Cash payments and penalty under Section 269ST: heavy cash suit claims must be reported to tax authorities, PAN disclosure refused.

Court noted that substantial cash payments claimed in civil suits trigger an obligation to notify the jurisdictional income tax authorities for verification as such transactions should be reflected in income tax returns; accordingly, forwarding plaint and documents to the tax authority is appropriate. The court declined to compel disclosure of the plaintiff's PAN to the opposing party, modifying the trial court order to that extent. Reference to higher court guidelines endorsing judicial intimation of large cash transactions informs the requirement to involve tax authorities, but the propriety of permitting suits based on unrecorded or suspected black money remains for final adjudication.

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Issues: (i) Whether a court may intimate the jurisdictional Income Tax Department when a plaint alleges a cash payment of Rs.2,00,000/- or more and forward plaint documents for verification; (ii) Whether the plaintiff/petitioner can be compelled to disclose his PAN number to the opposite parties.

Issue (i): Whether courts should inform the Income Tax Authorities about suit transactions involving cash payments of Rs.2,00,000/- or more and forward plaint documents for verification.

Analysis: The judgment applies the guideline that courts must notify the jurisdictional Income Tax Department where a suit alleges payment of Rs.2,00,000/- or more in cash, to enable the tax authority to verify potential contraventions of the statutory regime designed to curb unaccounted cash transactions. The reasoning recognises that substantial cash payments, even if made before a specific provision came into force, may warrant tax authority scrutiny to determine whether such payments were reflected in returns or give rise to suspicion of unaccounted income.

Conclusion: The direction to the ministerial officer to forward the plaint and documents to the jurisdictional Income Tax Authority is confirmed.

Issue (ii): Whether the petitioner can be ordered to disclose his PAN number to the respondents.

Analysis: The guideline relied upon for reporting cash claims does not include a requirement to compel a litigant to disclose his PAN to opposing parties. Compulsion to reveal PAN to the opposite party is treated as distinct from court intimation to tax authorities and raises concerns regarding disclosure beyond the scope of the reporting guideline.

Conclusion: The direction compelling the petitioner to reveal his PAN number to the respondents is set aside.

Final Conclusion: The revision is partly allowed by removing the compulsion to disclose PAN to the opposite parties while confirming the reporting of substantial cash-claim suits to the Income Tax Authorities, with the operative effect that the disclosure requirement to respondents is vacated but the obligation to forward plaint documents to tax authorities stands.

Ratio Decidendi: Courts must intimate the jurisdictional Income Tax Authorities upon receiving plaints alleging cash payments of Rs.2,00,000/- or more so tax verification may follow, but a litigant cannot be compelled to disclose his PAN to the opposing party as part of that process.

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