Asst. Director of Inspection (Investigation) v. Kum. A.B. Shanthi

255 ITR 258Supreme Court of India2002#1886 most cited

What is Asst. Director of Inspection (Investigation) v. Kum. A.B. Shanthi authority for?

The Supreme Court upholds the constitutional validity of Section 269SS of the Income Tax Act, 1961, which prohibits certain cash loans and deposits. This ruling is foundational for penalties under Section 271D and considering exemptions under Section 273B.

61

judgments rely on this decision, according to BharatTax’s citation analysis of 292,668 Indian tax judgments — from 2012 to 2026.

Also referred to as

Asst. Director of Inspection (Investigation) v. Kum. A.B. Shanthi · A.B. Shanthi SC · constitutional validity Section 269SS · penalty under Section 271D · Section 269SS Income Tax Act · Section 271D penalty cash transaction · Section 273B penalty waiver · validity of provisions 269SS · taking cash loan penalty · accepting cash deposit penalty · 255 ITR 258

Sections most often in play

Section 269SSSection 271DSection 273BSection 143(3)Section 271ESection 153ASection 269TSection 2(14)

Issues it is cited on

penalty under section 271dsection 269ssection 269tsection 271bbsection 272aasection 271fbpenalty under section 271esection 271esection 273section 272bbsection 269sssection 271ca

Judgments citing Asst. Director of Inspection (Investigation) v. Kum. A.B. Shanthi

NEETABEN PATEL,VADODARA vs. ITO, WARD-1(2)(2), VADODARA

In the result, the appeals filed by the Assessee are hereby allowed

ITA 1794/AHD/2025[2011-12]Status: DisposedITAT Ahmedabad17 Feb 2026AY 2011-12
Section 148Section 269SSection 271DSection 271E

…o the relatives and friends, which in our considered view is a reasonable cause within the meaning of Section 273B of the Act. 7.2 Their Lordships of the Supreme Court in the case of Assistant Director of Inspection v. Kum. A.B. Shanthi (2002) 122 Taxman 574/255 ITR 258 (SC) while upholding the constitutional validity of Sections 269SS and 271D of the Act held that notwithstanding anything contained in the provisions of Section 271D. no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision, if he proves that there was reasonable cause for…

NEETABEN PATEL,VADODARA vs. ITO, WARD-1(2)(2), VADODARA

In the result, the appeals filed by the Assessee are hereby allowed

ITA 1793/AHD/2025[2011-12]Status: DisposedITAT Ahmedabad17 Feb 2026AY 2011-12

Bench: DR. BRR Kumar (Vice President), Shri T. R. Senthil Kumar (Judicial Member)

Section 148Section 269SSection 271DSection 271E

…o the relatives and friends, which in our considered view is a reasonable cause within the meaning of Section 273B of the Act. 7.2 Their Lordships of the Supreme Court in the case of Assistant Director of Inspection v. Kum. A.B. Shanthi (2002) 122 Taxman 574/255 ITR 258 (SC) while upholding the constitutional validity of Sections 269SS and 271D of the Act held that notwithstanding anything contained in the provisions of Section 271D. no penalty shall be imposable on the person or the assessee, as the case may be, for any failure referred to in the said provision, if he proves that there was reasonable cause for…

BOMMARABETTU MADHU SUDHANA ACHARYA ,UDUPI vs. INCOME TAX OFFICER, WARD-1 AND TPS, UDUPI

In the result, appeal filed by the assessee is allowed

ITA 937/BANG/2025[2016-17]Status: DisposedITAT Bangalore12 Feb 2026AY 2016-17

Bench: Shri Laxmi Prasad Sahu & Shri Keshav Dubeyassessment Year: 2016-17

For Appellant: Ms. Pratibha R., A.RFor Respondent: Sri Balusamy N., D.R
Section 143(1)Section 143(2)Section 143(3)Section 250Section 269SSection 271DSection 274Section 54E

