Section 271D of ITA, 1961 : Section 271D: Penalty For Failure To Comply With The Provisions Of Section 269Ss

Explanation using Example

Imagine a business owner, Mr. Sharma, who accepts a cash loan of INR 50,000 from his friend Mr. Gupta without any documentation. This transaction is in contravention of Section 269SS of the Income-tax Act, which prohibits accepting loans in cash exceeding INR 20,000 without proper documentation. As a result, under Section 271D, Mr. Sharma could face a penalty equal to the amount of the cash loan he accepted, which is INR 50,000. This penalty would be imposed by the Joint Commissioner of Income-tax.