I sold a plot and took part of the price in cash — a token advance months earlier and the balance handed over at the sub-registrar's office. Is that s.269SS or s.269ST, what is the penalty, and is the buyer exposed too?
It depends which receipt you are talking about, and the two halves of the same sale are not defended together. The token advance is squarely a 'specified sum' under s.269SS and attracts s.271D. Whether the balance handed over at registration is also a specified sum is contested: a Tribunal line reads the specified sum limb as confined to advances and puts the consideration received at registration under s.269ST with its own penalty under s.271DA. Both penalties fall on the person who receives the cash, not on the buyer who pays it.
Take the statutory text first, because the department's older pages for these sections are still in circulation and they do not carry the 2015 amendment at all. The current departmental text of s.269SS reads: "No person shall take or accept from any other person (herein referred to as the depositor), any loan or deposit or any specified sum, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account or through such other electronic mode as may be prescribed...", and its Explanation defines the term: "'specified sum' means 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." That page's footnotes run to the Finance Act, 2023. An older version of the same page, still reachable, prints only "any loan or deposit" with no specified sum at all and no footnote later than 1987; a reply built on that older text will be answered in one line.
Section 269ST is the general receipt provision: "No person shall receive an amount of two lakh rupees or more— (a) in aggregate from a person in a day; or (b) in respect of a single transaction; or (c) in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account". It was inserted with effect from 1 April 2017 and it expressly does not apply to a transaction already covered by s.269SS. That carve-out is what makes the classification question decide which penalty is in play rather than adding a second one.
On the classification, the Tribunal is split and the split is about the words "whether as advance or otherwise". One line reads them narrowly. In Arati Saraf v. Jt. CIT (2025) 131 ITR 337 (Cuttack)(Trib.), assessment year 2017-18, the entire consideration was received in cash at the execution and registration of the sale deed; the digest note records the holding as "Receipt of entire sale consideration in cash at the time of execution and registration of sale deed does not violate section 269SS, as the expression 'specified sum' applies only to advances received in relation to transfer of immovable property", that the expression "covers only advances received in relation to transfer of immovable property and not the entire sale consideration", and that "Such transactions are governed by section 269ST and not section 269SS"; the s.271D penalty was deleted. A Chennai Tribunal order reported on a commentary site reaches the same result on the same reasoning, recorded there as holding that the provision "will not apply to the transaction that happens at the time of final payment at the time of registration of sale deed and payment is made before sub-registrar", the reasoning being that the specified sum limb was aimed at cash advances in real estate rather than at the final consideration; that report does not state the cause title, the appeal number or the date, so it is a second sighting of the reasoning rather than a second decision that can be cited. This library already holds a Delhi Tribunal decision going further, that s.269SS does not deal with sale consideration at all, and records it as unverified and contested.
What this means on a file with two receipts is that they must be answered separately. The token advance taken before the sale is a sum of money receivable in relation to the transfer of an immovable property and is caught by the specified sum limb on any reading, including the narrow one — the narrow reading is the reading that catches it. The consideration handed over at registration is where the argument lives, and if the argument succeeds the department's answer is not that there is no penalty but that the right penalty was s.271DA. Pleading the two as one sum forfeits the good half of the case.
The defences are not the same either, and this is the asymmetry to plan around. Section 273B, which excuses a failure where the person proves reasonable cause, names s.271D and s.271E. The fullest text of s.273B reachable on the department's site lists s.271, s.271A, s.271AA, s.271B, s.271BA, s.271BB, s.271C, s.271CA, s.271D, s.271E, s.271F, s.271FA, s.271FB, s.271G, s.272A, s.272AA, s.272B, s.272BB, s.272BBB and s.273, and does not name s.271DA; but that page is itself a snapshot that stops well short of the current section, so its silence is a pointer rather than proof. What is current is s.271DA itself: "(1) If a person receives any sum in contravention of the provisions of section 269ST, he shall be liable to pay, by way of penalty, a sum equal to the amount of such receipt: Provided that no penalty shall be imposable if such person proves that there were good and sufficient reasons for the contravention. (2) Any penalty imposable under sub-section (1) shall be imposed by the Joint Commissioner." The section carries its own escape clause. That is the structural reason to expect that the s.273B route was never extended to it: the legislature gave this penalty a defence of its own instead. Whether "good and sufficient reasons" is a harder test than "reasonable cause" is a question no decision that could be read answers; what the orders show is that it is a real defence and that it is being allowed.
