In a significant directive aimed at curbing black money and ensuring compliance with the Income Tax Act, a Division Bench of the Supreme Court comprising
Background of the Case
The case stemmed from a civil suit filed by B. Gunashekar and another against RBANMS Educational Institution, a 148-year-old charitable trust. The trial court and the Karnataka High Court had dismissed the appellant’s application for rejection of the plaint under Order VII Rule 11(a) and (d).
Court’s Findings on Cash Transactions
The Supreme Court took serious note of the plaintiffs’ claim of having made a ₹75 lakh payment in cash. The Court observed: “When a suit is filed claiming ₹75,00,000 paid by cash, not only does it create suspicion on the transaction, but also displays
Mandatory Directions Issued by the Court
In a path-breaking move, the Court issued binding directions under Paragraph 18.1 of the judgment, making it obligatory for:
(C) Whenever a cash payment of ₹2,00,000 or above is claimed in a document presented for registration, the jurisdictional Sub-Registrar shall inform the Income Tax Department.
Systemic Compliance and Communication
To ensure effective implementation, the Court directed that the judgment be circulated by the Registrar (Judicial) of the Supreme Court to:
These authorities must communicate the directions to district judiciary, registration officials, and tax officers for strict compliance and periodic audits.a significant directive aimed at curbing black money and ensuring compliance with the Income Tax Act, a Division Bench of the Supreme Court comprising
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The trial court and the Karnataka High Court had dismissed the appellant’s application for rejection of the plaint under Order VII Rule 11(a) and (d)
Court’s Findings on Cash Transactions The Supreme Court took serious note of the plaintiffs’ claim of having made a ₹75 lakh payment in cash, especially
The Court observed: “When a suit is filed claiming ₹75,00,000 paid by cash, not only does it create suspicion on the transaction, but also displays
Mandatory Directions Issued by the Court In a path-breaking move, the Court issued binding directions under Paragraph 18.1 of the judgment, making it obligatory for
(C) Whenever a cash payment of ₹2,00,000 or above is claimed in a document presented for registration, the jurisdictional Sub-Registrar shall inform the Income Tax
Systemic Compliance and Communication To ensure effective implementation, the Court directed that the judgment be circulated by the Registrar (Judicial) of the Supreme Court to:
These authorities must communicate the directions to district judiciary, registration officials, and tax officers for strict compliance and periodic audits.