YES     

But sir Firm and partners are one and same, there is no two persons exist in the transaction.

The case is litigative until any clarification regarding the same is issued by CBDT in this regard. Two different views are possible. One view being penalty will be imposed under section 271DA read with section 269ST, as quoted by Dhirajlal Rambhia Sir. With due respect I would like to differ and present contrary view on the issue.

Section 269ST says no payment exceeding 2,00,000 shall be recieved from any PERSON. Now Partnership Firm is not a legel person although it has got some attributes of personality. In Income Tax Law, a firm is a unit of assessment by special provisions, but it is not a full person. It has no legal recognition. The same view was held by Hon'ble Supreme Court in the case of R.M. Chimbaram Pillai reported in (1977) 106 ITR 292 (SC) where penalty was proposed to be imposed due to acceptence and repayment of loan by partnership firm from its partner u/s 269SS and 269T. Supreme Court held that penalty cannot be imposed on such transactions.

Lets wait for some other views too.

Originally posted by : PRABU
	But sir Firm and partners are one and same, there is no two persons exist in the transaction.

Definition of ‘Person’ – Income Tax

As per S.2(31) of Income Tax Act, 1961, unless the context otherwise requires, the term “person” includes:

(i)  an individual,

(ii)  a Hindu undivided family,

(iii)  a company,

(iv)  a firm,

(v)  an association of persons or a body of individuals, whether incorporated or not,

(vi)  a local authority, and

(vii) every artificial juridical person, not falling within any of the preceding sub-clauses.

Explanation:

For the purposes of this clause, an association of persons or a body of individuals or a local authority or an artificial juridical person shall be deemed to be a person, whether or not such person or body or authority or juridical person was formed or established or incorporated with the object of deriving income, profits or gains.

The Section 269ST reads as follows:

No person shall receive an amount of two lakh rupees or more—

AS per IT act:: Different PAN is treated as different person.

Dear All

The provisions of Section 269ST and the penalty provisions u/s 271DA draconian. The Central Government may notify the drawings by the partners from the firm to be out of the clutches of Section 269ST and Section 271DA.

Best Wishes

SathikondaA

Dear All

The provisions of Section 269ST and the penalty provisions u/s 271DA draconian. The Central Government may notify the drawings by the partners from the firm to be out of the clutches of Section 269ST and Section 271DA.

Best Wishes

SathikondaA

Yes as partnership firm is included in definition of person under the income tax act, any withdrawal of capital in cash by a partner of Rs 2 Lakhs or more or any capital introduced or addition in capital in cash amounting to Rs 2 Lakhs or more will invite penalty u/s 271DA.The scope of section 269ST is very wide and unless there is a notification by the Govt. no exemption is made available to any person or class of persons.