The numerous amendments made by the Finance Act 2017 to curb the usage of cash in business transactions has serious implications for taxpayers. CA Jyoti Gupta has conducted a systematic analysis of these provisions with special emphasis on sections 269ST and 271DA and explained all of their nuances
Cash forms the base for any business or profession. There is always continuous cash cycle to keep a business moving and enter all daily transaction. However, cash transactions many times becomes means for tax evasion or generation of black money.
NDA government to curb cash transaction & to push digital payments to make India a cashless economy has made superabundant amendments in Finance Act 2017. Example: Limit under Sec.40A(3), reduced to Rs.10,000/- from Rs.20,000/-; U/s 44AD, on the total turnover which is received via banking channel, the rate of presumptive tax rate is reduced from 8% to 6% etc…
In this article an attempt has been made to analyze the provisions of section 269ST & section 271DA and its impact on taxpayers. Snooping curiosity is created by this new section including the 100% penalty clause vide sec.271DA amongst the taxpayers.
Provisions of section 269ST:
‘269ST. No person shall receive an amount of two lakh rupees or more—
(a) in aggregate from a person in a day; or
(b) in respect of a single transaction; or
(c) in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or an account payee bank draft or use of electronic clearing system through a bank account:
Provided that the provisions of this section shall not apply to—
(i) any receipt by—
(a) Government;
(b) any banking company, post office savings bank or co-operative bank;
(ii) transactions of the nature referred to in section 269SS;
(iii) such other persons or class of persons or receipts, which the Central Government may, by notification in the Official Gazette, specify.
Explanation.—For the purposes of this section,—
(a) “banking company” shall have the same meaning as assigned to it in clause (i) of the Explanation to section 269SS;
(b) “co-operative bank” shall have the same meaning as assigned to it in clause (ii) of the Explanation to section 269SS.’.
On perusal of section 269ST, it can be observed that, this section covers the payee / recipient of cash, under its ambit and not the payer. Vide the section, following three situations are covered:
(i) Receipt of Rs. 2 Lakhs or more from a person in a day in aggregate:
Section 269ST relates to payments received in aggregate from ‘a person’ in ‘a day’. Attention is to be given to words ‘a person’ and ‘in a day’. This section will get attracted if a sum of Rs. 2 Lakhs or
more is received in aggregate from the same person in a single day.
However, there will be no violation of section 269ST, if payments are received from different persons in a single day and none of such payments exceeds the specified limit of Rs. 2 Lakhs. For example, in a single day Mr. Ram received payments from four different persons namely, Q, R, S and all these payments are within the specified individual limit, then even though in aggregate total receipts exceeded the limit of Rs. 2 Lakhs, the section would not be attracted.
It is to be remembered that the section uses the word ‘receives’, it does not use the words sale consideration or debtor realization or any sort of fees etc. Accordingly, it would covers under its scope all the receipts on any account.
(ii) Receipt of Rs. 2 Lakhs or more in respect of a single transaction:
The second coverage of section 269ST is receipt of Rs. 2 Lakhs or more in respect of a single transaction. It envisages to cover the receipt of Rs 2 lakhs or more which is split into various dates in respect of a single transaction although not in aggregate on a single day.
To illustrate, if Mr. A receives a sum of Rs. 8 Lakhs in respect of a single transaction, in four installments of Rs. 2 Lakhs each, on different dates, then apparently, this would be covered under the purview of second condition. Accordingly, this condition prohibits the splitting of payments over period.
(iii) Receipt of Rs. 2 Lakhs or more in relation to one event or occasion from a person:
This is the third coverage of section 269ST and perhaps the wider of the earlier two and also litigation prone. This condition is certainly of widest amplitude as it seeks to cover all receipts from a person in relation to transactions in respect of single event or occasion. It would cover all transactions relating to one event or occasion such as cash gifts on the occasion of marriage, birthday, anniversary etc.
