TaxTMI 
TaxTMI 
2026 (7) TMI 1083
X X X X Extracts X X X X
X X X X Extracts X X X X
....nalty has been imposed without valid and demonstrable approval of the Joint Commissioner as mandate u/s 271E and therefore penalty is illegal and void. 4. That the penalty order is non-speaking does not consider submissions facts documents or judicial precedents and is therefore invalid. 5. That the authorities failed to apricate that repayment of money between husband and wife is not a loan repayment in commercial sense and is outside the mischief of section 269T supported by binding judicial precedents. 6.That the authorities erred in ignoring the bonafide family transaction and complete disclosure on record constituting reasonable cause under section 273B which specifically bars penalty. 7. That since the AO himself accepted the genuineness and source of funds during assessment u/s 147/143(3) the penalty was unwarranted and contrary to law. 8. That the penalty was levied without considering the CBDT Circular No. 345 and legislative intent that the provision is meant to curb black money and unaccounted transactions which is absent here. 9. That the CIT(A) erred in passing a cryptic, non-reasoned order failing to exercise appel....
X X X X Extracts X X X X
X X X X Extracts X X X X
....event the use of unaccounted cash under the guise of loan/ repayments. The appellant's repayment in cash of Rs. 4,00,000/- is exactly the type of transaction the law seeks to prohibit, because the cash movement cannot be independently verified, if defeats the very purpose of traceability, it compromises the audit trail of loan/repayments. Hence invoking penalty here directly supports legislative intent. The appellant further contended that the penalty provisions meant only for black money/ evasion. However, the appellant failed to appreciate the legislative intent behind section 269SS/269T is create a transparent banking trail, not merely to prosecute evasion. Even genuine transactions must comply with the prescribed mode of repayment when exceeding Rs. 20,000/-. Cash payments defeat audit trail and are exactly what the section seeks to prevent. Hence, law applies even to genuine family transactions if they are loans repaid in cash. 1. Penalty u/s 271E is Mandatory Once Default is Established: section 271 E mandates that penalty equals the amount repaid. Once contravention of section 269T is proved, penalty is compulsory unless reasonable cause is demonstrated, which has n....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... 6. The Ld. AR of the assessee submitted that the assessee had taken cash loan from his wife and repaid Rs. 4,00,000/- in cash to his wife. He submitted that the provisions of section 269SS do not bar genuine cash transaction of loan but bar only those transactions which are entered with the intention to evade taxes. These provisions are made to counteract evasion to tax but not to bar cash transaction between close relations. He also submitted that loan amount was fully explained before the AO and no additions were made during the assessment proceedings. Reliance is placed on the following decisions: (i) Commissioner of Income -tax, Faridabad v. Sunil Kumar Goel [2009]183 Taxman 53 Hon'ble High Court (Punjab & Haryana) (ii) Commissioner of Income-tax-1 v. Smt. M. Yesodha [2013] 31 taxmann.com 153 (Madras) Hon'ble High Court of Madras (iii)Shri Sunil Kumar Sood v. The JCIT Range 24, New Delhi ITA No. 1831/Del/2026 (A.Y. 20027-08) (iv) Savita S. v. Gangadshetti vs. The Joint Commissioner of Income Tax, Vijayapur Range ITA No. 116 (Bang) /2019 (v) Balwan Singh v. Assistant Commissioner of Income-tax [2022]137 taxmann.com 395(Delhi-Trib) o....
X X X X Extracts X X X X
X X X X Extracts X X X X
.... per the intention of the Legislature. The communication/transaction between the husband and wife are protected from the legislation as long as they are not for commercial use. Otherwise, there would be a powerful tendency to disturb the peace of families. to promote domestic broils, and to weaken or to destroy the feeling of mutual confidence which is the most enduring solace of married life. In the instant case, the wife gave money to husband for construction of a house which was naturally a joint venture for the property of the family only. This transaction was not for commercial use. The amount directly received by the husband. i.e.. the assessee. was to the extent of Rs. 17.000 only and the balance amount of Rs. 26.000 was given by payment directly to the supplier of the material required for the construction of the house. Though the expenditure was apparently incurred by the husband being the karta/head of the family, it could not be said that the wife could not have any interest of her own in this house being constructed. The transaction was neither loan nor any gift as no 'interest' element was involved and there was no promise to return the amount with or ....