is leviable in this case.
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Handle my notice → Ask a CA on WhatsAppOn these facts the Tribunal deleted the s.271DA penalty, holding that where a customer bought several genuinely different items and separate invoices were raised for them, the breach was at most technical or venial and Hindustan Steel applied. But read the order for what it does not say: it never identifies which of the three limbs of s.269ST the Department invoked, and it does not deal with the 'in a day' limb, which aggregates everything received from one person in one day irrespective of how many bills were raised. This was decided by the ITAT (Kul Bharat, Judicial Member and Dr. B.R.R. Kumar, Accountant Member) and bears on section 271DA, section 269ST, section 271D of the Income Tax Act 1961. It is reported as ITA No. 2561/Del/2022; Assessment Year 2018-19; Income Tax Appellate Tribunal, Delhi Bench 'H'. This is the commonest s.269ST charge in retail and it is almost always framed loosely. Section 269ST bars receiving Rs 2,00,000 or more from a person (a) in aggregate in a day, (b) in respect of a single transaction, and (c) in respect of transactions relating to one event or occasion. Bill-splitting is answered by limb (a), not by limb (b), so an assessee who argues only that the invoices were for 'different items' is answering the wrong limb. This order is useful because the Tribunal accepted the different-items explanation, but it is a thin authority: one of the invoices in the table reproduced in the order is itself Rs 11,53,000, which engages the single-transaction limb on its own, and the order does not address that. Use it as a reasonable-cause precedent, not as a proposition that separate invoices defeat s.269ST. If it applies to you, the first step is this: Make the Department state in writing which limb of s.269ST it relies on — 'in a day', 'single transaction', or 'one event or occasion' — before you answer the show-cause notice.
A search under s.132A was conducted on 29 May 2018 on Shri Rishi Kishan Mehra and Shantanu Mehra, directors of the assessee company. Incriminating documents relating to the assessee were found and seized. The Assessing Officer sent a proposal for penalty to the Addl. CIT, Central Range-1, New Delhi, who on examining the impounded documents and the assessment order recorded that the company had violated s.269ST by receiving Rs 2,00,000 or more in cash from single persons 'by splitting the invoices against sale of goods at its stores'. The CIT(A) deleted the penalty so far as it related to transactions through the bank but confirmed it for the cash transactions, holding that the assessee had issued two bills to the same customer bifurcating each below Rs 2,00,000, that the purpose of bifurcation was obvious, and that no person issues two bills to the same customer for two different items. The Tribunal reproduced a table of fourteen invoices covering six customers, in which several bills of the same date were raised on the same customer — five bills on Anubhav Gupta dated 23.08.2017 (Rs 1,55,066, Rs 34,000, Rs 80,500, Rs 22,800 and Rs 22,000), two on Nisha Bhalla dated 19.12.2017, two on Rohan Kiara dated 10.11.2017 (Rs 11,53,000 and Rs 79,000), two on Fahainda Islam dated 31.12.2017 and two on Nitant Khanna dated 27.12.2017. One customer, Roopakshi Suri, appears in the table with a single invoice of Rs 2,30,000 dated 03.11.2017 and no second bill. The goods were wedding wear — sherwani kurta churidar, gowns, sarees, shoes and the like. The matter was decided on 2024-04-02 by the ITAT (Kul Bharat, Judicial Member and Dr. B.R.R. Kumar, Accountant Member). On those facts the ITAT held as follows. The appeal was allowed and the penalty under s.271DA was deleted. The Tribunal recorded at para 9 that the items purchased were marriage dresses and of different items, and at para 16 that keeping in view the entire facts and peculiar circumstances of the case no penalty was leviable.
The Tribunal set out the legislative intention behind s.269ST, noting that the Finance Act 2017 introduced ss.269ST and 271DA to curb black money by discouraging cash transactions, and reproduced, inside that quoted legislative-intention material at para 11, the observation that 'Chapter XX-B which contains the sections 269SS/T/ST, is titled as "Requirements as to mode of acceptance, payment or repayment in certain cases to Counteract Evasion of Tax."'. It then applied Hindustan Steel Ltd v. State of Orissa (83 ITR 26) for the proposition that penalty may not be imposed where there is a technical or venial breach of the provisions of the Act (para 12). It set out lexicon meanings of 'good cause' and 'sufficient cause' — the latter implying 'no negligence nor inaction nor want of bona fides on the part of the party' (para 13) — and listed four High Court decisions on good and sufficient cause (para 14). It then extracted at length the Guwahati Bench decision in Addl. CIT v. Smt. Prahati Baruah (ITA No. 418/Guwahati/1998), which had held on s.269T that where the identity of the payee is known to the Department and the genuineness of the transaction is not in doubt, the breach cannot be held deliberate and is at most a technical default (para 15). On that basis the Tribunal concluded at para 16. In the words reproduced by the source cited on this page: "Hence, keeping in view, the entire facts and peculiar circumstances of the case, we hold that no penalty is leviable in this case." The decision followed or applied Hindustan Steel Ltd. v. State of Orissa (83 ITR 26) — applied; Addl. CIT v. Smt. Prahati Baruah, ITA No. 418/Guwahati/1998 (ITAT Guwahati) — extracted and followed; CIT v. Mysore Fertilizer Co. 145 ITR 91 (Mad.); CIT v. Chembara Peak Estates Ltd. 183 ITR 471 (Ker.); CIT v. Jaipur Electro P. Ltd. 183 ITR 476 (Raj.); CIT v. Bhikaji Ramchandra 183 ITR 478 (Bom.) — cited on good and sufficient cause.
