Income Tax Officer, New Delhi vs Delhi State Taxi Operators Co-Operative Thrift And Credit Society Ltd.

ORDER

“4.

The appellant submitted an order of Delhi ITAT in assessee's own case for Assessment year 2013-14 (ITA No 3107 & 3108/DEL/2019 dated 26/04/2023) wherein the ITAT has cancelled both the penalties levied under section 271D and 271E of the Act in the Case. The tribunal held that, 24. We may also refer to the decision of the co-ordinate bench of Delhi Tribunal in the Mamurpur Co-operative Thrift and Credit Society Ltd. vs. Addl. CIT rendered on 10.09.2020 in ITA No. 1370 & 1371/Del/2019. In this case also the assessee is a co-operative society registered under the Cooperative Society Act and is engaged in carrying on the business of providing credit facilities to its members. The assessment year involved is 2014-15 in which for the first time violation of section 269SS/269T has been pointed out. Even the tax auditor has not made any remark in their Tax Audit Report regarding violation of section 269SS or 269T in this year or in earlier years. In view of past history of the case the assessee was under bonafide belief that alleged loan or deposit accepted or repayment hereof was not in violation of section 269SS or 269T. On these facts which are akin to the case under consideration before us the Tribunal recorded the following findings and cancelled the penalty levied under section 271D and 271E of the Act :-In our opinion, belief on the part of the assessee in view of the past history of the case that deposit/repayment by its members in cash is bonafide belief. In the case of CIT vs. Lokpal Film Exchange (Cinema) (2008) 304 ITR 172, the Hon'ble High Court held that the assessee had acted bonafidely and its plea that inter se transaction between the partners and the firm were not governed by the provision of section 269SS/269T, was a reasonable explanation and no penalty could be imposed. In view of the above, we are of the opinion that considering the bonafide and genuine transaction, reasonable cause in terms of section 273B of the Act, exist in the case of the assessee for not complying with the provision of section 269SS and 269T, and therefore, we cancel the penalty levied in terms of section 271D and 271E of the Act."

25.

In the light of the above discussion and following the precedents we are of the view that the assessee has discharged the onus which lay upon it to establish the existence of reasonable cause for violation of the provision of section 269SS and 269T of the Act. In our opinion, the explanation offered by the assessee before the Ld. JCIT/CIT(A) was reasonable but was discarded merely because they proceeded on the premise that breach of condition provided under section 269SS and 269T shall necessarily lead to penal consequences which understanding in our humble opinion is not in accordance with law. We, therefore, cancel the penalty levied under section 271D and 271E of the Act.

In the year under consideration, penalty under section 271D of Rs.9,66,82,633 was levied, and the facts of the case are Identical. Hence, following the above decision of the ITAT, it is held that the assessee has discharged the onus which lay upon it to establish the existence of reasonable cause for violation of the provision of section 269SS of the Act. Therefore, the penalty levied under section 271D is cancelled and the appeal is allowed.”