Can admitting cash sales automatically lead to a 100% penalty.
An assessee admitted to making cash sales during the A.Y 2018-19.
The Assessing Officer treated this as a violation of the cash receipt limit (Section 269ST) and imposed a penalty equal to the cash received.
The CIT(A) upheld it.
But the Delhi ITAT looked at something important:
How exactly was the cash received?
Was Rs 2 lakh or more received from one person in a day, in a single transaction, or for one event/occasion?
The penalty order did not establish any of these.
The Tribunal held that simply looking at the total cash sales during the year was not enough to impose the penalty.
The same issue arose for AY 2019-20 and AY 2020-21, and the Tribunal allowed all three appeals.