So this condition would impact the people from all walks of society. Under the income tax law, though gifts received from ‘relatives’ are exempt without any capping. But with the introduction of section 269ST cash gift even from relatives to the tune of Rs. 2 Lakhs or more towards single event or occasion, would attract consequences u/s 271DA .
Nitty-Gritty involved in section
Now, the most important question, which comes into play is, whether this section would also be attracted in cases, where one withdraw a sum of Rs. 2 Lakhs or more from his own bank account. Going by the language of Section, answer to this question is YES, since the language of the section says: No person shall receive an amount of two lakh rupees or more.
Accordingly, if cash of Rs.2 Lakhs or more is even withdrawn from one’s bank account, provisions of
Sec.269ST would be attracted.
However, the section advocates, that, Rs.2 Lakhs or more is received in aggregate from ‘a person’, that would further imply, that, a person can although withdraw higher amount than Rs.2 Lakhs in cash, provided, from different banks. Attention is drawn towards the point that, even different bank accounts maintained with a particular bank cannot be used for withdrawing money above the specified limit, as the same would attract the condition of ‘a person’ and corresponding consequence of Sec.269ST. However, there still lies many questions considering the practicality of various transactions involved in Indian business culture.
Penal provisions for contravention of Sec.269ST:
Also, a new section 271DA is inserted under Income Tax Act after Sec.271D. As per section 271DA of Income Tax Act, if a person receives any sum in contravention any of the provisions and rules of section 269ST, he shall be liable to pay penalty of amount sum equal to the amount of such receipt received in cash. Thus in simple words the penalty amount would be 100% of the amount received in contravention of this section.
Further the section, also provides a proviso, which states that, penalty shall not be imposable if the person proves that, there were good and sufficient reasons for contravention.
Now, the words used in Income Tax Act, like sufficient / good reasons are always most vulnerable to litigation, Example: Sec.14A (A.O is not satisfied with correctness of claim of assessee), Sec. 40A(2)(a) (A.O. is of opinion that such expenditure is excessive or unreasonable) and many more. As a sufficient reason/cause as per the assessee, may, rather, mostly, do not satisfies to the reasonable criteria of tax department and result into excessive litigation.
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Hi,
I am working with ICICI Home Finance; company has provided Housing loans to individuals, now on repayment the borrower goes directly to ICICI bank and deposits cash of 2 lakh or above in my account…will it be considered as violation of Section 269ST?
making payment in excess of 10,000/- for purchase of goods for trade is violation of section 40(a)(3).
(secondly) it is also violation of section 269ST for him who received the cash in excess of Rs. two lakh. take care and avoid violation of these sections
Sir ,
We are dealing with milk Industry , where customers are generally paid cash for purchases of milk and retailers are paid in aggregate to our bank account directly as a third party in cash for more than 2.0 lakh or some times it is below Rs 2.0 lakhs . They paid some times cash at company cash counter in cash for more than Rs. 2.0 lakhs also . It is also seen that they paid in cash in different banks in a same day and at the same time they also deposit cash at company cash counter whose aggregate is more than 2.0 lakhs . Our question is that whether section 269ST is applicable on us . Cash received at our bank through our retailers are also come under purview of section 269ST or not ?
What will be the implication on receiver if the customers deposits the cash in his collection accounts more than Rs. 2 Lakhs against single bill or more than multiple deposits against one bill more than Rs. 2 Lakhs.
Whether this restriction will be applicable on this or not as the deposit is in receivers bank account and they are excluded from this scope.
Sir, can we get payments in cash more than 2 lacs from a dealer in a year against different Invoices. e.g. we are raising invoices amoountin Rs. 5000 to 10000 per week and issuing cash receipts for the same. The annual amount against these receipts exeeds 2 lacs. Is sec 269st applicable on these transaction.
