Section 271DA

Section 271DA — the law in short

What the courts have decided on section 271DA, in one screen. Read this first; open an entry when you need the facts, the reasoning and the source.

• RBANMS Educational Institution v B. Gunashekar Supreme CourtHelps department
  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?
  Yes, but on a different footing. The Supreme Court confirmed that under section 269ST, with the penalty in section 271DA, action is to be taken on the recipient - and said in the same breath that there is also an onus on the person paying to disclose the source of such large cash. It then built the machinery by which such a payment reaches the department: a civil court before which a suit claims payment of Rs 2,00,000 or more in cash must intimate the jurisdictional Income-tax Department, and a Sub-Registrar before whom a document reciting cash consideration of that amount is presented for registration must do the same.
• JCIT v Ganesh Agarwal High CourtCuts both ways
  The Assessing Officer sent a proposal to the Joint Commissioner for penalty on my cash receipts. Does the six month limitation run from that proposal or from the notice the Joint Commissioner later issued?
  From the notice. A Division Bench of the Karnataka High Court held that penalty proceedings under section 271DA begin only when the Joint Commissioner issues the notice under section 274, not when the Assessing Officer forwards a proposal, so the six months in section 275(1)(c) run from the end of the month of that notice. But the Court did not leave the Joint Commissioner free to sit on the proposal: it held he must issue the section 274 notice within six months of the end of the month in which he receives it, failing which the proceedings are time-barred. On that footing four of the ten penalty orders fell and six were restored.
• Delta Farm Services v ITO ITATHelps taxpayer
  I sell tractors to farmers who pay in cash instalments, and the officer has levied penalty equal to the whole of the cash received for breaching the two lakh limit. Is there any defence?
  Yes, reasonable cause. The Delhi Tribunal deleted the penalty of Rs 4,69,52,797 under section 271DA. The officer never doubted the genuineness of the cash sales and never alleged that unaccounted money was being routed back. The firm had identified every buyer with Aadhaar, land records and Form 60, accounted for every receipt and filed its statements of specified financial transactions. Section 269ST had come in from 1 April 2017 and this was the first year, and the firm's belief that cash below Rs 2 lakh could be taken at any one time was plausible on the language of the section. Penalty is quasi-criminal and is not for a technical or venial breach.
• CBDT Circular 22/2017 CBDT Circulars & InstructionsHelps taxpayerValidity unconfirmed
  We take loan repayments in cash instalments. Do the instalments add up against the two lakh limit?
  Not for NBFCs and HFCs. The Board has clarified that each instalment of loan repayment is a single transaction, so instalments received against one loan are not aggregated when testing the two lakh rupee ceiling in s.269ST.

Listed strongest first: Supreme Court, then High Court, then Tribunal, then CBDT. Nothing here has yet been read in full by a chartered accountant — open an entry to see where it came from.