The Income Tax Appellate Tribunal (ITAT), Kolkata
The Income Tax Appellate Tribunal (ITAT), Kolkata bench on Wednesday held that cash transaction between close family members for giving a support and help wouldnot attract penalty under section 269SS of the Income Tax Act, 1961. The assessee, in the instant case, accepted a cash loan of Rs. 4,00,000/- from his son. Out of this, he repaid rs. 1,50,000/-. Assessee repaid the loan to his another son Sri Indranil Banik Mazumder at Rs. 2,25,098/- and also repaid the loan to his wife Smt. Sandhya banik Mazumder at Rs.54,928/. The Assessing Officer imposed the penalty under sections 271D and 271E of the Income Tax Act, 1961 on the assessee by observing that the assessee has accepted the loan in cash and paid the loan in cash.
On the second appeal by the assessee, the bench observed that all these transactions are between husband and wife, and between father and son, being a close relative of one family. The bench also notes that assessee is a salaried employee and not a businessman. “Therefore, based on the facts narrated above, these transactions do not fall within the ambit of sections 269SS and 269T of the Act and for that, we rely on the judgment of coordinate Bench in the case of Anant Himatsingka and Manisha Prakash Amin (supra).To support the family members, the money has been given by the assessee to his son/wife. This is simply a transfer of money from one family member to another family member to support day to day expenses, educational expenses and other family expenses. Going through the facts of case before us, we are of the view that the transaction between son and father and wife and husband, for giving a support and help, in law, is not a loan or deposit in stricter sense of section 269SS of the Act and it is only a financial support, therefore, penalty imposed by the Assessing Officer and confirmed by the ld CIT(A) needs to be deleted, and accordingly we quash both the penalty orders, i.e, under section 269SS and 269T of the Income Tax Act.”
The Karnataka High Court, last week held that a wife cannot plead ignorance about a huge cash flow in the bank account of her husband. The assessee, T. V Satyanarayana, a First Division Clerk of the City Civil Court, Bangalore, received a large sum of Rs.95.83 lakh in his Bank Account. Suspecting the transaction, the assessing Officer sent a notice to the assessee asking him to explain the source of the money. Unfortunately, the assessee expired before receiving the notice. On receipt of the same, the wife of the assessee responded that she was not aware of the tax matters and the details of the bank accounts of her husband. However, the objections were overruled by the department and passed an order demanding tax.
The petitioner approached the High Court through a writ petition and submitted that in the absence of any separate Notice issued in the name of the petitioner-wife, Smt. S. Savithri, she is not accountable or answerable to furnish the said information as required under Section 133 (6) of the Act. After hearing the rival contentions, Justice Vineeth Kothari found that the petition was misconceived and cannot be entertained. “The Notice even if deceased, the Legal Representatives or the persons who inherit the estate of the deceased persons will have to comply with the said Notice for furnishing the requisite information. The very purpose of the provisions of Section 133 (6) of the Act is to elicit the requisite information and details from the person concerned.” “There is nothing on record to show that the fact of death was within the knowledge of the Respondent-Income Tax Officer and he still issued the Notice to a deceased person. The Legal Representatives including the petitioner, wife of late Mr.T.V. Sathyanarayana before this Court cannot protest or deny the obligation to furnish such information including the Bank details and relevant vouchers to be obtained from the concerned Bank of the husband of the present petitioner. After all, the wife of a person cannot plead ignorance about a huge cash inflow in her husband’s bank account,” the Judge added.