Bhushan Sharma
Sir, can we get payments in cash more than 2 lacs from a dealer in a year against different Invoices. e.g. we are raising invoices amoountin Rs. 50000 to 100000 per week and issuing cash receipts for the same. The annual amount against these receipts exeeds 2 lacs. Is sec 269st applicable on these transaction.
dear maam/sir…….. if we have to construct a house…..if we withdraw tax paid money from bank and pay contracter in cash.does any of these conditions like 269ss or 269st apply to it?somebody said one cant pay more than 10,000 per day in cash!!
reason i am asking is that sometimes these people dont take cheque
thank you
Sir I have a boubt about (269st) 2 lakhs Rupee’s is in single transition or in a year transition limit please clarify it.
hi all, one of my friend wants to buy a constructed house cost of 40 lakhs and seller wants cash in this case if the buyer pays cash in 8 days daily 5 lakhs can we consider this as one transaction or different transactionsand i want to know whether he is liable to pay penalty under sec 269 pls reply
In my case, it is slightly different. Though Iam the seller of my house and don’t prefer to have any cash transactions, my buyer insists that he will be able to pay around 75% of the total value by cash only. He is ready to pay directly to my House Loan account in SBI as the house procured by me is under a HOME LOAN sanctioned by SBI.
CBDT has rightfully decided that 271DA is not applicable on withdrawals from Banks, Post Office and cooperative banks. pls find the update
CBDT Clarifies Imp Law On Cash Transaction Limits Imposed By Sections 269ST And 271DA
The CBDT has issued a press release dated 5th April 2017 by which it has provided important clarification regarding the restriction imposed on cash transaction by sections 269ST & 271DA inserted by the Finance Act 2017 to the Income-tax Act. These sections provide that no person (other than those specified therein) shall receive an amount of two lakh rupees or more (a) in aggregate from a person in a day; (b) in respect of a single transaction; or (c) in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account. The CBDT has clarified that the said cash transaction limit of Rs 2 lakh will not apply to withdrawal from banks, cooperative bank and post offices
i think with the pace of tax deptt moving up the neck of asessee, we are well on the way when taxmen will have to be invited to any marriage of bg party thrown so as t enable him calculate and collect the applicable tax and penalty u/s 271DA.
Pure Raam Raj. no shagan era about to be unfolded.
Thank you CBDT, you have not interpreted the provision as our foolish professionals have been making. I don’t know why professional have been falling in such a hyper technical interpretations, which is far from the intention and reality. The same thing happened at the time of demonetisation while interpreting provision of the then section 115BBE. Our professions really need to learn lot many things instead of folloing sheep line.
Any notification about the non applicability of provisions of section 269ST is not going to be the correct remedy. The notification is not going to cure the mischief of the language of the statute. The correct remedy is to amend the section. The general norm is that the circulars and notifications issued by CBDT are generally binding upon the officers but in the event of breach of the norm the circular or notification, differing with the plain language of the section will not bring any relief before any court of law. If a circular had expressed a view which the department did not follow, the remedy is not to ask the court to render its opinion in accordance with the circular but to approach for necessary relief elsewhere. In CIT v. Hero Cycles (P) Ltd. (1998) 1 DTC 226 (SC) : (1997) 228 ITR 463 (SC), Supreme Court had held that it is well settled law that circulars can bind the Income Tax Officer but will not bind the appellate authority or the Tribunal or the court or even the assessee. Circulars or notifications are an administrative act which cannot override the law.
The appropriate course for the Government is to make specific provisions in the statute exempting the withdrawals from bank account from the scope of section 269ST.
Dear Author
if person or company sell goods to person with different invoice (with different days )with in limit same as received amount with in limit with respect to invoice.if transcation amount all together is 10,00,00/- is it applicable sec 269ST
why Govt. is changing the stand daily? one get confused.if there is a party in the 5/7* Hotel,no credit is allowed and there is limit on credit card and on line transactions.whether the Govt. will one more clarification that cheques are acceptable in such situation.
CBDT vide its press release dated 05/04/2017 has clarified that it will not apply to cash withdrawals from Banks.
