ITA Nos. 727 & 730/Coch/2023

Parties Involved

Facts Summary

The case involves twin appeals by the Revenue against the orders of the National Faceless Appeal Centre, Delhi, which deleted penalties imposed on Vengeri Service Co-op. Bank Ltd. under sections 271D and 271E of the Income Tax Act, 1961. The assessee, a primary agricultural credit society, had accepted deposits and provided loans in cash to its members, predominantly agriculturists, in remote areas of North Kerala. The Revenue argued that the assessee violated sections 269SS and 269T of the Act by accepting and repaying loans in cash. However, the assessee contended that it had a bona fide belief that such transactions were not in violation of the said sections. The CIT(A) had deleted the penalties, finding that the assessee had reasonable cause for the cash transactions and that there was no deliberate violation to evade tax.…

Legal Issues

• 1. Whether the CIT(A) rightly deleted the penalties imposed under sections 271D and 271E of the Act?
• 2. Whether the assessee's transactions in cash were in violation of sections 269SS and 269T of the Act?

Judgment Outcome

Decided in favour of Partly Assessee / Partly Revenue.

Precedents Relied Upon

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