PAHARHATI O UTTAR MEMARI COOPERATIVE AGRICULTURAL SOCIETY LTD, ,PURBA BURDWAN vs. ACIT, WARD-2(2), BURDWAN
Income Tax Appellate Tribunal, KOLKATA ‘C’ BENCH, KOLKATA
Before: SRI SANJAY GARG & SRI RAKESH MISHRA
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. I.T.A. No.: 535/KOL/2024
Assessment Year: 2017-18
Paharhati O Uttar Memari Cooperative
Agricultural Marketing Society Ltd.
Page 2 of 7
The assessee is in appeal before the Tribunal raising the following grounds of appeal: “1. That the learned Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi was not justified in upholding the action of the Assessing Officer of penalized of Rs. 64,33,313.00 on account of ‘cash received of Rs. 20,000.00 or above in a single transaction against repayment of KCC Loan and advance’ under section 271D of Income Tax Act, 1961 because the appellant is not an individual, but a Primary Agricultural Co-operative Society. So, the provision of section 269SS is not valid. 2. That the learned Commissioner of Income Tax (Appeal), National Faceless Appeal Centre, Delhi was not justified in upholding the action of the Assessing Officer that in the original order under section 144 of Income Tax Act, 1961 passed by the learned Assessing Officer is invalid. Therefore the penalty order under 271D of the Income Tax Act,1961 is also invalid. 3. That in exercise of the power to penalize under aforementioned section 271D of Income Tax Act,1961, the learned Commissioner of Income Tax (Appeal) should have applied his judicial mind and examine the records of the case and could have come to the conclusion that the condition precedents u/s 269SS were satisfied and requirements of law are fulfilled on the facts and circumstances of the case or not. 4. The learned Commissioner of Income Tax (Appeal) should have applied his judicial mind on justification that the section 269SS is not applicable for Co-operative Society as transaction of Co-operative Societies are only with members which cannot be treated as transaction by a person with another person. 5. The learned Commissioner of Income Tax (Appeal) should follow the previous order under section 250 dated 14.08.2023 for penalty order under section 271E of The Income Tax Act,1961 to delete this penalty order under section 271D passed by the learned Assessing Officer. 6. For that on the facts of the case, the ex-parte order passed by A.O without giving reasonable opportunity of hearing and not served any notice properly to the assessee which is completely arbitrary, unjustified, illegal. 7. Restrictions imposed by Section 269SS and 269T are not applicable in the case of Co-operative Societies. There are several decisions of ITATs to the effect that Section 269SS and 269T are not applicable to Cooperative Societies as transactions of Co-operative Societies are only with members I.T.A. No.: 535/KOL/2024 Assessment Year: 2017-18 Paharhati O Uttar Memari Cooperative Agricultural Marketing Society Ltd. Page 3 of 7
which cannot be treated as transaction by a person with another person.
For that reason, Section 269 ST also is not applicable to Co-operative societies. Some of the decisions in the subject matter are quoted below:-
In view of the transaction took place between the assessee and its member, the strict provisions of the sec.269SS/269T cannot be applied. Income Tax
Appellate Tribunal, Hyderabad The Citizen Co-Op. Society Ltd., vs.
Assessing officer on 19 October, 1997 The repayments of the deposits were made to the Members of the Society and it is obvious that the assesses
Society entertained a Bonafide belief that no contravention of any provisions of Income-tax Act is being made while making the repayments of loans/deposits in cash.
Income Tax Appellate Tribunal , Pune Muslim Urban Co-Op. Credit Society vs. Jt. Commissioner of Income tax, Sangli- on 25 March, 2004 According to us, these observations of the Tribunal are good enough to show that the view of the assessee society that its members being not any separate/distinct persons as contemplated in section 269T, the deposits repaid to them were not covered by the said provisions was a possible or conceivable view and the belief entertained by it on the basis of such view was a bona-fide belief. As such, considering all the facts and circumstances of the case, we are of the view the assessee society had entertained bona- fide belief that the deposits repaid by it to its members were not covered by the provisions of section 269T and this bona-fide belief coupled with the fact that the deposits were genuine and were also accepted and repaid in the regular course of business constitutes a reasonable cause for its failure to comply with the requirements of section 269T. In that view of the matter, we find no justification in the action of the learned CIT (A) confirming the penalty imposed U/s 271E and reversing his impugned order, we direct the A.O. to cancel the said penalty (Copy of some Judgement has been enclosed) The Appellants books of accounts has been audited by the Co-operative Auditor,
Government of West Bengal. All cash receipts and payments accounts, Bank
Statements, and all ledger accounts has been properly checked and verified by auditor. Trading, Profit and Loss accounts and Balance sheets represent a true and fair view in all respect. The Profit or Loss has been disclosed accordingly. It is very much authenticated (Copy of Audited Accounts has been enclosed) Therefore The Penalty order has been passed by charging penalty u/s 271D is equivalent to the amount of cash received in contravention of Provision Sec 269SS of the I.T. Act 1961. Amount taken in contravention of Sec 269SS of Rs. 64,33,313 is invalid.
8. That the appellant craves leave to supplement, amend, add, substitute, cancel, delete or otherwise modify all or any of the grounds herein before or at the time of hearing, if necessary, so arise.”
I.T.A. No.: 535/KOL/2024
Assessment Year: 2017-18
Paharhati O Uttar Memari Cooperative
Agricultural Marketing Society Ltd.
Page 4 of 7
Brief facts of the case are that the assessee is a Primary Agricultural Cooperative Credit Society (PACS) and has been registered under the West Bengal Co-operative Society Act 2006, with No. 5 on 31.03.1959 by the then