CBDT vide its press release dated 05/04/2017 has clarified that it will not apply to case withdrawals from Banks.
important
CBDT Clarifies Imp Law On Cash Transaction Limits Imposed By Sections 269ST And 271DA
The CBDT has issued a press release dated 5th April 2017 by which it has provided important clarification regarding the restriction imposed on cash transaction by sections 269ST & 271DA inserted by the Finance Act 2017 to the Income-tax Act. These sections provide that no person (other than those specified therein) shall receive an amount of two lakh rupees or more (a) in aggregate from a person in a day; (b) in respect of a single transaction; or (c) in respect of transactions relating to one event or occasion from a person, otherwise than by an account payee cheque or account payee bank draft or use of electronic clearing system through a bank account. The CBDT has clarified that the said cash transaction limit of Rs 2 lakh will not apply to withdrawal from banks, cooperative bank and post offices.
Withdrawals from Banking Accounts….. Huuhhhh !!
Rubbish created by the Non-Lawyers.
.
Answer to this is very simple. In every transaction there must be at least Two Parties. One Gives and Another Receives. It may be in trade, services or Banking. In Trade or Services initiation of Cash transaction is started primarily with the “intention of the Payer” to pay Cash and the Recipient always remains at secondary position. He may or may not accept Cash Payment. But In a transaction of Withdrawing Cash from the bank, the “Initial Intention” lies with the Account holder. At his instruction, bank is duty bound to pay Cash, unless its not restricted by the rule of banking…… So in first situation the “Intention” of first person (Payer)initiate the transaction was commanding, while in second situation, the “Intention” of Second person(Account Holder/ Recipient)matters. and this basic difference of keep out, cash withdrawing from bank, out of purview of the new section.
.
and food for thought for those who do not agree with my view:–
Rather than withdrawing himself, If the account holder issues non-account payee cheque in the name of third person, say his employee, then what would be the position ??
The CBDT has issued a press release dated 5 April 2017 which mentions that 269ST does not apply to cash withdrawals from banks.
there is no such press release in incometaxindiaefiling web site
So far interpretation of the language used as per my understanding cash withdrawal from bank account (other than loan account) are covered by section 269ST.
I am equally confident that soon clarification/ notification will be issued to exclude bank withdrawal from the scope of section 269ST.
A more serious impact will be on NBFC. Hitherto loan granter did not look into mode of repayment of laon, now if loan amount exceeds Rs. 2,00,000/- loan granter cannot take repayment in cash.
Hi All, I hope everyone is aware of section 269T which is applicable in case of repayment of loan or deposit . if not please go through. In this section the definition of loan or deposit is much wider than 269SS. Please also go through the first proviso to this section which says that such repayment can also be made by crediting the amount to Saving Bank account which means saving bank account is considered different than Deposit or loan. If that be so do we need to ponder it further. Means that saving Bank account was never considered as Deposit so entire debate is worthless?????
If some still feels that it does not make much difference to interpretation then they have to think that law maker does recognise and fully aware of saving bank account as they excluded the payment to saving bank account from the purview of section 269 T. By implication if they want to cover saving bank account under section 269 ST they would have done so by amending the definition of Deposit or loan. They have not done so that means it is not covered.
Further, section 269 ST does not cover transaction covered by section 269SS and if one read first proviso to section 269SS it says that provision of this section shall not apply to any loan or deposit ……..accepted from……any banking company. which means if someone accept deposit from Banking company it is not covered by section 269SS which means also excluded from section 269ST….(for those only who believe that saving bank account/current account can still be included under section 269ST as deposit). Hope it is helpful………
With due rerspect, the interpretation of Section 269ST seems to be incorrect wrong with regard to cash withdrawal of more than Rs. 2 Lakh in a day from one’s Bank account. The language of Section 269ST is “No person shall receive an amount of two lakh rupees or more—
(a) in aggregate from a person”. “A person” has to be read and interpreted as “another person”. The receipt of money has to be from another person. Merely transferring one’s own money from one pocket to another or from one’s bank account to another Bank account, would not attract Section 269ST.
Clause(a)of section 269ST- “in aggregate from a person in a day” – still requires to be clarified. If A purchases goods from the Big bazar under different bills / invoices, whether Big Bazar will refuse to sell/receive money from A if the average transaction is more than Rs. 2 lakhs.