On how s.271DA is actually running, the Tribunal has been deleting these penalties where the receipts were disclosed and the payers identified. In Finesse International Design P. Ltd. v. Additional CIT (2024) 111 ITR 37 (SN) (Delhi)(Trib.), assessment year 2018-19, the note records the point as "Transactions in cash exceeding prescribed limit-Bifurcating bills to each customer-Technical or venial breach-Penalty is deleted", the Tribunal treating the sections as aimed at discouraging cash and promoting digital payment and finding no penalty warranted on those facts. In Delta Farm Services v. ITO (2025) 234 TTJ 746 / 175 taxmann.com 61 (Delhi)(Trib.) the note records that penalty under s.271DA for contravention of s.269ST "is not leviable" where the identity of the customers buying tractors was proved; a commentary site's report of what appears to be the same matter records the assessee as a tractor dealer selling to agriculturists, the show cause having been built on its own Form 61A reporting, and the Tribunal finding "bona fide reasons to receive cash over and above Rs. 2 lakhs" and "reasonable cause in accepting cash", with the observation that "Penalty cannot be levied for the technical and venial breach." The practical lesson is that the defence is built out of who the payer was, what was disclosed, and why currency was unavoidable — not out of the genuineness of the sale, which is assumed.
On the buyer. Both sections and both penalties are written against the receiver. Section 269SS binds a person who takes or accepts; s.269ST binds a person who receives; s.271D charges the person who takes or accepts and s.271DA the person who receives. The buyer who hands over currency for a plot is not the person penalised by any of them. His exposure lies elsewhere and under different heads — explaining the source of the money under the s.69 family, the withholding obligation on a purchase of immovable property where the consideration crosses the statutory limit, and the reporting and quotation requirements that attach to a registered transfer. Those are separate questions with separate answers, and this library holds notes on the first and the second. What the buyer's position does not give the seller is comfort: the department does not need to have acted against the buyer to penalise the seller.
On the sub-registrar's report of the cash, treat it as departmental material like any other. If an addition or a penalty is founded on a report or a return filed by the registering authority, the assessee is entitled to be shown it. The Supreme Court authority in this library on estimates founded on undisclosed departmental material, on a document obtained behind the assessee's back, and on the right to cross-examine, is the answer where the report is used but never produced.
The penalty is the whole of the cash, not the tax on it, and the two receipts on one sale carry different risk. Getting the classification right decides which section, which penalty, which defence and which limitation applies; getting it wrong loses the half of the case that could have been won. It also tells the practitioner what the department's fallback will be when the s.271D notice fails, so the reply can be written against both.
You took a cash loan and now face penalty equal to the whole amount. Is there any relief?
The assessment in which the s.271E satisfaction was recorded has been set aside. Can the penalty stand?
Must penalty be imposed just because the law permits it?
The section 269ST penalty falls on the person who receives the cash. If I am the buyer paying cash for property, am I exposed at all?
My agents keep the difference between the price they charge customers and the net price they pay me — do I have to deduct TDS on money that never passed through my hands?
My s.220(6) application against a penalty demand was rejected only because I filed no evidence of financial hardship. Is that a good enough reason?
We paid Rs 1.5 crore in cash under an agreement. The other side says s.269ST makes the agreement void and our recovery suit is not maintainable. Is it?
Our audit report was late because the statutory auditor was late. Can the officer still levy the s.271B penalty?
Every page in this library links to what it was written from, so you can check it rather than take our word for it.