Recently, the Kerala High Court in P.C. Hari v. Shine Varghese and Anr., MANU/KE/2702/2025 has taken the view that a debt created by a cash transaction above Rs. 20,000/- (Rupees Twenty Thousand) in violation of the provisions of Section 269SS of the Income Tax Act, 1961 (for short 'IT Act, 1961') is not a 'legally enforceable debt' unless there is a valid explanation for the same, meaning thereby that the presumption Under Section 139 of the Act will not be attracted in cash transactions above Rs. 20,000/- (Rupees Twenty Thousand).
{Para 19}
20. However, this Court is of the view that any breach of Section 269SS of the IT Act, 1961 is subject to a penalty only Under Section 271D of the IT Act, 1961. Further neither Section 269SS nor 271D of the IT Act, 1961 state that any transaction in breach thereof will be illegal, invalid or statutorily void. Therefore, any violation of Section 269SS would not render the transaction unenforceable Under Section 138 of the NI Act or rebut the presumptions Under Sections 118 and 139 of the NI Act because such a person, assuming him/her to be the payee/holder in due course, is liable to be visited by a penalty only as prescribed. Consequently, the view that any transaction above Rs. 20,000/- (Rupees Twenty Thousand) is illegal and void and therefore does not fall within the definition of 'legally enforceable debt' cannot be countenanced. Accordingly, the conclusion of law in P.C. Hari (supra) is set aside.
IN THE SUPREME COURT OF INDIA
Criminal Appeal No. 1755 of 2010
Decided On: 25.09.2025
Sanjabij Tari Vs. Kishore S. Borcar and Ors.
Hon'ble Judges/Coram:
Manmohan and N.V. Anjaria, JJ.
Author: Manmohan, J.
Citation: 2025 INSC 1158.
Read full judgment here: Click here.
Print Page
No comments:
Post a Comment