The Commissioner Of Income Tax – Iii, Pune v. Sanjivani Nagari Sahakari Pat Sanstha Limited, Satara

IN THE HIGH COURT OF JUDICATURE AT BOMBAY ORDINARY ORIGINAL CIVIL JURISDICTION INCOME TAX APPEAL NO.2248 OF 2009 The Commissioner of Income Tax – III, Pune ..Appellant. Versus Sanjivani Nagari Sahakari Pat Sanstha Limited, Satara ..Respondent. Mr.Vimal Gupta for the appellant.None for the respondent. CORAM : Dr.D.Y. Chandrachud & J.P. Devadhar, JJ. DATE : 22[nd] January, 2010. P.C. : 1.The Tribunal has relied upon the orders passed by it in similar cases involving Credit Cooperative Societies which had accepted deposits in cash in contravention of the provisions of Section 269SS of the Income Tax Act, 1961. In those cases, the Tribunal had deleted the penalties which were imposed by the assessing officer. The Tribunal, while following the earlier judgments, accepted the contention that the deposits were accepted by the Society in the present case in cash under a bona fide, though mistaken belief that this was permissible but that would constitute a reasonable cause in the facts and circumstances of the case which would warrant the deletion of the penalty. The Tribunal has noted the contention of the assessee that the Society was formed mainly with a view to accept deposits from its members and to provide credit facility to them; the Society dealt only with its members; many of the members do not have even a bank account and when they go to the Society for depositing money, it would be inconvenient for them to go to other banks who could issue them cheques / demand drafts; and the Society is situated in a rural area and a small Society like the assessee cannot ask the depositors to furnish payment by cheques or demand drafts. The explanation has been accepted by the Tribunal. 2.Our attention has been drawn to the orders passed by this Court on 16[th] April 2009 and 14[th] August 2009 in similar cases (Commissioner of Income Tax – I, Nashik V/s. Gavkari Prakashan, Income Tax Appeal No.307 of 2009 and companion appeals and Commissioner of Income Tax Vs. Mahesh Nagari Sahakari Pat Sanstha Limited, Income Tax Appeal No.490 of 2007). Having regard to the circumstance that in similar cases, this Court has dismissed appeals filed by the revenue against the orders of the Tribunal deleting penalties, we are of the view that no substantial question of law would arise. 3.However, we may clarify that in view of the fact that the amount was accepted by the Society under a bona fide belief that the provisions of Section 269SS did not apply, we do not consider it proper to entertain this appeal. With the aforesaid clarification, we dismiss the appeal. There shall be no order as to costs. (J.P. Devadhar, J.) (Dr.D.Y. Chandrachud, J.)