TaxTMI 
TaxTMI 
TaxTMI 
2025 (9) TMI 778
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....;Act') dated 24.01.2024 arising out of the penalty order framed u/s 271D of the Act dated 31.05.2022. 2. 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 Commissio....
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....otice 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 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....
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....g 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 contravent....
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....9SS of the Act. As the assessee accepted the loan in contravention of the provision of section 269SS of the I.T. Act, which attracts penalty proceedings u/s 271D of the I.T. Act, the penalty proceeding was initiated and penalty u/s 271D was imposed at Rs. 64,33,313/-. 4. Aggrieved with the penalty order, the assessee filed an appeal before the Ld. CIT(A) who relied upon the decision of Hon'ble ITAT Cochin in the case of Hindalco Employees Co-operative Credit Society Ltd. Vs. ACIT, [2014] 49 taxmann.com 309 (Cochin-Trib.), which has relied upon the decision in the case of CIT Vs. Kumbakonam Mutual Benefit Fund Ltd. [1964] 53 ITR 241 (SC) in which it has been held that the principle of mutuality is not applicable to the share holder of a c....
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....e. In the assessment order the sum of Rs. 64,33,313/- has also been added to the income of the assessee and once the amount was added to the income, the same lost its character as loan and on this ground alone the levy of penalty was not justified. Further, in the case of Kumbakonam (supra), which has been relied upon in the case of Hindalco (supra), which has been made the basis for denying the benefit of mutuality, the concern was a company in which the share holders are distinct as the company has a separate legal entity while in the case of the assessee, the status is of a society which is an association of persons and, therefore, the decision relied upon by the Ld. CIT(A) to hold that the members of society are different and there is n....