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Facts
The assessee, Suryakiran Earthmovers Pvt. Ltd., received cash exceeding Rs. 2 lakhs from individual persons in single transactions, violating Section 269ST of the Income Tax Act, 1961. The assessee admitted the violation but contended that there were good and sufficient reasons for it under Section 271DA, which were not accepted by the CIT(Appeals).
Held
The tribunal set aside the order of the CIT(Appeals) and remanded the matter back, granting the assessee a final opportunity to explain the 'good and sufficient cause' as per the proviso to Section 271DA. The CIT(Appeals) was directed to adjudicate the matter on merits after considering the assessee's explanation.
Key Issues
The key legal issue was whether the assessee had 'good and sufficient reasons' for receiving cash exceeding Rs. 2 lakhs in violation of Section 269ST, thereby avoiding penalty under Section 271DA.
Sections Cited
Section 269ST, Section 271DA
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, RAIPUR BENCH “SMC”, RAIPUR
Before: SHRI PARTHA SARATHI CHAUDHURY
आदेश / ORDER
PER PARTHA SARATHI CHAUDHURY, JM
The present appeal preferred by the assessee emanates from the order of the Ld.CIT(Appeals)/NFAC, Delhi dated 05.02.2026 for the assessment year 2018-19 as per the grounds of appeal on record.
In this case, it is an admitted fact that there is violation of Section 269ST of the Income Tax Act, 1961 (for short ‘the Act’) and that the assessee had received cash exceeding to Rs.2 lakhs from individual persons in respect of single transaction. The same fact has been admitted by the Ld. Counsel which is evident in the written submission enumerated in the order of the Ld. CIT(Appeals)/NFAC at Page 12 & 13 and the same are extracted as follows:
Further, the Ld. Counsel for the assessee submitted that there is substantial transaction during the year, out of which, only in respect of 5 parties, violation of Section 269ST of the Act had taken place. It was submitted by the Ld. Counsel for the assessee that they had already explained good and sufficient reasons within the meaning of Section 271DA of the Act. However, such reasons did not find favour with the Ld. CIT(Appeals)/NFAC who had confirmed the findings of the A.O. However, a prayer has been made by the Ld. Counsel that in terms with welfare legislation, of which, Income Tax Act is part and parcel, an opportunity may be accorded to the assessee to explain before the Ld. CIT(Appeals)/NFAC good and sufficient reasons as per proviso to Section 271DA of the Act.
Per contra, the Ld. Sr. DR supported the findings of the Revenue authorities and stated that the fiscal statute has to be interpreted in strictest form and there cannot be any liberal interpretation allowed while adjudicating on the issues emanating from the Act.
Having heard the submissions of the parties herein, even without going into the merits of the matter, since a prayer has been made by the Ld. Counsel for the assessee to explain sufficient cause in terms with proviso to Section 271DA of the Act and keeping in view of the principles of natural justice as enshrined within the interpretation of welfare
6 Suryakiran Earthmovers Pvt. Ltd. Vs. DCIT, Circle-1(1), Raipur (C.G.)
Revenue will not be jeopardized if one final opportunity is provided to the assessee. In view thereof, I set-aside the order of the Ld. CIT(Appeals)/NFAC and remand the matter back to its file with a direction to the assessee shall explain good and sufficient cause in terms with proviso to Section 271DA of the Act and the Ld. CIT(Appeals)/NFAC shall adjudicate the matter on merits as per law.
As per the aforesaid terms, grounds of appeal of the assessee stands allowed for statistical purposes.
In the result, appeal of the assessee is allowed for statistical purposes.
Order pronounced in open court on 6th day of March, 2026.