ARYANPARV REALTY LLP,AHMEDABAD vs. ITO WARD 3 3 1, AHMEDABAD

ITA 910/AHD/2026Status: DisposedITAT Ahmedabad14 October 2026AY 2022-235 pages
AI SummaryAllowed

What did the Tribunal hold?

The Tribunal held that the penalty under Section 271DA of the Income Tax Act was not justified. The issue was whether the cash contributions made by the partner on different dates attracted the provisions of Section 269ST, thereby warranting the penalty. Section 269ST prohibits the receipt of Rs. 2,00,000/- or more otherwise than through prescribed banking or electronic modes, in aggregate from a person in a single day, in respect of a single transaction, or in respect of transactions relating to one event or occasion. The penalty of Rs. 2,08,000/- was imposed by aggregating two cash contributions of Rs. 1,99,000/- and Rs. 9,000/- received on November 1, 2021, and November 16, 2021, respectively. The Tribunal noted that these two cash contributions were received on different dates, separated by fifteen days, and neither individually reached the Rs. 2,00,000/- threshold. Crucially, the Tribunal found no material to establish that these two cash receipts represented amounts received in respect of a single transaction or transactions relating to one event or occasion, as required by Section 269ST. The mere fact that both amounts were contributed by the same partner towards the firm's capital did not, by itself, establish a contravention of Section 269ST. Therefore, the aggregation of the two cash contributions was not sustainable. The penalty order was cancelled, and the assessee's appeal was allowed.

What were the facts?

The assessee, Aryanparv Realty LLP, filed its return of income for Assessment Year 2022-23 declaring Rs. 6,000/-. The Assessing Officer (AO) initiated penalty proceedings under Section 271DA of the Income Tax Act, 1961, after observing that the assessee received Rs. 2,08,000/- in cash from Shri Naimish Yadukant Patel, a partner. This receipt was considered a contravention of Section 269ST. The AO completed the assessment under Section 143(3) r.w.s 144B on March 28, 2024, and subsequently passed a penalty order on September 27, 2024, imposing a penalty of Rs. 2,08,000/-. The assessee appealed to the National Faceless Appeal Centre (NFAC), Delhi (CIT(A)), which dismissed the appeal. The assessee is now in second appeal before the Income Tax Appellate Tribunal (ITAT).

What were the issues?

1. Whether the penalty of Rs. 2,08,000/- imposed under Section 271DA of the Income Tax Act, 1961, is legally sustainable? (Question of law) Assessee's Contention: The assessee argued that Section 271DA is attracted only if an amount of Rs. 2,00,000/- or more is received in cash in aggregate from a person in a single day, or in respect of a single transaction, or in respect of transactions relating to one event or occasion. The assessee submitted that Shri Naimish Yadukant Patel, a partner, introduced capital of Rs. 2,76,16,530/- during the year. A cash payment of Rs. 1,99,000/- was made on November 1, 2021, followed by an RTGS transfer of Rs. 25,53,653/- on November 2, 2021, and another cash payment of Rs. 9,000/- on November 16, 2021. The assessee contended that neither individual cash receipt met the Rs. 2,00,000/- threshold, and the two cash payments were made on different dates, separated by fifteen days, and did not constitute a single transaction or relate to one event or occasion. The identity of the partner and the source of funds were undisputed. Revenue's Contention: The Revenue supported the orders of the lower authorities.

Which sections of the Income-tax Act were involved?

Section 271DA,Section 269ST,Section 139(4),Section 143(3),Section 144B

AI-generated summary — verify with the full judgment below

Income Tax Appellate Tribunal, “SMC” BENCH, AHMEDABAD

Before: SHRI NARENDRA PRASAD SINHA & SHRI SANJAY KUMAR

For Appellant: Ms. Ishika Jain, AR
For Respondent: Ms. Kalpana Singh, Sr. DR
Hearing: 24.09.2026Pronounced: 14.10.2026

PER NARENDRA PRASAD SINHA, ACCOUNTANT MEMBER:

This appeal has been filed by the Assessee against the order of National Faceless Appeal Centre (NFAC), Delhi [hereinafter referred to as “CIT(A)”] dated 05.01.2026 for the Assessment Year (A.Y.) 2022-23 in the proceeding u/s 271DA of the Income Tax Act [hereinafter referred as “the Act”].

2.

The brief facts of the case are that the assessee had filed its return of income for A.Y. 2022-23 u/s. 139(4) of the Act declaring total income of Aryanparv Realty LLP Vs ITO, AY- 2020-21 2 Rs.6,000/-. The case of the assessee was selected for scrutiny to examine the high liabilities as compared to low income/rec

The order continues below.

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