THE COMMISSIONER OF INCOME TAX vs. M/S SUMANGALA CREDIT CO-OP. SOCIETY LTD.,

1 IN THE HIGH COURT OF KARNATAKA AT BANGALORE DATED THIS THE 05TH DAY OF NOVEMBER 2012 PRESENT THE HON'BLE MR. JUSTICE K.SREEDHAR RAO AND THE HON'BLE MR. JUSTICE B.V.PINTO I.T.A. No.917/2007 C/W. I.T.A.No.918/2007 ITA No.917/2007:- BETWEEN : 1 THE COMMISSIONER OF INCOME TAX, C.R. BUILDING, ATTAVARA, MANGALORE. 2 THE INCOME TAX OFFICER, WARD-2(3), C R BUILDING, ATTAVARA, MANGALORE. APPELLANTS (BY SRI K.V. ARAVIND, ADVOCATE) AND : M/S.SUMANGALA CREDIT CO-OP. SOCIETY LTD., PANE MANGALORE POST,

2 BANTWAL TALUK, MANGALORE. RESPONDENT (BY SMT. VANI H., ADVOCATE) This ITA is filed u/S.260-A of I.T. Act, 1961 arising out of Order dated 13-07-2007 passed in ITA No. 432/BNG/2007, for the Assessment Year 2004-2005, praying that this Hon'ble Court may be pleased to (i) formulate the substantial questions of law stated therein and (ii) allow the appeal and set aside the order passed by the ITAT Bangalore in ITA No. 432/BNG/2007, dated 13-07-2007 and confirm the order of levy of penalty vide order dated 15-9-2006. ITA No.918/2007:- BETWEEN : 1 THE COMMISSIONER OF INCOME TAX, C.R. BUILDING, ATTAVARA, MANGALORE. 2 THE INCOME TAX OFFICER, WARD-2(3), C R BUILDING, ATTAVARA, MANGALORE. APPELLANTS (BY SRI K.V. ARAVIND, ADVOCATE) AND : M/S.SUMANGALA CREDIT CO-OP. SOCIETY LTD., PANE MANGALORE POST, BANTWAL TALUK, MANGALORE. RESPONDENT (BY SMT. VANI H., ADVOCATE)

3 This ITA is filed u/S.260-A of I.T. Act, 1961 arising out of Order dated 13-07-2007 passed in ITA No. 431/BNG/2007, for the Assessment Year 2003-2004, praying that this Hon'ble Court may be pleased to (i) formulate the substantial questions of law stated therein and (ii) allow the appeal and set aside the order passed by the ITAT Bangalore in ITA No.431/BNG/2007, dated 13-07-2007 and confirm the order of levy of penalty vide order dated 15-9-2006 in the interest of justice and equity. These appeals are coming on for final hearing this day, SREEDHAR RAO, J., delivered the following:

JUDGMENT The assessee is a Co-operative Bank. Some of the members of the assessee refunded the deposit amounts by cash which was in respect of each assessee. The amount involved was more than Rs.20000/-. Sec. 269(T) insists such payments should be by way of Account payee cheques. The assessee submitted that in ignorance of law the deposit amounts have been refunded by cash to some of members. It is further stated that the Assessing Officer does not finds that there is no cash payment to the members. The fact that cash payment is made is not in dispute. The infraction if any is technical. The provisions of Sec.273-B declares that upon furnishing of satisfactory explanation the provisions of levy of penalty could be

4 dropped. The explanation given by the assessee is not found to be false or incorrect. The fact of payment of deposit amounts to some of the members by cash is not in dispute. The identity and address of the members is furnished. There is no verification from the said members about the correctness of the transaction. Therefore, in view of the provisions of Sec.273-B the dropping of the penalty proceedings by the order of the Tribunal is sound and proper. The question of law framed is answered against the revenue. Accordingly, the appeals are dismissed. Sd/- JUDGE Sd/- JUDGE psg*