…his submission, the learned Senior Counsel relied upon a decision of Gauhati High Court in CIT v. Bhagwati Prasad Bajoria (HUF)[2003] 263 ITR 487/133 Taxman 426, Chamundi Granites (P.) Ltd. v. Dy. CIT/Asstt. Director of Inspection v. Kum. A.B. Shanthi [2002] 255 ITR 258/122 Taxman 574 (SC)and M. Janardhana Rao v. Jt. CIT [2005] 273 ITR 50/142 Taxman 722 (SC). Bommarabettu Madhusudhana Acharya, Bengaluru Page 7 of 13 9. In order to appreciate the submission of the learned counsel for the parties, it would be appropriate to refer to a few provisions which will have a bearing to the issue involved in the present ca…

HARI KRISHNA LEELA PRASAD PALADUGU,HYDERABAD vs. INCOME TAX OFFICER, WARD - 6(1), HYDERABAD

ITA 798/HYD/2025[2017-18]Status: DisposedITAT Hyderabad10 Dec 2025AY 2017-18

Bench: SHRI G. MANJUNATHA, HON’BLE (Accountant Member), SHRI RAVISH SOOD, HON’BLE (Judicial Member)

Section 143(1)Section 143(3)Section 269SSection 271DSection 274

…1961, and consequently, penalty under Section 271D of the Act, cannot be levied. The assessee also relied upon certain judicial precedents, including the decision of the Hon’ble Apex Court in the case of Assistant Director of Income Tax Vs. Kumar A.B. Shanti (255 ITR 258) and the decision of the Hon’ble Gujarat High Court in the case of CIT Vs. Bombay Conductors and Electricals Ltd. (301 ITR 328). 3. The A.O., after considering the submissions of the assessee and also taking note of the fact that, the assessee has violated provisions of Section 269SS of the Act, and more particularly, the amended provisions of t…

MAHESHWARAPPA MUNIRAMU,BANGALORE vs. JOINT COMMISSIONER OF INCOME TAX, RANGE 2(2), BENGALURU, BENGALURU

In the result, appeal filed by the assessee is allowed

ITA 757/BANG/2025[2017-18]Status: DisposedITAT Bangalore26 Sept 2025AY 2017-18

Bench: Shri Prashant Maharishi & Shri Keshav Dubeyassessment Year : 2017-18 Maheshwarappa Muniramu #4261/17, 2Nd Cross, 20Th Main Subramanya Nagar Jcit Vs. Bengaluru 560 021 Range 2(2) Bangalore Pan No :Aempm8290C Appellant Respondent Appellant By : Sri Nagaraj K. H., Ca Respondent By : Sri Subramaniam, Jcit Dr Date Of Hearing : 30.06.2025 Date Of Pronouncement : 26.09.2025

For Appellant: Sri Nagaraj K. H., CAFor Respondent: Sri Subramaniam, JCIT DR
Section 143(3)Section 194ISection 244ASection 250Section 269SSection 271DSection 274

…his submission, the learned Senior Counsel relied upon a decision of Gauhati High Court in CIT v. Bhagwati Prasad Bajoria (HUF)[2003] 263 ITR 487/133 Taxman 426, Chamundi Granites (P.) Ltd. v. Dy. CIT/Asstt. Director of Inspection v. Kum. A.B. Shanthi [2002] 255 ITR 258/122 Taxman 574 (SC)and M. Janardhana Rao v. Jt. CIT [2005] 273 ITR 50/142 Taxman 722 (SC). 9. In order to appreciate the submission of the learned counsel for the parties, it would be appropriate to refer to a few provisions which will have a bearing to the issue involved in the present case, namely, Sections 269SS, 271D and Section 273B of the A…

NIMMATOORI RAMESH BABU,HYDERABAD vs. ACIT., CENTRAL CIRCLE 2(4), HYDERABAD

In the result, appeal ITA

ITA 597/HYD/2025[2017-18]Status: DisposedITAT Hyderabad12 Sept 2025AY 2017-18

Bench: Shri Manjunatha G & Shri Ravish Sood

For Respondent: Sri Posu Babu Alli, Sr. AR
Section 143(3)Section 269Section 271Section 271DSection 271D(2)Section 273BSection 4

