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2010 (2) TMI 708 - AT - Income TaxApplication of Section 269SS or 269T to the co-operative society - Penalty for contravention - reasonable cause - assessee is a multi state Co-operative Society engaged in the activity of accepting deposits from its members and redeploying the funds by way of advancing loans to the members and investing surplus funds - Held that:- provisions of section 269SS and 269T are applicable to co-operative society. Penalty u/s 271D and 271E - reasonable cause - Held that: - In levying the penalty, u/s 271D or 271E one has to see the existence of reasonable causes. The word "reasonable cause' has not been defined under the Act, but they could receive the same interpretation which is given to the expression 'sufficient cause'. Therefore, in the context of penalty provisions, the words 'reasonable cause' could mean a cause which beyond the control of the assessee. - there should be findings in the assessment order that the transactions made by the assessee in breach of provisions of Sec.269SS or 269T were not a genuine transaction. The expression "reasonable cause' has to be considered pragmatically and as it is transactions are openly done, to meet the exigencies of business, it can be said to constitute 'reasonable cause'. The bona fide business of transaction cannot be considered for levying the penalty u/s 271D or 271E. More so, the assessee has been carrying on the banking business and it is having bona fide belief that provision of sec.269SS/269T is not applicable to the assessee case and same is coupled with genuineness of the transaction constitute a reasonable cause and in such case the default on the part of the assessee is merely of a technical or venial nature and no penalty be levied.
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