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IN THE INCOME TAX APPELLATE TRIBUNAL

AHMEDABAD “C” BENCH

Before: Shri T.R. Senthil Kumar, Judicial Member

And Shri Narendra Prasad Sinha, Accountant Member

ITA No. 1932 & 1933/Ahd/2025

Assessment Year: 2016-17

The DCIT Shri Umiya Co-operative

Circle Gandhinagar, Credit Society Ltd.

Gandhinagar Vs 1, AT And Post Linch,

Vata Bazar, Linch,

Mehasana, Gandhinagar,

Gujarat-384435

PAN: AAAJS1455M

(Appellant) (Respondent)

Revenue Represented: Shri Rignesh Das, CIT-DR

Assessee Represented: Shri Dhinal Shah, A.R.

Date of hearing : 17-12-2025

Date of pronouncement : 24-12-2025

आदेश/ORDER

PER: T.R. SENTHIL KUMAR, JUDICIAL MEMBER:-

These two appeals are filed by the Revenue as against

separate appellate orders both dated 08/07/2025 passed by the

Commissioner of Income Tax (Appeals), National Faceless Appeal

Centre, Delhi, (in short referred to as “CIT(A)”), arising out of the

Penalties levied under sections 271D and 271E of the Income Tax

Act, 1961 (hereinafter referred to as ‘the Act’) relating to the same

Assessment Year 2016-17. Since common issue is involved in these

appeals, the same are disposed of by this common order, for the

sake of convenience.

I.T.A 1932 & 1933/Ahd/2025 A.Y: 2016-17 2

DCIT Vs. Shri Umiya Cooperative Credit Society Ltd.

2. Brief facts of the case are that the assessee is a co-op. credit

society registered under the State Co-op Act vide Registration No.

27322 dated 08.05.1995. The assessee was filing regularly returns

of income and the society was mainly engaged in providing credit

facilities to its members and taking deposits from its members. On

verification of high value transaction reported in Annual

Information Report, the office of the ITO, Intelligence and Criminal

Investigation (I&CI), Ahmedabad observed that the assessee had

made cash deposits amounting to Rs.2,70,74,300/- in its bank

account maintained with DENA Bank. It was observed during the

enquiry by the ITO (I&CI), Ahmedabad that the assessee had

violated the provisions of section 269SS and 269T of the Act. The

Information regarding the violation was passed on to the Pr. CIT-3,

Ahmedabad. As per information, it was found that the cash

received from the Members as deposits, subscription and loan

repayments are deposited into bank account. The above

information was also passed by the ITO, [I&CI], Ahmedabad to the

Jurisdictional Assessing Officer of the assessee i.e. Deputy

Commissioner of Income-tax, Gandhinagar Circle. After analyzing

the information, the JAO made a reference to the Addl. CIT,

Gandhinagar Range and initiated penalty proceedings u/s 271D

and 271E of the Act dated 31.03.2021. The limitation date to pass

the order in the said penalty was 30.09.2021 which was extended

to 31.03.2022 vide CBDT Notification 113/2021 dated 17.09.2021.

Subsequently, case was migrated to Faceless Penalty Scheme 2021

and thereafter, notice u/s.271D dated 26.07.2021 was issued for

making compliance on 06.08.2021, but assessee failed to make

compliance to the said notice. However subsequently the assessee

I.T.A 1932 & 1933/Ahd/2025 A.Y: 2016-17 3

DCIT Vs. Shri Umiya Cooperative Credit Society Ltd.

filed reply on 10.09.2021. The AO observed that the assessee

society had clearly and unambiguously contravened the provisions

of Section 269SS and 269T of the Act, by accepting cash loan of Rs.

28,01,69,810/- (Exceeding Rs.20,000/- in cash on a single day)

thereby, violating the provisions of Section 269SS of the Act, by

way of accepting subscription, deposits and loan to the tune of Rs.

28,01,69,810/-. Accordingly, penalty u/s 271D of the Act, of Rs.

28,01,69,810/- was imposed on 29.03.2022. Similarly penalty u/s.

271E of the Act of Rs.27,32,46,775/- was imposed on 31-03-2022

for repayment of loans by cash mode exceeding Rs.20,000/-.

3. Aggrieved against the penalty orders, assessee society filed

appeals before Ld. CIT(A) who has deleted the penalty invoking

Section 273B of the Act by passing detailed orders as reasonable

cause was made out by the assessee society wherein he considered

the Jurisdictional High