Reference on whether two Rs.20,000 cash receipts qualify as 'Amanat' and fall outside s.269SS, affecting s.271D penalty

The HC directed the Tribunal to refer to the Court under s.256(2) the discrete legal question whether two cash receipts of Rs.20,000 each were "Amanat" and thus outside the scope of "loan" or "deposit" under s.269SS so that penalty under s.271D would not be leviable. The HC did not decide the substantive characterisation, treated its factual observations as obiter, and refused to broaden the reference to encompass the assessee's other pleaded grounds (reasonable cause/bona fide belief and consistency), which remain undecided for subsequent proceedings.

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Issues: Whether, on the facts and in the circumstances of the case, no penalty was leviable under section 271D of the Income-tax Act, 1961, on the amounts of Rs. 20,000 each received from Raj Kumar and Darshan Singh on the ground that those amounts were in the nature of "Amanat" and not loan or deposit within the meaning of section 269SS of the Income-tax Act, 1961.

Analysis: The assessee sought direction under section 256(2) for the Tribunal to refer questions of law concerning whether specific cash receipts constituted "Amanat" rather than loans or deposits within section 269SS and thus whether penalty under section 271D was leviable. The Tribunal had partly allowed the appeal reducing penalty but did not refer this specific question. Given the nature of the controversy and that the Revenue has already obtained a reference on a related question, the Court considered it appropriate that the precise legal question on the two receipts be placed before the Court through a statement of case.

Conclusion: The Tribunal is directed to send a statement of the case and refer the specified question of law to the High Court under section 256(2) of the Income-tax Act, 1961.

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