Loading judgment…
Facts
The assessee, a Primary Agricultural Cooperative Credit Society, received Rs. 64,33,313 in cash (above Rs. 20,000 per transaction) against KCC loan repayments from members, which was deemed a contravention of Section 269SS of the Income Tax Act. A penalty of an equal amount was imposed under Section 271D by the Assessing Officer and subsequently upheld by the CIT(A).
Held
The Tribunal held that the principle of mutuality applied to the cooperative society and its members, rendering Section 269SS inapplicable to such transactions. Additionally, since the amount in question was already added to the assessee's income during assessment, it lost its character as a loan/deposit, thus making the penalty under Section 271D not leviable due to the presence of 'reasonable cause' as per Section 273B.
Key Issues
Whether a penalty under Section 271D for cash receipts, allegedly violating Section 269SS, is justified for a cooperative society receiving funds from its members, considering the principle of mutuality and if the amount has already been taxed as income, constituting 'reasonable cause' under Section 273B.
Sections Cited
250, 271D, 269SS, 144, 143(3), 271E, 269T, 269ST, 273B
AI-generated summary — verify with the full judgment below
Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SRI SANJAY GARG & SRI RAKESH MISHRA
order
: January 16th, 2025 ORDER
PER RAKESH MISHRA, ACCOUNTANT MEMBER:
The present appeal filed by the assessee pertaining to the AY 2017-18 is against the order of the Commissioner of Income Tax (Appeals)-NFAC, Delhi [hereinafter referred to as ld. 'CIT(A)'] passed u/s 250 of the Income Tax Act, 1961 (in short the 'Act') dated 24.01.2024 arising out of the penalty order framed u/s 271D of the Act dated 31.05.2022.