Similarly withdrawal from bank also is not cleared. Banks withdrawal/receipt I feel are not covered under section 269ST.
till the Income Tax department does not come out with a clerification, it appears that cash withdrawals will be covered by section 269ST
Thank you for enlightening us with such a wonderful article….kindly also give clarification whether person withdrawing an amount exceeding Rs.2 lacs from Bank will also tantamount to receipt as per section 269ST.
Plain reading of section says that 269ST will be attracted when money is withdrawn from bank in contravention of limits as mentioned in the section. CBDT should come out with clarification/FAQs in the circumstances wherein cash can be withdrawn from the bank exceeding limits.
IF A SELLER SOLD THE GOODS FOR RS. ONE LAKH DAILY FOR SEVEN DAYS.TO B (FOR SEVEN LAKHS) AND HE RECEIED THE AMMOUNT OF RS.TEN THOUSAND DAILY IN CASH. WHETHER THIS SECTION IS APPLICABLE OR NOT.?
If one invoice is raised, then Yes. If seven invoices are raised, then No.
WHEN ANY AMOUNT IS RECEIVED AND SOME FEE, CHARGES, OR EXPENSES ARE PAID, ONLY THEN IT IS CALLED RECEIPT, IT IS ONLY WITHDRWAL FROM HIS OWN BANK POCKET, SO ANY AMOUT WITHRWAN FROM HIS OWN CURRECT ACCOUNT/ SAVING ACCOUNT. I THINK SECTION 269 ST IS NOT APPLICABLE.
In case of agriculturist, a receipt for his crop would this apply.
Again the same agricultures buys seed and fertilizer, what about the shopkeeper.What purpose is served by creating work for the Department when there is no Revenue impact.
Shagun atmarriage,or such other occasion is not resorted at a large scale.
It is much better to levy tds,or tcs provision,instead of penalty.
What about receipt by a bank of deposit of sales by a petrol pump,for the assesse bank,is it hit.
Law cannot be interpreted to result in an absurdity. So I go to bank, I need Rs 3 lakhs for medical purpose. The law says no penalty if money received from your own bank savings kept with bank, only as account payee cheque. What will I do with this cheque? I will have to do devious and unnecessary withdrawals from different bank accounts to circumvent the law. Is this a life of convenience? Reading views supporting the levy of penalty does not surprise me as the AO cannot be faulted for following perverse interpretations. Having said this I hope there is clarification and the common tax payer does not have to pay fees to the tax counsel.
This would lead to absurd interpretation. The meaning in no way can be stretched to include bank and bank can not be included in the definition of word “person”, had this been the intention of the legislation, it would have been included the word “from any persons including any banking company”. As such withdrawal from bank is not covered under this section.The authors of various articles must adopt logical and practical approach of the provision, keeping in mind the rules of interpretation
In era of e-wallet, why we are worried about 269ST, take receipt in bank and make payment from bank.
I agree with the view of Shri A. Sheshadry sir. This is the appropriate interpretation as of now.
Bank transactions will not be covered u/s 269ST because of the reason that the provision clearly mentions that receipt should not be in any form other than A/c payee cheque, bank draft or electronic modes. If the intention of the Govt was to cover even withdrawals from banks, then there was no need for inserting above sentence, they would have just mentioned that “any person should not receive cash in excess of Rs 2Lakh”.
By inserting the above sentence, it is implied that there has to be a transaction wherein receipt for such transaction should not be in cash and hence this section should not apply to withdrawal of cash.
Also, when in withdraw cash it is always called as “withdrawal” and not as “receipt” because there is no new transaction which comes into picture. Even in books, such amount is not shown as “receipt” and is only shown as withdrawal by reducing from bank and adding to cash.
If we were to consider such withdrawal as “receipt” then for the purpose of charging presumptive tax u/s 44AD, are we going to consider such withdrawal as “gross receipts” and offer it to tax??. I don’t think so.