…rws 153A, the same was treated as assessee's income, which amount to two divergent inferences by the AO on one transaction. e. The Ld. CIT(A) erred in relying on Supreme Court Decision in the case of Asst. Director of Inspection vs., Kum. A.B. Shanthi (2002) 255 ITR 258 (S.C) for dismissing ground nos.11,12,13 & 15 taken before him. f. The Ld. CIT(A) ought to have appreciated that he has misquoted the Supreme Court Judgment which is not relevant to the grounds of appeal taken before him. g. The Ld. CIT(A) ought to have appreciated that the Supreme Court decision in the case of Asst. Director of Inspection vs., K…

LATE NIMMATOORI RAJABABU L/R BY ANUDEEP NIMMATOORI,HYDERABAD vs. ACIT., CENTRAL CIRCLE 2(4), HYDERABAD

In the result, appeal ITA

ITA 596/HYD/2025[2017-18]Status: DisposedITAT Hyderabad12 Sept 2025AY 2017-18

Bench: Shri Manjunatha G & Shri Ravish Sood

For Respondent: Sri Posu Babu Alli, Sr. AR
Section 143(3)Section 269Section 271Section 271DSection 271D(2)Section 273BSection 4

…rws 153A, the same was treated as assessee's income, which amount to two divergent inferences by the AO on one transaction. e. The Ld. CIT(A) erred in relying on Supreme Court Decision in the case of Asst. Director of Inspection vs., Kum. A.B. Shanthi (2002) 255 ITR 258 (S.C) for dismissing ground nos.11,12,13 & 15 taken before him. f. The Ld. CIT(A) ought to have appreciated that he has misquoted the Supreme Court Judgment which is not relevant to the grounds of appeal taken before him. g. The Ld. CIT(A) ought to have appreciated that the Supreme Court decision in the case of Asst. Director of Inspection vs., K…

LATE NIMMATOORI RAJA BABU,HYDERABAD vs. ACIT., CENTRAL CIRCLE 2(4), HYDERABAD

ITA 594/HYD/2025[2016-17]Status: DisposedITAT Hyderabad12 Sept 2025AY 2016-17

Bench: Shri Manjunatha G & Shri Ravish Sood

For Respondent: Sri Posu Babu Alli, Sr. AR
Section 143(3)Section 269Section 271Section 271DSection 271D(2)Section 273B

…rws 153A, the same was treated as assessee's income, which amount to two divergent inferences by the AO on one transaction. e. The Ld. CIT(A) erred in relying on Supreme Court Decision in the case of Asst. Director of Inspection vs., Kum. A.B. Shanthi (2002) 255 ITR 258 (S.C) for dismissing ground nos.11,12,13 & 15 taken before him. f. The Ld. CIT(A) ought to have appreciated that he has misquoted the Supreme Court Judgment which is not relevant to the grounds of appeal taken before him. g. The Ld. CIT(A) ought to have appreciated that the Supreme Court decision in the case of Asst. Director of Inspection vs., K…

NIMMATOORI SULOCHANA,HYDERABAD vs. ACIT., CENTRAL CIRCLE 2(4), HYDERABAD

In the result, appeal of the assessee is allowed

ITA 603/HYD/2025[2017-18]Status: DisposedITAT Hyderabad10 Sept 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA, P. Murali Mohan RaoFor Respondent: Sri Siva Prasad SV, Sr. AR
Section 143(3)Section 269Section 271Section 271DSection 271D(2)Section 273B

…rws 153A, the same was treated as assessee's income, which amount to two divergent inferences by the AO on one transaction. e. The Ld. CIT(A) erred in relying on Supreme Court Decision in the case of Asst. Director of Inspection vs., Kum. A.B. Shanthi (2002) 255 ITR 258 (S.C) for dismissing ground nos. 11,12,13 & 15 taken before him. f. The Ld. CIT(A) ought to have appreciated that he has misquoted the Supreme Court Judgment which is not relevant to the grounds of appeal taken before him. g. The Ld. CIT(A) ought to have appreciated that the Supreme Court decision in the case of Asst. Director of Inspection vs.,…

