Penalty under section 271DA deleted where tax payment did not amount to admission of alleged cash receipt.

Penalty under section 271DA for alleged cash receipt in violation of section 269ST was deleted because the assessee gave a plausible explanation that tax was paid without admitting the alleged cash transactions. The record showed that the income was offered only to buy peace and avoid litigation, and similar penalty proceedings under section 270A had already been dropped on the same explanation. On those facts, the tribunal held that the penalty could not be sustained merely on the seized material and statements from search. The assessee succeeded on the main challenge, while the remaining grounds became academic.

---

---

Issues: Whether the penalty imposed under section 271DA for alleged receipt of cash in violation of section 269ST was sustainable on the facts of the case.

Analysis: The penalty arose from seized digital material and statements recorded during search, but the assessee consistently maintained that the alleged cash transactions were not accepted as such and that the income was offered only to buy peace and avoid prolonged litigation. The appellate record also showed that penalty proceedings under section 270A had been dropped on a similar explanation. In these circumstances, the explanation that tax was paid without admission of the alleged cash receipts was treated as a plausible one, and the penalty could not be upheld merely on that basis.

Conclusion: The penalty under section 271DA was deleted and the issue was decided in favour of the assessee.

Final Conclusion: The assessee succeeded on the core challenge to the penalty, while the remaining grounds were rendered academic; the appeal was only partly allowed.

Ratio Decidendi: A penalty for contravention of section 269ST cannot be sustained where the assessee offers a plausible explanation that payment of tax on the impugned income was made without admitting the alleged cash receipt, and the surrounding facts do not justify penal consequence.

---