A large cash deposit in a bank statement is not itself a violation of anything. Depositing your own cash is allowed without limit.
What the law restricts is the receipt that produced the cash. Section 269ST prohibits receiving two lakh rupees or more from one person in a day, in respect of a single transaction, or in respect of transactions relating to one event or occasion, otherwise than through a banking channel. The penalty under 271DA is equal to the amount received.
The bank statement shows the deposit. The receipt behind it is invisible, and that is exactly the gap clause 31 of Form 3CD is written to close.
Three sections, three different questions
They are routinely treated as one rule about cash. They are not.
269SS governs accepting a loan, deposit or specified sum of twenty thousand rupees or more otherwise than by account payee cheque, draft or electronic transfer. The penalty under 271D equals the amount accepted.
269T governs the repayment of such a loan or deposit on the same terms, with penalty under 271E.
269ST is the broadest and the newest, and it is not restricted to loans. It covers any receipt of two lakh or more from a person in a day, or against a single transaction, or relating to one event. A wedding paid for in several cash instalments across a week can breach it even though no individual payment does, because the instalments relate to one occasion.
The aggregation rules are where the exposure sits, and they are the part a bank statement cannot show you.
What clause 31 actually asks for
Clause 31 of Form 3CD requires particulars of each loan or deposit accepted and repaid in breach of 269SS and 269T, and of receipts and payments in breach of 269ST, with the name, address and PAN of the other party.
The reporting obligation is on the auditor and it is per transaction, not a summary. That means the underlying detail has to exist somewhere before the audit begins, which in practice means the cash book and the supporting receipts rather than the bank statement.
This is also a clause where a nil report needs to be a considered nil. Reporting nothing because nothing was found is defensible; reporting nothing because nobody looked is the finding that is hard to answer later.
Reading the bank statement for where to look
The statement will not answer the question, but it will tell you which months to examine.
A pattern of cash deposits just below a round threshold, repeated, is worth understanding. So is a cluster of deposits in the days after a known event, or a single deposit materially larger than the client's normal trading pattern. None of these is evidence of a breach, and reading them as such would be wrong. They are pointers to the cash book entries that need to be traced to a receipt.
This is one of the genuine uses of a party-wise view of the year rather than a date-ordered one: total cash movement per counterparty makes an aggregation visible that twelve separate statements do not. The party-wise ledger exists for exactly this shape of question.
What to tell the client, and when
September is too late for this conversation to change anything, which is the argument for having it in April.
The breaches that appear in a tax audit were committed months earlier and are not fixable retrospectively. A client who takes cash against sales in a business where that is normal needs to know the two lakh line before the transaction, not after, and needs to know that splitting a receipt across days does not help when the receipts relate to one transaction.
What is achievable in September is accurate reporting. What is achievable in April is fewer things to report, and that difference is worth a standing note to every client who deals in cash at all.
Conclusion
The bank statement is the wrong document for this question, and that is worth being explicit about rather than working around.
It records that cash arrived in the account. The law asks how it arrived in the client's hands, from whom, and against what. Those answers live in the cash book and the receipts, and the statement's role is to tell you which weeks deserve attention.
What a good bank import contributes here is the view, not the verdict: every counterparty, every cash movement, totalled across the year in one place instead of twelve. The judgement stays where it belongs.
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