NIMMATOORI YASHODA,HYDERABAD vs. DCIT., CENTRAL CIRCLE 2(4), HYDERABAD

In the result, appeal of the assessee is allowed

ITA 602/HYD/2025[2017-18]Status: DisposedITAT Hyderabad10 Sept 2025AY 2017-18

Bench: Shri Vijay Pal Rao & Shri Manjunatha G

For Appellant: CA, P. Murali Mohan RaoFor Respondent: Sri Siva Prasad SV, Sr. AR
Section 143(3)Section 269Section 271Section 271DSection 271D(2)Section 273B

…rws 153A, the same was treated as assessee's income, which amount to two divergent inferences by the AO on one transaction. e. The Ld. CIT(A) erred in relying on Supreme Court Decision in the case of Asst. Director of Inspection vs., Kum. A.B. Shanthi (2002) 255 ITR 258 (S.C) for dismissing ground nos. 11,12,13 & 15 taken before him. f. The Ld. CIT(A) ought to have appreciated that he has misquoted the Supreme Court Judgment which is not relevant to the grounds of appeal taken before him. g. The Ld. CIT(A) ought to have appreciated that the Supreme Court decision in the case of Asst. Director of Inspection vs.,…

THE NADAPURAM SERVICE COOPERATIVE BANK LIMITED,KOZHIKODE vs. JCIT, RANGE 2, KOZHIKODE

In the result, the appeal filed by the assessee stands dismissed

ITA 957/COCH/2024[2015-16]Status: DisposedITAT Cochin14 May 2025AY 2015-16

Bench: Shri Inturi Rama Rao & Shri Sandeep Singh Karhail

For Appellant: Sri.V.S.Narayanan, CAFor Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 143(3)Section 269SSection 269TSection 271DSection 274

…o.957/Coch/2024. The Nadapuram SC.B Limited. reasonable cause for accepting the deposits in cash from the members, and therefore, no penalty can be levied in view of the decision of the Hon’ble Supreme Court in the case of ACIT (Inv.) v. Kum.A.B.Shanti (2002) 255 ITR 258. However, the learned NFAC after referring to the judgment of the Hon’ble Madras High Court in the case of Vasan Healthcare Private Limited 103 taxman 26 (Mad.) and other judgments of High Courts held that in the absence of any reasonable cause for accepting the deposits or loans in cash, the levy of penalty is justified u/s.271D of the Act. 5.…

SHRI PRAKASH JIWANDAS WANJARI,NAGPUR vs. JOINT COMMISSIONER OF INCOME TAX, NAGPUR

In the result, we are of the considered view that the case on hand does not warrant levy of penalty under Section 271D of the Act

ITA 232/NAG/2022[2011-12]Status: DisposedITAT Nagpur25 Oct 2024AY 2011-12

Bench: Shri V. Durga Rao & Shri K.M. Roy, Accountant, Member

For Appellant: Shri Mahavir AtalFor Respondent: Shri Abhay Y. Marathe
Section 143(3)Section 147Section 148Section 269SSection 271DSection 273ASection 80C

…fficer has not doubted the genuineness of the transaction and if no addition is made u/s 68 of the Act, penalty cannot be imposed u/s 271D of the Act. ii. Hon'ble Supreme Court in the case of Asst. Director of Inspection (Investigation) Vs. Kum. A.B. Shanthi (255 ITR 258)(SC) wherein it was held that "...that (1) if there was a genuine and bonafide transaction and (2) if for any reason the taxpayer could not get a loan or deposit by account payee cheque or demand draft for some bonafide reasons, the authority vested with the power to impose penalty has got discretionary power. The existence of a genuine or 6 Prak…

OTM JEWELLERY PRIVATE LIMITED,DELHI vs. ACIT, CENTRAL RANGE, MEERUT

In the result, the appeal of the assessee in ITA No

ITA 1135/DEL/2024[2013-14]Status: DisposedITAT Delhi23 Oct 2024AY 2013-14

Bench: Shri Kul Bharat & Shri Naveen Chandra

For Appellant: Shri Ankur Goel, AdvFor Respondent: Ms. Anupama Singla, Sr. DR
Section 132(1)Section 153CSection 269SSection 271DSection 273B

