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TMI Blog2021 (7) TMI 510X X X X Extracts X X X X X X X X Extracts X X X X ..... assessment year 2013-14. 2. Succinctly, the factual matrix of the case is that the assessee filed her return declaring total income at Rs. 18,61,808. The assessee reported four payments totaling Rs. 19,64,31,914, in the tax audit report, as having been made to persons specified u/s 40A(2)(b) of the Act as under: Mahajan Adat Dukan Prop Yogita Mahajan Purchases Rs. 16,34,02,140/- Soni Adat Dukan Prop Prabhavati Mahajan Purchases Rs. 3,28,31,774/- Sunil P Mahajan Rent Rs. 1,80,000/- Yogesh P Mahajan Rent Rs. 1,80,000/- 3. The AO observed that total of such transactions in the nature of Specified Domestic Transactions (SDTs) exceeded the qualifying limit of Rs. 5 crore, requiring the assessee to maintain documents and information ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... or sub-section (2) of section 92D; (ii) fails to report such transaction which he is required to do so; or (iii) maintains or furnishes an incorrect information or document, the Assessing Officer or Commissioner (Appeals) may direct that such person shall pay, by way of penalty, a sum equal to two per cent of the value of each international transaction or specified domestic transaction entered into by such person. (2)......' 5. On circumspection of the above provision, it is clear that the penalty gets attracted where the assessee fails to keep records and documents etc., inter alia, in respect of a specified domestic transaction. The term `specified domestic transaction' has been defined in section 92BA, which at the material tim ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ambit of a specific provision, the same cannot be considered as so falling merely because the assessee took a mistaken view on that score. Coming back, we need to decide as to whether the transactions reported by the assessee u/s 40A(2)(b) were actually covered within its ken. To resolve the controversy, let us have a glance at the relevant portion of section 40A(2)(b), pertaining to an individual, as is the assessee, which runs as follows:- '(b) The persons referred to in clause (a) are the following, namely:- (i) where the assessee is an individual ... any relative of the assessee' 8. It talks of payments made by an individual to any of his or her relatives. The entire controversy rotates around the meaning of the term `relative' as ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... Thus, it is graphically clear that the definition clause applies to all the provisions under the Act unless the context of a particular section or set of sections otherwise requires. We have noted the language of section 56(2)(v), in which the context of the `relative' requires otherwise and for that purpose, a separate definition has been given in the Explanation. Obviously, while interpreting section 56(2)(v), we cannot go with the meaning of the term `relative' as given in section 2(41). It will have to be understood there as defined in the Explanation. Once we are out of section 56(2)(v), again the definition of the term `relative' as given in section 2(41) comes to govern, which has to be followed, unless the context of a particular se ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nt of Rs. 1.80 lakhs to Sunil Pandurang Mahajan, who is the assessee's husband. This transaction is covered within the meaning of term 'relative' as given in section 2(41) and hence falls within the realm of section 40A(2)(b). 11. We have noticed above the definition of specified domestic transaction as given in section 92BA as embracing, inter alia, the transactions referred to in section 40A(2)(b) of the Act provided 'the aggregate of such transactions entered into by the assessee in the previous year exceeds a sum of five crore rupees.' As the assessee's transaction covered u/s 40A(2)(b) is restricted only to Rs. 1.80 lakh, the same would not qualify as SDT u/s 92BA. A fortiori, sections 92D/92E also do not get magnetized and consequent ..... X X X X Extracts X X X X X X X X Extracts X X X X
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