Because of the above, withdrawal should not be covered under new section 269ST
i wish to differ respectfully from the views of CA. S. G. Bhuptani sir. The rationale explained by him appear to be correct in the context of CC account. However, the situation is different in the context of savings account and current account. The banks are in the business of banking and in the course of said business, they accept and repay the money to their customers. They are not custodian here as they circulate the money received in their business of banking and also pay interest on savings account. They are not bound to repay the same money to the customers though the amount should be the same. They can be said to be custodian in respect of bank lockers but not in respect of savings or current account. Further, no exemption can be sought on the ground that the money belonged to the account holder. If we see the section literally, it emphasizes on receipt and not on ownership. Let us take an example. An assessee received back loan of Rs. 5,00,000/- in cash which he advanced to his friend earlier. This transaction is not covered in section 269SS as the said section only cover acceptance of loan in cash. Whether this transaction will be hit by section 269ST? in my view, yes. This is regardless of the fact that the underlying money belonged to you and not to your friend. I am therefore of the view that this rationale is not correct.
In my humble view, the drafting of section has ended up in unintended consequences. We will surely see the clarifications/notifications from CBDT making what is obvious as certain. Thanks
the idea of the section is to put restriction on generation and circulation of black money as obviously bulky withdrawals from bank often could drive into parallel economy. To that extent Jyoti has a valid point.
when we withdraw money from our own bank it is like taking out MONEY from our own locker own almira our own pocket how section 269 ST AND SECTION 271DA CAN CONTROL OUR PERSONAL LIBERTY AND LIFE
would not a transaction of receipt of cash to fall under this section must be bilateral in nature involving two persons….since bank is only a medium here..
The discussion over this article shows that one of the major concern is withdrawal from bank account. Thus government should come up with necessary clarification on the matter as soon as possible, this suggestion should be initiated at institutional level as well as at various professional forums.
The language used regarding the receipt is “unqualified”, i.e., it has not specified from whom the receipt is or the nature of receipt in the hands of the recipient. A Bank and the depositor are two different persons. A withdrawal of money from savings bank account of a bank amounts to a receipt in the hands of the depositor. In the books of the bank the depositor is a creditor and the amount paid to the depositor reduces the liability of the bank. Its a pure commercial transaction in the hands of the bank.
A transaction is a scheme of settling the claims and obligations between two persons. It may or may not be a commercial transaction. A nature of the transaction is similar between the persons involved in the transaction. The word transaction is not qualified in section 269ST. The section did not say a “commercial transaction”. Every transaction is covered under the section. The settlement of a debt by a bank either fully or partly amounts to a transaction. Infact such transaction in the hands of the bank is a commercial transaction. Withdrawal of money from bank is also a transaction in the hands of the depositor.
Transaction under Section 269SS are excluded from the scope of 269ST thereby retaining the value of loans and deposits made in cash @ Rs.20000/- Section 269T speaks about the cash payments made by a bank on account of a loan of a demand or term deposit. savings bank deposits are not covered under 269T. Now 269ST takes care of the repayment of savings bank deposits or in other words the receipt from savings bank accounts.
It is most appropriate to assume that the new provisions under 269ST apply in relation to a withdrawal by a depositor from his savings bank account held with any bank.
Well analysed. Bad legislation add to unnecessary litigation. This a perfect example of bad legislation.
The section is applicable on every `person’ and `person’ is defined in section 2(31) which includes an individual,
a Hindu undivided family,a company,a firm,an association of persons or a body of individuals, whether incorporated or not,a local authority, and every artificial juridical person, not falling within any of the preceding sub-clauses. A banking company is included in the term `person’ and therefore withdrawal from bank is caught within the mischief of the section as it is presently worded. Withdrawal of own money or not are all extraneous considerations. Hopefully CBDT will issue a clarification soon under clause III of first Proviso to exempt withdrawals from bank from the rigors of the section to save unintended people from unnecessary harassment.
We may tell that Section is poorly drafted in hurry.