…IN THE INCOME TAX APPELLATE TRIBUNAL, DELHI ‘F’ BENCH, NEW DELHI BEFORE SHRI KUL BHARAT, JUDICIAL MEMBER, AND SHRI NAVEEN CHANDRA, ACCOUNTANT MEMBER ITA No. 1135/DEL/2024 [A.Y 2013-14] OTM Jewellery Pvt Ltd Vs. The A.C.I.T C-4/135, Safdarjung Development Area Central Range Hauz Khas, New Delhi Meerut PAN: AAACO 5115 F (Applicant) (Respondent) Assessee By : Shri Ankur Goel, Adv Department By : Ms. Anupama Singla, Sr. DR Date of Hearing : 15.10.2024 Date of Pronouncement : 23.10.2024 ORDER PER NAVEEN CHANDRA, ACCOUNTANT MEMBER:- This appeal by the assessee is preferred against the order of the ld. CI…

INDIRA GANDHI MEMORIAL TRUST,NELLIKUZHY, KOTHAMANGALAM vs. JOINT COMMISSIONER OF INCOME TAX(EXEMPTION), ERNAKULAM

In the result, both the appeals filed by the assessee are allowed

ITA 54/COCH/2024[2012-13]Status: DisposedITAT Cochin30 Sept 2024AY 2012-13

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Sri.P.T.Joy, CAFor Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 269SSection 271D

…as submitted a detailed reply to the CIT(Appeals), NFAC in response to the notice dated 28-11- 2023 during the first appellateproceedings, wherein reference was made to the case law Assistant Director of Inspection (Investigation) v. Kum. A.B. Shanthi, (2002) 255 ITR 258 (SC), where the Hon'ble apex courtheld that the legislature has given discretion to the authority in the matter of levy of penalty under Section 271D of the Act.The Hon'ble apex Court further held that where a reasonable cause exists for transactions covered under Section 269SS, the penalty shall not be imposed merely because it is lawful to do s…

INDIRA GANDHI MEMORIAL TRUST,NELLIKUZHY P.O vs. JOINT COMMISSIONER OF INCOME TAX (EXEMPTIONS), ERNAKULAM

In the result, both the appeals filed by the assessee are allowed

ITA 165/COCH/2024[2012-13]Status: DisposedITAT Cochin30 Sept 2024AY 2012-13

Bench: Shri Waseem Ahmed & Shri Soundararajan K

For Appellant: Sri.P.T.Joy, CAFor Respondent: Sri.Sanjit Kumar Das, CIT-DR
Section 269SSection 271D

…as submitted a detailed reply to the CIT(Appeals), NFAC in response to the notice dated 28-11- 2023 during the first appellateproceedings, wherein reference was made to the case law Assistant Director of Inspection (Investigation) v. Kum. A.B. Shanthi, (2002) 255 ITR 258 (SC), where the Hon'ble apex courtheld that the legislature has given discretion to the authority in the matter of levy of penalty under Section 271D of the Act.The Hon'ble apex Court further held that where a reasonable cause exists for transactions covered under Section 269SS, the penalty shall not be imposed merely because it is lawful to do s…

INCOMETAX OFFICER, KOZHIKODE vs. THE VENGERI SERVICE CO-OPERATIVE BANK LTD, KOZHIKODE

Appeals are hereby partly allowed

ITA 730/COCH/2023[2016-17]Status: DisposedITAT Cochin25 Sept 2024AY 2016-17

Bench: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: ------- None -------For Respondent: Shri Sanjit Kumar Das, CIT-DR
Section 269SSection 271D

…19, New Delhi dated 26.04.2023 has allowed the appeal in a similar case. Relevant extract is as follows: QUOTE "21. We do not agree with this rigid approach of the Ld. JCIT/CIT(A). In the context of constitutionality of the provisions in A ADIT vs. AB Shanthi 255 ITR 258 (SC) the Hon'ble Supreme Court observed that the object of introducing section 269SS is to ensure that ta taxpayer is not allowed to give false explanation for its unaccounted money, or if he has given some false entries in its accounts, he shall not escape by giving false explanation for the same. Provisions inserted to curb the rampant circulat…

