Violence of sec. 269ss & 269t

Dear Friends

Can a Tax Consultant deposit tax (VAT) of Rs.52600/- on behalf of client by self retained money in Cash and after payment of tax if he receive cash from client then voilence of Sec.269SS & T would arise or not ?
In other words I want to say first we deposit tax on behalf of client and then we claim it from client, if client deny to pay this sum as no proof of transcation available except Challan filled by Tax consultant in his handwriting  and no other proof  available. In this case Sec. 269 SS & T applicable or not, because Tax consultant has given loan indirectly to Client. If we filed case in court against client and proove the loan amount in court  than on the basis of loan exceeds Rs20000/- can Income tax Department  levy penalty u/s 269 SS & T.

Thanks

Replies (2)

Dear Mr. Khan,

According to me & from what i have understood after reading the provisions of Sec. 269SS & T. you will be paying on behalf of the client, hence this would not come under the perview of Sec 269SS. since you are paying the government of india the provisions of cash transaction are not applicable. Further you should be getting re-imbursed from your client for expenses done by you on his behalf hence this would not be re-payment of loan. therefore sec 269T is also not attracted.

but sec 40A(3) will be applicable on your client if re-imburses you with cash payment.

Your chaalan would have the stamp of the bank in which the money will be deposited, this is proof enough that you have deposited the money on his behalf

I don't think that section 40(A)(3) would get attracted, becasue nothing is being debited to the P&L of the consultant. What he is doing is paying on behalf of the client and geting re-imbursed for that. So consultant is not incurring any expenditure for himself.

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