It was decided by the ITAT on 2024-04-02 and is reported as ITA No. 2561/Del/2022; Assessment Year 2018-19; Income Tax Appellate Tribunal, Delhi Bench 'H'. Binding on the AO and CIT(A) within the Tribunal's jurisdiction. Persuasive elsewhere. A Tribunal decision binds the assessing officer and the Commissioner (Appeals) within that Tribunal's jurisdiction, and is persuasive before other benches. It is not binding on a High Court, and a contrary co-ordinate bench decision will be argued against you, so check whether the point has been taken the other way before you build a reply around it. On section 271DA, section 269ST, section 271D, the practical question is whether the facts of your own notice match the facts of this case closely enough for the same rule to apply.
It helps the taxpayer. The appeal was allowed and the penalty under s.271DA was deleted. The Tribunal recorded at para 9 that the items purchased were marriage dresses and of different items, and at para 16 that keeping in view the entire facts and peculiar circumstances of the case no penalty was leviable. It arises in Cash Transaction Limits, Penalty and Evidence & Burden of Proof matters, on section 271DA, section 269ST, section 271D of the Income Tax Act 1961, and was decided by Kul Bharat, Judicial Member and Dr. B.R.R. Kumar, Accountant Member. Before relying on it, read the source linked on this page and check whether it has since been distinguished, overruled or overtaken by an amendment to the Income Tax Act. In practice the steps that follow from it are these. Tabulate every receipt from the person by date, invoice and mode, then test the day-wise aggregate separately from the invoice-wise figure; the two limbs give different answers. Where the aggregate in a day does cross Rs 2,00,000, do not argue that separate bills cure it — go to the proviso to s.271DA and prove good and sufficient reasons on the specific facts. Keep the delivery notes, measurement slips or order forms that show the items were genuinely distinct purchases and not one order artificially broken up. Check whether the Joint Commissioner or Addl. CIT (not the Assessing Officer) passed the penalty order — s.271DA(2) reserves the power to the Joint Commissioner.
Validity check could not be completed. Validity check could not be completed. I did not locate any later decision following, distinguishing or doubting this order, and I did not check whether the Revenue appealed. The reasoning is short and does not engage the 'in a day' limb of s.269ST, so a later bench could readily distinguish it; do not present it as settling that bill-splitting is outside the section. No source could be cited for that finding. Checking whether an authority still stands matters as much as knowing what it held: a decision may be overruled on one point and survive on another, or the provision it interprets may have been amended since. Read the source and the editor's note on this page before relying on it in a reply to an Assessing Officer or in an appeal.
The scan is poor and the text is broken by OCR spacing throughout. Para 3 describes the order as one 'u/s 271D' although the grounds, para 10 and the rest of the order are on s.271DA; treat that as a slip. The penalty figures appear in the ground of appeal reproduced at para 2: the Assessing Officer levied Rs.25,78,300/- under s.271DA and the CIT(A) restricted it to Rs.12,60,300/-. The order nowhere identifies which limb of s.269ST was invoked, and the largest invoice in the table at para 8 (Rs 11,53,000, Rohan Kiara, 10.11.2017) would on its face cross the threshold as a single transaction, which the Tribunal does not discuss. The four High Court decisions listed at para 14 are cited by name and citation only, with no discussion. Two rows of the table at para 8 exceed Rs 2,00,000 on their own: serial 8 (Rohan Kiara, 10.11.2017, Rs 11,53,000) and serial 12 (Roopakshi Suri, Gown, 03.11.2017, Rs 2,30,000). Serial 12 is a single invoice to a customer with no second bill at all, so on that row there was no bill-splitting to explain; the Tribunal does not discuss it. This library shows the verification state of every entry openly. This entry has not yet been read in full by a chartered accountant. The summary reflects the sources listed on this page. Read the source before you rely on it in a reply to an Assessing Officer or in an appeal before the Commissioner (Appeals) or the Income Tax Appellate Tribunal.
The appeal was allowed and the penalty under s.271DA was deleted. The Tribunal recorded at para 9 that the items purchased were marriage dresses and of different items, and at para 16 that keeping in view the entire facts and peculiar circumstances of the case no penalty was leviable.
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You took a cash loan and now face penalty equal to the whole amount. Is there any relief?
Money moves both ways between me and my company on a current account. Is that a loan under 269SS?
The liability was created by a journal entry and no money moved. Does 269SS still apply?
I took a cash loan from my father-in-law. Can they levy 271D on a genuine family transaction?