TMI Blog2011 (5) TMI 356X X X X Extracts X X X X X X X X Extracts X X X X ..... T APPEAL NO. 1799 (MUM.) OF 2011 - - - Dated:- 13-5-2011 - P.M. JAGTAP, VIJAY PAL RAO, JJ. Haridas Bhat for the Appellant. Songate for the Respondent. ORDER P.M. Jagtap, Accountant Member. This appeal filed by the assessee is directed against the order of the learned CIT(Appeals)-29, Mumbai dated 21-12-2010 whereby he confirmed the penalty of Rs. 23,29,081 imposed by the Assessing Officer under section 271E. 2. The relevant facts of the case giving rise to this appeal are that the assessee is a Cooperative Credit Society. As noted by the Assessing Officer from the audit report filed with the return of income, the assessee had repaid deposits in cash exceeding Rs. 20,000 to various depositors totalling to Rs. 23,29 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ing during 1-4-2005 to 31-3-2006 they have given a statement that showing the details of payments made in cash above Rs. 20,000 during the period 1-4-2005 to 31-3-2006 by transferring to the members Saving Account." The above explanation offered by the assessee was not found satisfactory by the Assessing Officer. According to him, the assessee was neither a banking company nor a cooperative bank as per the meaning assigned to the said terms in the Banking Regulation Act, 1949 and it was, therefore, not covered within the exceptions given in proviso to section 269T. He, therefore, held that the repayment of deposits in cash exceeding Rs. 20,000 to various depositors totalling to Rs. 23,29,081 was made by the assessee in contravention of th ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... r of the learned CIT(Appeals), the assessee has preferred this appeal before the Tribunal. 4. The learned counsel for the assessee at the outset invited our attention to second proviso to section 269T which provides that nothing contained in section 269T shall apply to repayment of any loan or deposit taken or accepted inter alia from a cooperative bank. He then invited our attention to a copy of registration certificate issued by the Assistant Registrar, Cooperative Society, Mumbai on 31-3-1969 placed at page 7 of the paper book along with English translated version thereof placed at page No. 6 to point out that the assessee society was classified as a cooperative bank as per section 12(1) of the Maharashtra Cooperative Society Act, 1960 ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... elow in support of the Revenue's case that there being repayment of deposits in cash in the sums exceeding Rs. 20,000 by the assessee in clear contravention of the provisions of section 269T, penalty under section 271E is attracted. 6. We have considered the rival submissions and also perused relevant material on record. It is observed that the penalty has been imposed by the Assessing Officer and confirmed by the learned CIT(Appeals) in the present case under section 271E for the repayment of deposits made by the assessee in contravention of the provisions of section 269T which reads as under : "269T. No branch of a banking company or a co-operative bank and no other company or co-operative society and no firm or other person shall rep ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ns or bodies which the Central Government may, for reasons to be recorded in writing, notify in this behalf in the Official Gazette.]" 7. As held by Hon'ble Supreme Court in the case of Asstt. Director of Inspection v. Kum. A.B. Shanti [2002] 255 ITR 258/122 Taxman 574, the undue hardship of the provisions of section 271D/271E is substantially mitigated by the inclusion of section 273B providing that if there is a genuine and bona fide transaction and the tax payer could not get loan or deposit by account payee Cheque or DD for some bona fide reason, the authority vested with the power to impose the penalty has a discretion not to levy the penalty. The said decision of Hon'ble Apex Court in the case of Kum. A.B. Shanti (supra) thus makes ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ase, the repayment of deposits having been made by it by crediting the amount of deposits to the saving bank account of the concerned depositors, there was sufficient compliance of the provisions of section 269T as per the first proviso. Although this belief entertained by the assessee turned out to be a mistaken belief going by the meaning assigned to "cooperative bank" in Part V of the Banking Regulation Act, 1940 as provided in Explanation (ii) to section 269T, we are of the view that there is sufficient basis to show that the said belief was a bona fide belief. Secondly, all the deposits in question in the present case were repaid by the assessee society to its own members and considering that there is a complete mutuality between the s ..... X X X X Extracts X X X X X X X X Extracts X X X X
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