Penalty under section 269SS not attracted where genuine loan receipts were routed through crossed cheques and banking records supported the transactions.

Penalty under section 269SS was not attracted where loan amounts were received through crossed cheques and credited through the banking channel, with the Tribunal finding the transactions genuine, bona fide, and supported by banking records. The court treated the use of crossed cheques as only a minor deviation from account-payee cheques and found that the statutory mischief targeted by section 269SS was not triggered on those facts. Because the determination turned on factual findings about the nature and genuineness of the transactions, no substantial question of law arose in the appeal, and the penalty could not be sustained.

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Issues: Whether penalty under section 269SS of the Income-tax Act, 1961 was attracted when the loan transactions were routed through crossed cheques and were found to be genuine and bona fide, and whether the appeal raised any substantial question of law.

Analysis: The amounts were received through crossed cheques and credited through the banking channel. The Tribunal found that the transactions were supported by banking records, showed no flaw, and constituted only a minor deviation from account-payee cheques. On these facts, the statutory mischief contemplated by section 269SS was held not to be attracted. In view of that factual finding, no substantial question of law arose for consideration in the appeal.

Conclusion: The penalty could not be sustained and the appeal was not maintainable on any substantial question of law; the finding operates in favour of the assessee.

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