The provisions of Section 269ST are not only very very harsh but also full of stupid drafting.The PM and the FM of our country are not correctly advised and unfortunately the FM is not applying his mind the proposed changes.A prima facie reading of the provisions will show that they are not speaking about one financial year or one previous year.The restriction appears for the life time.
Amount withdrawn from bank is not an amount received from bank. One has kept his own fund with bank and asking bank to return the same.
Jyoti Madam,
When we withdraw money form our own Bank account. What we receive is our own funds. The Bank is really a trustee of our own funds. I have serious doubt about applicability of Sec. 269 ST to withdrawals form Bank. Secondly, for a moment if we consider your interpretation is correct then withdrawals for the purpose of payment of wages to workers, also attract penalty.
No penalty can be levied u/s. 269ST on cash withdrawn from bank. If such cash is withdrawn from Cash Credit (CC) or other facility account then it amounts to loan from bank and the said transaction is specifically exempted u/s. 269SS of the act and 269ST is not aplicable to transactions covered by section 269SS and 269T.
If cash is withdrawn from savings or current account then also penalty is not attracted as in that case the money is not received by the person but the same is withdrawn by him from his own bank account. The bank is mere custodian of the money of the account holder. In the books of the accounts holder the entry is passed as “Contra” and not as “Receipt”. In the same way bank shows in bank statement as “Self” or “Cash withdrawn”. The withdrawn and deposits from bank and to the bank are done by the person himself and not by the bank.
The question would arise only where the Fixed Deposits are paid in cash, because in that case the bank is paying back the money it has borrowed from the person, but in that case also 269T is there to take care of.
Thus no penalty can be levied on cash withdrawn from bank u/s. 269ST.
Section 269ST is not attracted in case of bank withdrawal, as it is not a receipt from a person, but a withdrawal from own bank account.
Withdrawal/ Receipt from bank cannot be said in respect of single transaction,as transaction here means receipt of money for sale of goods/ services
Similarly withdrawal/Receipt from bank cannot be said in relation to one event
This would lead to absurd interpretation. The meaning in no way can be stretched to include bank and bank can not be included in the definition of word “person”, had this been the intention of the legislation, it would have been included the word “from any persons including any banking company”. As such withdrawal from bank is not covered under this section.The authors of various articles must adopt logical and practical approach of the provision, keeping in mind the rules of interpretation
Article of great help..
Very well explained
very well written …tks
the words ‘a person’ may suggests plural ( general clauses act s. 13) to be true so that splitting of payments over persons may even invite provision application.
Dear Author,
Could you please define me that how can we conclude the cash withdrawal from bank will affect the section because nothing contained in the given section about bank transactions. Further, we are not receiving the amount from bank although we are will fully withdrawing the amount from bank.
Thanks
It can be implied because receipt by bank is exempted…..
Further unless and until any exemption of such transaction is given it covers every type of transaction. Here cash withdrawal is transaction……
If someone differs please enlighten.
any withdrawal from saving or current account should not be subjected to such provision because the bank in c=such case is providing the stewardship or custodian duty and we are receiving our own money, which has been rightfully available for scrutiny.
Taking one’s own money from upper pocket or lower pocket does not generate any transaction.
any withdrawal from saving or current account should not be subjected to such provision because the bank in such case is providing the stewardship or custodian duty and we are receiving our own money, which has been rightfully available for scrutiny.
Taking one’s own money from upper pocket or lower pocket does not generate any transaction.
Tribhuwan Sir, cash withdrawal from bank account, would amount to cash receipt in your hands, which would attract the provisions of Sec.269ST
This would lead to absurd interpretation. The meaning in no way can be stretched to include bank and bank can not be included in the definition of word “person”, had this been the intention of the legislation, it would have been included the word “from any persons including any banking company”. As such withdrawal from bank is not covered under this section.The authors of various articles must adopt logical and practical approach of the provision, keeping in mind the rules of interpretation
I agree. No penalty attracts on cash withdrawn from bank.
Now CBDT has clarified that withdrawals from Bank are not covered u/s 269ST.
it was nicely explained
Thanks