Penalty U/s 269ss of Income Tax Act 1961

[sunil patil]

A Co-operative credit society disburse a loan of Rs.1,00,000/- to his member by cheque. The same  member of society who has taken loan from society was partly repay the loan to the society for Rs.50,000/- in cash.  The society has accept the amount in cash. Is the society has made contravention of  Section 269SS of IT Act ? As per my information contravention u/s 269SS is made only when amount of deposit or loan accepted in cash & not at the time of acceptance of repayment of loan.

Please guide me.

[CA Rachit Agarwal]

However Section 269T deals with the Repayment of loans and deposits.

AI Summary

Cash acceptance prohibition under Section 269SS contrasted with separate repayment rules under Section 269T for loan repayments.
Whether a cooperative credit society contravenes the prohibition on cash acceptance when it accepts a borrower's cash repayment is the operative question; the society disbursed the loan by cheque and accepted a partial cash repayment. The reply notes that the cited provision addresses acceptance of deposits or loans while separate statutory rules govern repayment, creating a distinction between acceptance of loans/deposits and acceptance of repayments.