Copyright © HT Digital Streams Limit all rights reserved. Economy SC judgment on the reporting of cash transactions above £ 2 Lakh empowers tax man, the litigation in civil suits can deter Section 269th of the Income Tax Act prohibit cash receipts of £ 2 or more of a single person per day, whether for a single transaction or for transactions related to one opportunity or opportunity. (Reuters) Summary experts said the Supreme Court ruling requiring the reporting of significant cash transactions could discourage rights litigants from seeking justice as it raises the investigation of the income tax division and this can lead to cash -based fines. A recent Supreme Court ruling requiring lower courts to report civil costs and property registration documents that include cash transactions of £ 2 or more in the income tax division is expected to increase the investigation in property and financial disputes, legal and tax experts told Mint. It can deter individuals involved in such disputes to approach the courts, for fear of tax fines and investigations. “This ruling undeniably closes in line with the broader push to a cashless economy,” says Kunal Savani, a partner at Cyril Amarchand Mangaldas. “However, at the same time, it empowers the income tax department with greater supervision, which can even investigate bona fide litigants if large cash transactions are involved.” Savani emphasized that the ruling would significantly affect different transactions, including property trading, heritage disputes, unregistered business contracts and informal loan arrangements, especially in semi-urban and rural areas where cash use is still widespread. Read also | Must check out ITR -Liquity! These cash transactions can lead to 100% fine for income tax “sincere litigants who have made inadmissible cash transactions, despite having a valid claim, can be deterred to approach the courts to avoid tax fines and inquiries,” said Abbas Jaorawala, senior director and head of tax at Khaitan Legal Associates. The Supreme Court Bank consisting of Justices JB Pardiwala and R. Mahadevan issued the ruling on Wednesday. The court also said that any property registration document that reflects a cash payment of £ 2 or more must be reported to the jurisdictional Income Tax Authority by the relevant sub -registrar if it violates section 269th of the Income Tax Act, which prohibits cash receipts of £ 2 lakh or more. Action against non-compliance The court said if tax officials uncovered such payments by any source or lawsuit and the registering authority failed to report it, the case should be escalated to the state or the Union area. In addition, the income tax department is the mission to start proceedings and recommend disciplinary action against the officers responsible in cases of non-compliance. The statement of the peak court came while set aside a civil case against RBANMS Education Institution, a charity confidence in Bengaluru, who tried to prevent the trust from transferring land he had held since 1929. The claim involved an agreement to sell the land for £ 9, with £ 75 lakh paid in cash. Implications of Section 269th The Decisive References Section 269th of the Income Tax Act, which was established in the 2017 Finance Act and came into effect on 1 April 2017. This section prohibits cash receipts of £ 2 or more of a single person on a day, either for a single transaction or for transactions related to one opportunity or opportunity. Violations of this provision are subject to fines equal to the amount received. This provision was established a few months after the government’s demonetization drive in November 2016, which aimed to reduce the circulation of black money and encourage digital transactions. Read also | Income tax: 5 Cash transactions with high value can attract it. “This ruling forces both litigants and registration authorities to acknowledge that legal recognition cannot protect transactions that do not violate the fiscal law on their face,” Kumar pointed out. Pre-2017 transactions While the decision brings clarity on the treatment of cash transactions in the future, legal experts have asked questions about how courts will handle matters where cash is allegedly involved, and those related to transactions done before 2017. “It will be interesting to see what happens to disputes regarding transactions where the cash component was paid before the 2017 amendments.” Pallav Pradyumn Narang, a partner at CNK, a chartered accountant firm, added: ‘It has yet to be seen how courts will report that cash is only involved in, but no trace is established. Will reporting only occur when the matter is assessed and a cash transaction is above the defined threshold, or even on the stage of the lakes allegation? ” Read also | CBDT issues the Central Action Plan for FY25, setting Income Tax Division Road Map Tax requirements, cash transactions, arrears, but some advocates said that although the decision will affect the litigation-even case-just case-not the civil disputes. “Compulsory reporting by courts and sub -registrars to income tax authorities will in no way affect civil litigation, as income tax proceedings will be parallel to any civil case. Income tax proceedings that are independent proceedings will not interfere with the civil litigation,” Lokesh Shah suggested a partner of Induslaw. Catch all the business news, market news, news reports and latest news updates on Live Mint. Download the Mint News app to get daily market updates. More Topics #Tax #ThomStaxing Mint Specials
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