Next, he submitted that the payment of more than ₹20,000/- in cash violates the provisions of Section 269 SS of the Income Tax Act, 1961 which prohibits grant of any loan or advance over a sum of ₹20,000/- in cash. He submitted that since the said loan was in violation to the provisions of the Income Tax Act, 1961 the same was not an enforceable debt. He relied upon by the decision of the Bombay High Court in Sanjay Mishra v. Kanishka Kapoor @ Nikkin and Anr.: 2009 (4) Mah.L.J.155 in support of his contention.[Para No.11]
The contention that the debt owed by the petitioner was rendered unenforceable by virtue of the provisions of the Income Tax Act, 1961 is also unmerited.[Para No.13]
Section 269SS of the Income Tax Act, 1961 prohibits making of any payment in cash above a sum of ₹20,000/-. Thus, any person violating the same would attract imposition of penalties under the said Act. However, the same does not render the said debt un-enforceable or precludes the lender from recovering the same. [Para No.14]
Delhi High Court
Guddo Devi @ Guddi
Vs.
Bhupender Kumar
Decided on 11/02/2020