INCOME TAX OFFICER,WARD 1,KALPETTA, KALPETTA vs. MULLANKOLLY SERVICE CO OPERATIVE BANK LTD, MULLANKOLLY

Appeals are hereby partly allowed

ITA 729/COCH/2023[2015-16]Status: DisposedITAT Cochin25 Sept 2024AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: Shri Adithya Unnikrishnan, CAFor Respondent: Shri Sanjit Kumar Das, CIT-DR
Section 269SSection 271D

…19, New Delhi dated 26.04.2023 has allowed the appeal in a similar case. Relevant extract is as follows: QUOTE "21. We do not agree with this rigid approach of the Ld. JCIT/CIT(A). In the context of constitutionality of the provisions in A ADIT vs. AB Shanthi 255 ITR 258 (SC) the Hon'ble Supreme Court observed that the object of introducing section 269SS is to ensure that ta taxpayer is not allowed to give false explanation for its unaccounted money, or if he has given some false entries in its accounts, he shall not escape by giving false explanation for the same. Provisions inserted to curb the rampant circulat…

INCOME TAX OFFICER,WARD 1,KLAPETTA, KALPETTA vs. MULLANKOLLY SERVICE CO OPERATIVE BANK LTD, MULLANKOLLY

Appeals are hereby partly allowed

ITA 728/COCH/2023[2015-16]Status: DisposedITAT Cochin25 Sept 2024AY 2015-16

Bench: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: Shri Adithya Unnikrishnan, CAFor Respondent: Shri Sanjit Kumar Das, CIT-DR
Section 269SSection 271D

…19, New Delhi dated 26.04.2023 has allowed the appeal in a similar case. Relevant extract is as follows: QUOTE "21. We do not agree with this rigid approach of the Ld. JCIT/CIT(A). In the context of constitutionality of the provisions in A ADIT vs. AB Shanthi 255 ITR 258 (SC) the Hon'ble Supreme Court observed that the object of introducing section 269SS is to ensure that ta taxpayer is not allowed to give false explanation for its unaccounted money, or if he has given some false entries in its accounts, he shall not escape by giving false explanation for the same. Provisions inserted to curb the rampant circulat…

INCOMETAX OFFICER, KOZHIKODE vs. THE VENGERI SERVICE COOPERATIVE BANK LTD, KOZHIKODE

Appeals are hereby partly allowed

ITA 727/COCH/2023[2016-17]Status: DisposedITAT Cochin25 Sept 2024AY 2016-17

Bench: Shri Satbeer Singh Godara & Shri Amarjit Singh

For Appellant: ------- None -------For Respondent: Shri Sanjit Kumar Das, CIT-DR
Section 269SSection 271D

…19, New Delhi dated 26.04.2023 has allowed the appeal in a similar case. Relevant extract is as follows: QUOTE "21. We do not agree with this rigid approach of the Ld. JCIT/CIT(A). In the context of constitutionality of the provisions in A ADIT vs. AB Shanthi 255 ITR 258 (SC) the Hon'ble Supreme Court observed that the object of introducing section 269SS is to ensure that ta taxpayer is not allowed to give false explanation for its unaccounted money, or if he has given some false entries in its accounts, he shall not escape by giving false explanation for the same. Provisions inserted to curb the rampant circulat…

DCIT CENTRAL CIRCLE-2, BHUBANESWAR vs. M/S. HOTEL SUKHAMAYA PVT. LTD, BHUBANESWAR

In the result, all the three appeals of the Revenue are dismissed

ITA 206/CTK/2022[2012-13]Status: DisposedITAT Cuttack18 Sept 2024AY 2012-13
Section 132Section 269SSection 271D

…reditors and hence, there was no evasion of tax. Further the Honourable Madras High Court in the case of CIT Vs. Kundrathur Finance & Chit Co. (supra) following the decision of Apex Court in Asstt. Director of Inspection (Investigation) Vs. Kum. A.B. Shanthi (255 ITR 258) held that if there was genuine and bona fide transaction and the taxpayer could not get a loan or deposit by account-payee cheque or demand draft for some bona fide reason, the authority vested with the power to impose penalty had a discretion not to levy penalty. In the case of Smt. Rupali R. Desai Vs. Addl. CIT (88 ITD 76), the Hon'ble Mumbai…

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